HENDRY COUNTY, FLORIDA COMBINED FINANCIAL STATEMENTS INCLUDING BOARD OF COUNTY COMMISSIONERS, CONSTITUTIONAL OFFICERS, AND COMPONENT UNITS

Transcription

1 COMBINED FINANCIAL STATEMENTS SEPTEMBER 30, 2013 INCLUDING BOARD OF COUNTY COMMISSIONERS, CONSTITUTIONAL OFFICERS, AND COMPONENT UNITS

2 TABLE OF CONTENTS Pages SECTION I COMBINED STATEMENTS REPORT OF INDEPENDENT AUDITORS I -1 I-3 MANAGEMENT DISCUSSION AND ANALYSIS I -4 I-11 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Position I-12 Statement of Activities I-13 FUND FINANCIAL STATEMENTS Balance Sheet Governmental Funds I-14 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position I-15 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds I-16 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Assets Governmental Funds I-17 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual General Fund I-18 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual County Transportation Trust Fund I-19 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual Solid Waste Disposal Fund I-20 Statement of Net Position Proprietary Funds I-21 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Fund I-22 Statement of Cash Flows Proprietary Funds I-23 Statement of Fiduciary Net Position Fiduciary Funds I-24 NOTES TO FINANCIAL STATEMENTS I-25 I-45 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Combining Schedule Balance Sheet General Fund I-46 Combining Statement of Revenues, Expenditures and Changes in Fund Balance General Fund I-47 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund I-48 I-49

3 TABLE OF CONTENTS (CONTINUED) Pages NON-MAJOR GOVERNMENTAL FUNDS Combining Balance Sheet Non-major Governmental Funds I-50 I-53 Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-major Governmental Funds I-54 I-57 Combining Schedule Balance Sheet Fiduciary Funds I-58 Statement of Changes in Assets and Liabilities Fiduciary Funds I-59 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTER SBASED ON AN OF FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I-60 I-61 MANAGEMENT LETTER I-62 I-63

4 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report To the Honorable Board of County Commissioners of Hendry County, Florida: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of Hendry County, Florida (the "County") as of and for the fiscal year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the County's basic 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. Auditor's 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 from 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. I-1

5 Auditor's Responsibility, continued 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. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the County as of September 30, 2013, and respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, County Transportation Trust Fund, and the Solid Waste Disposal Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and required supplementary information, as provided in the table of contents, be presented to supplement the basic financial statements. 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 auditing standards generally accepted in the United States of America, 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 statements. We do 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The introductory section, combining statements and schedules and statistical section as provided in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter , Rules of the Auditor General, and is also not a required part of the basic financial statements. I-2

6

7 MANAGEMENT'S DISCUSSION & ANALYSIS

8 Hendry County, Florida Management s Discussion and Analysis This discussion and analysis of Hendry County s (the County ) financial statements is designed to introduce the basic financial statements and provide an analytical overview of the County s financial activities for the fiscal year ended September 30, The basic financial statements are comprised of the government-wide financial statements, fund financial statements, and footnotes. We hope this will assist readers in identifying significant financial issues and changes in the County s financial position. Financial Highlights At the close of fiscal year 2013 the County s assets exceeded its liabilities, resulting in net assets of $90, which is an decrease of $2,630,947 over last year or (2.84) percent. Governmental and business-type assets exceeded its liabilities by $69,896,589 and $20,348,172, respectively which was a decrease of ($1,718,265) for governmental assets, or (2.39) percent and decrease of ($912,682) for business-type assets or, (4.29) percent. Total revenues for governmental activities were $44,121,992 which was a increase of $1,627,088 over prior year. Total expenses for governmental activities increased $77,771 Long-term liabilities are reported at $4,234,874 on September 30, 2013 for governmental activities and $9,411,188 for business-type activities. Decreases were associated with the pay-off of several buildings and no additional debt service during the 2013 fiscal year. Capital Assets net of depreciation are reported at $73,581,651 on September 30, 2013 for all fund types. Government-Wide Financial Statements The government-wide financial statements (statement of net assets and statement of activities) concentrate on the County as a whole and do not emphasize fund types but rather a governmental or a business-type classification, which are presented in separate columns. The governmental and business-type activities comprise the primary government and are reported separate from the component unit for which the County is accountable. General governmental and intergovernmental revenues support the governmental activities, whereas the business-type activities are primarily supported by user fees and charges for services. The purpose of the government-wide financial statements is to allow the user to be able to analyze the County s total financial position. The statement of activities reflect the expenses of a given function or segment, which are offset by program revenues. Program revenues are defined as charges for services, operating grants and contributions, and capital grants and contributions directly associated with a given function. Taxes are reported under general revenue. Fund Financial Statements The accounts of the County are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The County s funds are presented in separate fund financial statements. These funds are presented on a governmental fund financial statement and a proprietary fund financial statement. The County s major funds are presented in separate columns on the fund financial statements. The definition of a major fund is one that meets certain criteria set-forth in Governmental Accounting Standards Board Statements Number 34, Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments (GASB 34). The funds that do not meet the criteria of a major fund are considered non-major funds and are combined into a single column on the fund financial statements. The County adopts an annual budget for all funds. A budgetary comparison has been presented for the General Fund, County Transportation Trust Fund, Solid Waste Disposal Fund, Disaster Relief Fund, Capital Projects Fund, and Debt Service Fund which compares not only actual results to budget but also the original adopted budget to final budget. I - 4

9 Governmental Fund Financial Statements Governmental fund financial statements are prepared on the modified accrual basis using current financial resources measurement focus. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Five of the County s governmental funds, the General Fund, County Transportation Trust Fund, Solid Waste Disposal Fund, Disaster Relief Fund and Capital Projects Fund are classified as major funds. All other governmental funds are combined into a single column on the governmental fund financial statements. Individual fund data for the non-major funds are found in combining statement as supplemental financial data. Proprietary Fund Financial Statements Proprietary fund financial statements like government-wide financial statements are prepared on the full accrual basis. Proprietary funds record both operating and non-operating revenues and expenses. Operating revenues are those that are obtained from the operations of the proprietary fund. The County reports their Port LaBelle Utility System in the proprietary fund financial statement. This enterprise fund represents our water and sewer system that the county owns and operates. Fiduciary Fund Financial Statement The fiduciary fund financial statement is not included in the government-wide financial statements because the resources of those funds are not available to support the County s programs. The only type of fiduciary funds the County maintains, agency funds, are used to account for assets held by the County as an agent for individuals. Government-Wide Financial Analysis The government-wide financial statements were designed so that the user could determine if the County is in a better or worse condition from the prior year. In fiscal year ending 2003 GASB 34 was implemented and reporting requirements changed significantly. The following is a condensed summary of net assets for the primary government for fiscal years 2012 and 2013 with increases and decreases. Hendry County, Florida Summary of Net Assets with Prior Year Comparison September 30, 2013 Governmental Governmental Governmental Business-type Business-type Business-type All Actvities All Actvities Activities Activities Activities Activities Activities Activities Total Total Inc / (Dec) Inc / (Dec) 2013 Inc / (Dec) Current and other assets $ 31,553,429 $ 27,484,697 $ (4,068,732) $ 7,866,652 $ 7,704,492 $ (162,160) $ 35,189,189 $ (4,230,892) Capital Assets 57,326,875 57,087,286 (239,589) 24,616,506 23,643,761 (972,745) 80,731,047 (1,212,334) Total Assets 88,880,304 84,571,983 (4,308,321) 32,483,158 31,348,253 (1,134,905) 115,920,236 (5,443,226) Other Liabilities 13,807,080 10,440,520 (3,366,560) 1,534,476 1,588,893 54,417 12,029,413 (3,312,143) Non-current Liabilities 3,458,370 4,234, ,504 9,687,829 9,411,188 (276,641) 13,646, ,863 Total liabilities 17,265,450 14,675,394 (2,590,056) 11,222,305 11,000,081 (222,224) 25,675,475 (2,812,280) Net assets: Invested in capital assets, net of related debt 56,134,547 56,110,088 (24,459) 14,701,728 13,985,525 (716,203) 70,095,613 (740,662) Restricted 1,098,385 1,334, , ,334, ,847 Unrestricted 14,381,922 12,452,269 (1,929,653) 6,559,126 6,362,647 (196,479) 18,814,916 (2,126,132) Total Net Asset $ 71,614,854 $ 69,896,589 (1,718,265) $ 21,260,854 $ 20,348,172 $ (912,682) $ 90,244,761 $ (2,630,947) I - 5

10 Investment in capital assets, net of related debt is the largest portion of the net assets. This represents capital assets (land, buildings, improvements, equipment, furniture, vehicles, and infrastructure), net of accumulated depreciation, and the outstanding related debt used to acquire the assets. The restricted net asset balance of $1,334,232 in 2013 represents a bonding requirement and capital project requirement in The unrestricted net asset balance of $18,814,916 represents assets that are available for spending at the County s discretion however it is important to note that this balance is county wide and there are restrictions within each source of funds as to what these funds can be used for. The largest decrease in asset type for fiscal year ending in 2013 was restricted assets for governmental activities. Governmental Activities Analysis The Governmental Revenue Accounts had a increase of 3.83 percent from 2012 to The majority of this variance is due to an increase in Ad Valorem Taxes along with shared State Revenues. These increases are associated a slight upward turn of our economy in Hendry County as well as the State. None of the remaining revenue accounts had material differences. Expenses increased 0.01 percent in The majority of all expenses remain fairly constant which is directly associated with the economic crisis faced by all governmental agencies currently. The Hendry County Board of County Commissioners, Hendry County Staff as well as all Hendry County Constitutional Officials have worked diligently to become more efficient and cost effective over the past few years and will continue this process into the future. Business Activities Analysis The slight increase in revenues from 2012 to 2013 is due the small economic recovery as well as rate adjustments. Expenses decreased minimumly over multiple accounts due to efficiencies of staff. Expenditures should stabilize over the next few years with the completion of major capital improvement projects. The following schedule represents Summary of Revenue and Expenditures and Changes in Net Assets for the year September 30, I - 6

11 Hendry County, Florida Summary of Revenues, Expenses and Changes in Net Assets As of September 30, 2013 Revenues: Program Revenues: Governmental Governmental Business-type Business-type Activities Activities Activities Activities Total Charges for Service $ 8,183,069 $ 8,506,938 $ 1,166,582 $ 1,325,983 $ 9,832,921 Operating Grants and Contributions 5,134,099 1,270, ,270,851 Capital Grants and Contributions 721,296 4,992, ,992,084 General Revenues: Taxes 19,837,248 19,945, ,945,615 Impact Fees Intergovernmental revenues, not restricted for specific purposes 7,011,394 7,513, ,513,344 Other 1,607,798 1,893,160 62,125 70,867 1,964,027 Total Revenues 42,494,904 44,121,992 1,228,707 1,396,850 45,518,842 Expenses: Program Activities: General Government 11,735,518 12,118, ,118,255 Court Related 300,976 1,442, ,442,501 Public Safety 18,544,599 17,404, ,404,909 Physical Environment 3,180,690 3,285, ,285,607 Transportation 7,882,313 7,547, ,547,008 Economic environment 971,916 1,038, ,038,584 Human Services 1,222,227 2,109, ,109,471 Culture and recreation 1,858, , ,152 Interest on long-term debt 653,788 86, ,770 Business-type activities: Water and wastewater - - 2,425,493 2,309,532 2,309,532 46,350,896 45,840,257 2,425,493 2,309,532 48,149,789 Increase in net assets (3,855,992) (1,718,265) (1,196,786) (912,682) (2,630,947) Net assets October 1 74,882,436 71,614,854 22,457,640 21,260,854 92,875,708 Net assets September 30 $ 71,026,444 $ 69,896,589 $ 21,260,854 $ 20,348,172 $ 90,244,761 I - 7

12 Governmental Activities The following is a chart of revenues by source for governmental activities by percent of total revenues for fiscal year Revenues by Source - Governmental Activities 17% 0% 4% 45% 19% 3% 12% Charges for Service Operating Grants and Contributions Capital Grants and Contributions Taxes Impact Fees Intergovernmental revenues, not restricted for specific purposes Other I - 8

13 The following is a chart of expenses by program for governmental activities for fiscal year 2013 Expenses by Program - Govermental Activities 17% 2% 5% 2% 0% 26% 7% 38% 3% General Government Public Safety Transportation Human Services Interest on long-term debt Court Related Physical Environment Economic environment Culture and recreation I - 9

14 Business-Type Activities The following is a chart of Revenues by Source for our Business Activities for fiscal year Our Business Activities consist of Port LaBelle Utilities. Total Revenues created from Charges for Services consisted of $1,325,983. This represents charges for water/sewer usage. Other revenues totaling $70,867 resulted from a special assessment, interest revenue and miscellaneous charges. All business type expenditures for fiscal year 2013 consisted of water and wastewater expenses to operate Port LaBelle Utility Systems and administrative fees. Business Revenues 70,867 1,325,983 Charges for Service Other Financial Analysis of the Government s Funds Governmental Funds Governmental funds are comprised of the General Fund, Fine & Forfeiture Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Funds, and Disaster Relief Fund. As noted earlier governmental funds use the current financial resources measurement focus that focus on near-term inflows and outflows. The General Fund is the general operating fund that is used to account for all financial resources, except those required to be accounted for in another fund. The Fine & Forfeiture fund is comprised to fund the Hendry County Sheriff s office, probation department, courthouse security, mandated costs for law enforcement, and other misc. items to do with the same. Proprietary Funds Proprietary funds are comprised of enterprise funds and internal service funds. An enterprise fund is used to account for activities for which a fee is charged to external users for goods and services. Internal service funds are those that provide a service, primarily within the government, and charge a recovery fee. Capital Assets Non-depreciable capital assets include land and construction in progress. Depreciable assets include buildings, improvements other than buildings, machinery and equipment, and infrastructure. Total Capital assets total $80,731,047. This is a decrease of $1,212,334 over prior year. I - 10

15 Debt Administration At September 30, 2013, the County had $25,675,475 of total liabilities. Of this amount $13,646,062 consisted of noncurrent liabilities which mostly consists of bonds and notes payable of $9,411,188 for Port LaBelle Utilities bonds. The remaining balance consists of accounts payable, accrued liabilities, deferred revenue, and inter-fund liabilities. Request for information This financial report is designed to provide the reader an overview of the County. Questions regarding any information provided in this report should be directed to: Hendry County Clerk of Courts, Finance Department, 25 East Hickpochee Avenue, LaBelle, FL 33935, phone (863) I - 11

16 BASIC FINANCIAL STATEMENTS

17 STATEMENT OF NET POSITION September 30, 2013 Primary Government Component Units Governmental Business-type Activities Activities Total ASSETS Cash and cash equivalents $ 11,038,262 $ 832,851 $ 11,871,113 $ 9,826 Investments, at fair value 5,188,362-5,188,362 - Receivables, net 12,499,104 4,007,538 16,506,642 - Due from other governments - 34,700 34,700 - Inventory - 5,433 5,433 - Restricted assets: Investments, at fair value - 2,823,970 2,823,970 - Capital assets: Non-depreciable 6,612, ,006 7,149,396 - Depreciable, net 50,474,896 23,106,755 73,581,651 - Total assets 85,813,014 31,348, ,161,267 9,826 LIABILITIES Accounts payable 9,569,028 1,100,366 10,669,394 - Accrued liabilities 693,987 45, ,869 - Deferred revenue 117, ,562 - Other liabilities 957, ,786 - Liabilities payable from restricted assets: Current portion of long term debt 343, , ,537 - Customer deposits - 170, ,296 - Noncurrent liabilities: Due in more than one year 4,234,874 9,411,188 13,646,062 - Total liabilities 15,916,425 11,000,081 26,916,506 - NET POSITION Invested in capital assets, net of related debt 56,110,088 13,985,525 70,095,613 - Restricted for: Capital projects 1,334,232-1,334,232 - Unrestricted 12,452,269 6,362,647 18,814,916 9,826 Total net position $ 69,896,589 $ 20,348,172 $ 90,244,761 $ 9,826 The accompanying notes to the financial statements are an integral part of this statement. I-12

18 STATEMENT OF ACTIVITIES September 30, 2013 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental Activities : General government $ 12,118,255 $ 4,619,492 $ 289,909 $ 452,386 Court related 1,442, , Public safety 17,404,909 1,131, ,448 - Physical environment 3,285, , ,950 - Transportation 7,547,008 1,975,175 70,074 4,188,974 Economic environment 1,038,584 1, ,923 - Culture and recreation 807,152 7, ,064 - Human services 2,109, ,662 42, ,724 Interest on long-term debt 86, Total governmental activities 45,840,257 8,506,938 1,270,851 4,992,084 Business-type Activities : Water and Wastewater 2,309,532 1,325, Total primary government $ 48,149,789 $ 9,832,921 $ 1,270,851 $ 4,992,084 General revenues : Property taxes Gasoline taxes Communications taxes Other taxes Intergovernmental revenues Interest income Miscellaneous Total general revenues Change in net position Net position, beginning Net position, ending The accompanying notes to the financial statements are an integral part of this statement.

19 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (6,756,468) $ - $ (6,756,468) $ - (1,030,435) - (1,030,435) - (15,980,523) - (15,980,523) - (2,884,048) - (2,884,048) - (1,312,785) - (1,312,785) - (807,576) - (807,576) - (643,177) - (643,177) - (1,568,602) - (1,568,602) - (86,770) - (86,770) - (31,070,384) - (31,070,384) - - (983,549) (983,549) - (31,070,384) (983,549) (32,053,933) - 12,670,000-12,670,000-1,092,537-1,092, , ,772-6,025,306-6,025,306-7,513,344-7,513,344-17,616 2,878 20, ,875,544 67,989 1,943,533-29,352,119 70,867 29,422, (1,718,265) (912,682) (2,630,947) 15 71,614,854 21,260,854 92,875,708 9,811 $ 69,896,589 $ 20,348,172 $ 90,244,761 $ 9,826 I-13

20 BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2013 County Solid Transportation Waste General Trust Disposal ASSETS Cash and cash equivalents $ 1,851,529 $ 1,213,292 $ 376,810 Investments 5,188, Receivables (net) 3,541,684 2,312,545 5,254,351 Total assets $ 10,581,575 $ 3,525,837 $ 5,631,161 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 7,720,306 $ 437,665 $ 259,040 Accrued liabilities 613,607 43,484 3,929 Deferred revenue 117, Other liabilities 452, Total liabilities 8,903, , ,969 Fund balances Committed 5,000, Assigned - 3,044,688 5,368,192 Unassigned (3,322,363) - - Total fund balances 1,677,637 3,044,688 5,368,192 Total liabilities and fund balances $ 10,581,575 $ 3,525,837 $ 5,631,161 The accompanying notes to the financial statements are an integral part of this statement.

21 Other Governmental Funds Total Governmental Funds $ 7,596,631 $ 11,038,262-5,188,362 1,390,524 12,499,104 $ 8,987,155 $ 28,725,728 $ 1,152,017 $ 9,569,028 32, , , , ,786 1,690,307 11,338,363-5,000,000 7,656,310 16,069,190 (359,462) (3,681,825) 7,296,848 17,387,365 $ 8,987,155 $ 28,725,728 I-14

22 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION September 30, 2013 Fund Balances - total governmental funds $ 17,387,365 Capital assets used in governmental activities are not financial resources and are therefore not reported in the governmental funds Non-depreciable governmental capital assets $ 6,612,390 Depreciable governmental capital assets, net 50,474,896 57,087,286 Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds Notes payable (977,198) Capital leases (560,679) Landfill closure (165,020) Other Post Employment Benefits (1,159,804) Compensated absences (1,715,361) (4,578,062) Net position of governmental activities $ 69,896,589 The accompanying notes to the financial statements are an integral part of this statement. I-15

23 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 County Solid Transportation Waste General Trust Disposal REVENUES Taxes $ 12,827,773 $ 1,092,537 $ 909,059 Licenses and permits 248, Intergovernmental 5,135,078 5,211,951 70,588 Charges for services 5,623, , ,609 Fines and forfeitures Miscellaneous 439,514 15,762 88,949 Total revenues 24,274,803 6,732,395 1,280,205 EXPENDITURES Current General government 9,960, Court related 1,213, Public safety 14,037, Physical environment 413,649-1,773,134 Transportation - 5,290,799 - Economic environment 355, Culture and recreation 30, Human services 889, Capital outlay General government 48, Public safety 634, Physical environment Transportation 9, ,421 - Debt service Principal retirement 238, Interest and fiscal charges 66, Total expenditures 27,897,630 6,174,220 1,773,134 Excess (deficiencies) of revenues over (under) expenditures (3,622,827) 558,175 (492,929) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 490, Transfers in 14,151, Transfers out (11,810,091) - (36,000) Total other financing sources (uses) 2,831,896 - (36,000) Net change in fund balances (790,931) 558,175 (528,929) Fund balances - beginning 2,468,568 2,486,513 5,897,121 Fund balances - ending $ 1,677,637 $ 3,044,688 $ 5,368,192 The accompanying notes to the financial statements are an integral part of this statement.

24 Other Governmental Funds Total Governmental Funds $ 5,116,249 $ 19,945, ,183 3,250,815 13,668,432 2,145,901 8,392, , ,202 1,037,933 1,582,158 11,859,100 44,146, ,839 10,825, ,610 1,411,800 1,658,116 15,695, ,705 3,076,488 1,853,070 7,143, , , , ,492 33, ,803 1,848,849 1,897, , , , ,921 95, ,891 20,047 86,770 9,456,049 45,301,033 2,403,051 (1,154,530) - 490, ,793 14,303,798 (2,457,707) (14,303,798) (2,304,914) 490,982 98,137 (663,548) 7,198,711 18,050,913 $ 7,296,848 $ 17,387,365 I-16

25 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS For the Year ended September 30, 2013 Net change in fund balances - total governmental funds: $ (663,548) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation or amortization expense. This is the amount by which depreciation, amortization and capital asset adjustments were above capital outlays in the current period. (428,047) Debt proceeds provide current financial resources for governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Proceeds from the issuance of debt $ (490,982) Principal payments 333,891 (157,091) Certain expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Decrease in landfill closure liability 78,372 Change in compensated absences and other post employment benefits (547,951) Change in net position of governmental activities $ (1,718,265) The accompanying notes to the financial statements are an integral part of this statement. I-17

26 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2013 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 13,311,254 $ 13,311,254 $ 12,827,773 $ (483,481) Licenses and permits 250, , ,888 (1,112) Intergovernmental 4,764,671 4,953,492 5,135, ,586 Charges for services 5,353,143 5,579,295 5,623,550 44,255 Miscellaneous 360, , ,514 20,641 Total revenues 24,039,418 24,512,914 24,274,803 (238,111) EXPENDITURES Current General government 10,084,227 10,171,437 9,960, ,929 Court related 230,000 1,321,655 1,213, ,465 Public safety 13,332,009 13,721,513 14,037,065 (315,552) Physical environment 437, , ,649 19,949 Economic environment 399, , ,655 60,350 Culture and recreation 36,727 36,727 30,080 6,647 Human services 961, , ,856 71,533 Capital Outlay General government 95,800 87,142 48,159 38,983 Transportation - - 9,500 (9,500) Public safety 190, , , ,599 Debt service Principal retirement 120, , ,467 (79,443) Interest and fiscal charges 4,047 10,917 66,723 (55,806) Total expenditures 25,892,580 28,078,784 27,897, ,154 Deficiencies of revenues under expenditures (1,853,162) (3,565,870) (3,622,827) (56,957) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt - 490, ,982 - Transfers in 15,318,532 15,373,104 14,151,005 (1,222,099) Transfers out (13,135,903) (11,810,670) (11,810,091) 579 Total other financing sources (uses) 2,182,629 4,053,416 2,831,896 (1,221,520) Net change in fund balances 329, ,546 (790,931) (1,278,477) Fund balances - beginning (329,467) (487,546) 2,468,568 2,956,114 Fund balances - ending $ - $ - $ 1,677,637 $ 1,677,637 The accompanying notes to the financial statements are an integral part of this statement. I-18

27 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL COUNTY TRANSPORTATION TRUST For the Year Ended September 30, 2013 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 1,084,108 $ 1,084,108 $ 1,092,537 $ 8,429 Intergovernmental 6,613,008 6,613,008 5,211,951 (1,401,057) Charges for services 360, , ,145 52,145 Miscellaneous 37,500 37,500 15,762 (21,738) Total revenues 8,094,616 8,094,616 6,732,395 (1,362,221) EXPENDITURES Current Transportation 8,396,354 8,396,354 5,290,799 3,105,555 Capital outlay Transportation 1,474,325 1,433, , ,617 Total expenditures 9,870,679 9,829,392 6,174,220 3,655,172 Excess (deficiencies) of revenues over (under) expenditures (1,776,063) (1,734,776) 558,175 2,292,951 OTHER FINANCING SOURCES Transfers in 25,489 25,489 - (25,489) Total other financing sources 25,489 25,489 - (25,489) Net change in fund balance (1,750,574) (1,709,287) 558,175 2,267,462 Fund balance - beginning 1,750,574 1,709,287 2,486, ,226 Fund balance - ending $ - $ - $ 3,044,688 $ 3,044,688 The accompanying notes to the financial statements are an integral part of this statement. I-19

28 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SOLID WASTE DISPOSAL For the Year Ended September 30, 2013 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 921,069 $ 921,069 $ 909,059 $ (12,010) Intergovernmental 70,588 70,588 70,588 - Charges for services 223, , ,609 (11,459) Miscellaneous 81,579 81,579 88,949 7,370 Total revenues 1,296,304 1,296,304 1,280,205 (16,099) EXPENDITURES Current Physical environment 1,881,552 1,881,552 1,809,134 72,418 Capital outlay Physical environment 877, , ,500 Total expenditures 2,759,052 2,759,052 1,809, ,918 Net change in fund balance (1,462,748) (1,462,748) (528,929) 933,819 Fund balance - beginning 1,462,748 1,462,748 5,897,121 4,434,373 Fund balance - ending $ - $ - $ 5,368,192 $ 5,368,192 The accompanying notes to the financial statements are an integral part of this statement. I-20

29 STATEMENT OF NET POSITION PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System ASSETS Current Assets Cash and cash equivalents $ 832,851 Receivables (net) 4,007,538 Due from other governments 34,700 Inventory 5,433 Restricted Assets: Investments at fair value 2,823,970 Total current assets 7,704,492 Noncurrent Assets Capital Assets Non-depreciable 537,006 Depreciable 29,197,140 Less: accumulated depreciation (6,090,385) Total noncurrent assets 23,643,761 Total assets 31,348,253 The accompanying notes to the financial statements are an integral part of this statement.

30 STATEMENT OF NET POSITION - Continued PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System LIABILITIES Current liabilities Accounts payable 1,100,366 Accrued liabilities 45,882 Total current liabilities 1,146,248 Current liabilities payable from restricted assets Notes payable 126,949 Bonds payable 145,400 Customer deposits 170,296 Total current liabilities payable from restricted assets 442,645 Noncurrent liabilities Accrued compensated absences 25,301 Notes payable 2,429,887 Bonds payable 6,956,000 Total noncurrent liabilities 9,411,188 Total liabilities 11,000,081 NET POSITION Invested in capital assets, net of related debt 13,985,525 Unrestricted 6,362,647 Total net position $ 20,348,172 The accompanying notes to the financial statements are an integral part of this statement. I-21

31 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System OPERATING REVENUES Charges for services $ 1,325,983 Miscellaneous 67,989 Total operating revenues 1,393,972 OPERATING EXPENSES Personal services 350,200 Contractual services 78,717 Repairs and maintenance 63,358 Depreciation and amortization 972,746 Office 14,383 Supplies 48,631 Utilities 85,569 Other expense 168,000 Total operating expenses 1,781,604 Operating income (387,632) NON-OPERATING REVENUES (EXPENSES) Interest and fiscal charges (527,928) Interest revenue 2,878 Total non-operating (expenses) (525,050) Change in net position (912,682) Total net position - beginning 21,260,854 Total net position - ending $ 20,348,172 The accompanying notes to the financial statements are an integral part of this statement. I-22

32 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended September 30, 2013 Business-type Activiti Enterprise Funds Port LaBelle Utility System CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 1,665,396 Cash payments to suppliers for goods and services (432,590) Cash payments to employees for services (343,938) Net cash provided by operating activities 888,868 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Deposits collected from customers less deposits refunded to customers 6,282 Net cash provided by noncapital financing activities 6,282 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on notes payable and revenue bonds (260,837) Interest paid notes payable and revenue bonds (527,928) Net cash used in capital financing activities (788,765) CASH FLOWS FROM INVESTING ACTIVITIES: Interest on investments 2,878 Net cash provided by investing activities 2,878 Net increase in cash and cash equivalents 109,263 Cash and cash equivalents at beginning of year 723,588 Cash and cash equivalents at end of year $ 832,851 The accompanying notes to the financial statements are an integral part of this statement.

33 BOARD OF COUNTY COMMISSIONERS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Fiscal Year Ended September 30, 2013 Business-type Activities Enterprise Funds Port LaBelle Utility System Reconciliation of operating income to net cash provided by operating activities: Operating income $ (387,632) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 972,746 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 306,124 Due from other governments (34,700) Increase (decrease) in: Accounts payable 26,068 Accrued liabilities 6,262 Total adjustments 1,276,500 Net cash provided by operating activities $ 888,868 I-23

34 STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS As of September 30, 2013 Agency Funds ASSETS Cash and cash equivalents $ 1,779,813 Receivables (net) 1,194 Total assets $ 1,781,007 LIABILITIES Accounts payable 273,368 Due to other constitutional officers 42,410 Due to other governments 610,361 Due to individuals 384,052 Due to other funds 1,021 Deposits 469,795 Total liabilities $ 1,781,007 The accompanying notes to the financial statements are an integral part of this statement. I-24

35 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Hendry County (the County ) was created in 1923 by the Laws of Florida 1923, Chapter as amended, Section 7.26, Florida Statutes and is a political subdivision of the State of Florida. It is governed by an elected Board of County Commissioners (the Board ) which is a body of elected Constitutional Officers of Hendry County. Based on the criteria set forth by the Governmental Accounting Standards Board, the Board is a part of the County s primary government and its financial statements are included in the basic financial statements of Hendry County, Florida. However, Chapter 11.45, of the Florida Statutes defines the Board as a County agency. For the purposes of that section, County agencies are treated as local governmental agencies. Section , Rules of the Auditor General for Local Governmental Entity Audits, requires a separate financial audit report for each County agency. The accounts of the Board do not constitute a complete presentation of the County, but present only the financial position and results of operations of the Board. The accompanying financial statements present the combined financial position and results of operations of the County, by major fund, and non-major funds in aggregate, that are governed by the Board. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of Hendry County (the primary government) and its component units. A component unit is a legally separate organization for which the elected officials of the primary government are financially accountable. In addition, a component unit may be another organization for which the nature and significance of its relationship with a primary government is such that exclusion would cause the reporting entity s financial statements to be misleading or incomplete. In conformity with accounting principles generally accepted in the United States of America, the financial statements of the component units have been included in the financial reporting entity as a discretely presented component unit. Discretely Presented Component Unit Hendry County Industrial Development Authority is a predominantly dormant organization which convenes on an as needed basis. By Resolution 83-43, dated March 8, 1983, the Board appoints the members of the Authority and provides the funding for the Authority s operations when the Authority s approval is necessary to issue Industrial Revenue Bonds for development in the County. Hendry County Economic Development Council, Inc. (the Council) was incorporated on August 29, 1997 with operations beginning October 1, 1997 as a Florida not-for-profit corporation. The Council s purpose is to promote, develop, stimulate, and coordinate the economic development activities of governments, businesses, and educational institutions in Hendry County. The Council s mission is also to address issues affecting the economic development in Hendry County, as well as, to heighten community awareness of the related economic effect concerning these issues. I-25

36 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Discretely Presented Component Unit (Continued) The Council acts as an advocate for the promotion of the professions and skills necessary to sustain and expand economic growth by promoting, encouraging and coordinating education and vocational training in Hendry County. Complete financial information of the individual component units can be obtained directly from the Authority or the Council. Government-Wide and Fund Financial Statements The government-wide financial statements and the major-fund financial statements along with the notes to the financial statements comprise the basic financial statements. The government-wide financial statements (the statement of net position and the statement of activities) report on the Board as a whole and do not emphasize fund types but rather a governmental or a business-type classification, which are presented in separate columns. These statements report on the Board as a whole, both the primary government and its component units, and provide a consolidated financial picture of the Board of County Commissioners. As part of the consolidation process, inter-fund activities are eliminated to avoid distorted financial results. The Statement of Net Position reports all financial and capital resources of the Board s governmental and business-type activities. It is presented in a net position format (assets less liabilities equal net position) and shown with three components: amounts invested in capital assets, net of related debt; restricted net position; and unrestricted net position. The statement of activities reflects the expenses of a given function or segment, which are offset by program revenues. Program revenues are defined as charges for services, operating grants and contributions, and capital grants and contributions directly associated with a given function. Taxes are reported under general revenue. Program revenues are classified into three categories; charges for services, operating grants and contributions, and capital grants and contributions. Charges refer to direct recovery from customers for services rendered. Grants and contributions refer to revenues restricted for specific programs whose use may be restrictedfurther to operational or capital items. The general revenues section displays revenue collected that helps support all functions of our government and contribute to the change in the net position for the fiscal year. The Board s major funds are presented in separate columns on the governmental fund financial statements and the proprietary fund financial statements. The definition of a major fund is one that meets certain criteria setforth in GASB 34. The funds that do not meet the criteria of a major fund are considered non-major funds and are combined into a single column on the fund financial statements. I-26

37 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The accounts of the Board are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. Basis of accounting refers to when revenues and expenditures, or expenses, are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The government-wide financial statements are prepared on a full accrual basis using the economic resources measurement focus, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred. Property taxes are recognized in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all of the eligibility requirements have been met. Proprietary funds record both operating and non-operating revenues and expenses. Operating revenues are those that are obtained from the operations of the proprietary fund and include user fees. Non-operating revenues are not related to the operations of the proprietary fund and include interest and other miscellaneous earnings. Operating expenses represent the cost of operations, which includes depreciation. Non-operating expenses are not related to operations such as interest expense. Governmental fund financial statements are prepared on the modified accrual basis using the current financial resources measurement focus. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. The Board considers all revenues available if they are collected within sixty days after year-end. Primary revenues, such as property taxes, special assessments, intergovernmental revenues, charges for services, sales and franchise taxes, rents, and interest are treated as susceptible to accrual under the modified accrual basis and have been recognized as revenues. Expenditures reported in governmental fund financial statements are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule includes principal and interest on general long-term debt, which is recognized when due. The business-type activities reported in the government-wide financial statements and proprietary funds follow private sector standards issued prior to December 1, 1989, to the extent those standards do not conflict with Governmental Accounting Standards Board statements. I-27

38 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) However, pursuant to Government Accounting Standards Board Statement Number 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the Board has elected not to apply accounting standards issued after November 30, 1989, by the Financial Accounting Standards Board. When both restricted and unrestricted resources are available, restricted resources will be used first for incurred expenses, and then unrestricted as needed. The Board reports the following major funds in the governmental fund financial statements: General Fund The General Fund is the general operating fund of the Board that is used to account for all financial resources, except those required to be accounted for in another fund. County Transportation Trust Fund The County Transportation Trust Fund construction and maintenance of roadways. accounts for revenues received and expended for the Solid Waste Disposal Fund The Solid Waste Disposal Fund is used to account for the activities related to the solid waste disposal program. Non-major Governmental Funds The non-major governmental funds are a combination of special revenue, debt service, and capital projects funds. I-28

39 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Budgets and Budgetary Accounting Chapters 129 and 200 of the Florida Statutes govern the preparation, adoption and administration of the Board s annual budget. The budget is required to be balanced; that is; the total of the estimated revenues, including balances brought forward, shall equal the total of the appropriations and reserves. The following procedures are followed by the Board in establishing the operating budget: (1) On or before July 15, a tentative budget for the fiscal year commencing the following October 1 is presented to the Board. (2) The tentative budget is reviewed by the Board and any necessary changes are made. (3) Public hearings are conducted to inform the taxpayers of the tentative budget and proposed tax levies and to obtain taxpayer comments. (4) On or before September 30, the budget is legally adopted through passage of a resolution. (5) (6) (7) (8) (9) Section of the Florida Statutes prohibits incurring expenditures in excess of total fund appropriations. Formal budgetary integration is employed as a management control device during the year in all Governmental Fund Types. Estimated beginning fund balances are considered in the budgetary process, but are not included in the financial statements as budgeted revenue. Budgets for General, Special Revenue, Debt Service and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Formal budgetary integration is employed as a management control device during the year in all Governmental Fund Types. Estimated beginning fund balances are considered in the budgetary process, but are not included in the financial statements as budgeted revenue. Budgets for General, Special Revenue, Debt Service and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The annual budgets serve as the legal authorization for expenditures. Expenditures cannot legally exceed the total amount budgeted for each fund. The Board must approve all budget amendments, which change the legally adopted total appropriation for a fund. If, during the fiscal year, additional revenues become available for appropriation in excess of those estimated in the budget, the Board may make supplemental appropriations by resolution for the year up to the amount of such excess. During the fiscal year the Board, in accordance with Florida Statutes, approved various supplemental appropriations. Appropriations lapse at fiscal year-end. I-29

40 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity Cash and Investments The Board considers cash and cash equivalents to be cash on hand, demand deposits, highly liquid investments, including those held as restricted assets, with original maturities of three months or less when purchased, and those included in the internal investment pool. For accounting and investment purposes, the Board maintains a cash pool that is available for use by all funds except those whose cash and investments may be segregated due to legal or other restrictions. Interest earned on investments in the pool is allocated to the various funds based upon each fund s equity balance in the pool during the allocation period. The Board reports all investments at fair value. Inventories Inventories, consisting primarily of materials and supplies, are stated at cost, which approximates fair market value. The first-in, first-out method of accounting is used to determine cost. All inventories are recorded as expenditures, or expenses, as they are used (consumption method). Capital Assets Capital assets include property, plant, and equipment. Infrastructure assets are defined as public domain fixed assets such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar assets that are immovable and of value only to the government unit. Pursuant to GASB Statement No. 34, the County, a Phase 3 government, has elected to report infrastructure retroactively. Retroactive infrastructure is reported at the estimated historical cost. Capital assets are reported in the government-wide financial statements in the applicable governmental or business-type activities column, as well as the proprietary fund financial statements. The threshold for capitalizing property, plant, and equipment is $5,000. The threshold for capitalizing infrastructure is $100,000. Capital assets are recorded at cost, or estimated historical cost. Contributed assets are recorded at estimated fair market value at the time received. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Florida Statutes require that the Board maintain accountability for all assets used in operations, except those maintained by the Sheriff. I-30

41 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity (Continued) Capital Assets (continued) The ranges of the useful lives are as follows: Asset Years Buildings Infrastructure Improvements other than Buildings 6-50 Equipment 3-35 Computer Equipment 3-10 Furniture 4-20 Vehicles & rolling stock 3-15 New Accounting Standards Beginning with fiscal year 2013, the County implemented GASB Statement No. 63; Financial Reporting of Deferred Outfows of Resources, Deferred inflows of Resources, and Net Position. This statement amends the net asset reporting requirements in Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, and other pronouncements. This statement requres a Statement of Net Position (rather that net assets) format which segregates deferred inflows and deferred outflows from assets and liabilities respectively. Specific items required to be broken out as deferred inflows or deferred outflows are discussed in GASB Statements 53 and 60. These items are Derivative Investments and Service Concession Arrangements respectively. None of these items affect the County at this time. The other portion of GASB Statement 63 is nomenclature. Statement No. 64; Derivative Instuments: Application of Hedge Accounting Termination Provisions is not applicable to Hendry County. Compensated Absences The Board maintains a policy that permits employees to accumulate earned but unused vacation and sick pay benefits that will be paid to employees upon separation from Board service if certain criteria are met. These benefits, plus their related tax and retirement costs are classified as compensated absences. Both the current and long-term portion of compensated absences are accrued and reported in the government-wide and proprietary fund financial statements. This is accounted for pursuant to GASB Statement Number 16, Accounting for Compensated Absences. Net Position / Fund Balance Classification Governmental funds report fund balances as either nonspendable or spendable. Spendable fund balances are further classified as restricted, committed, assigned or unassigned, based on the extent to which there are external or internal constraints on the spending of these fund balances. I-31

42 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity (Continued) Net Position / Fund Balance Classification (Continued) Nonspendable fund balances include amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact. The County considers inventories and prepaid items as part of this category, as well as long-term receivables from which proceeds are not restricted, committed, or assigned. Spendable Fund Balances: Restricted Fund Balance: Amounts that are restricted to specific purposes, and are restricted through enabling legislation and are legally enforceable. The legislation that creates the revenue stream must also stipulate the purposes for which that revenue can be used. Committed Fund Balance: Amounts that are committed for specific purposes by formal action of the governments highest level of decision making authority. These amounts are not subject to legal enforceability as in restricted, however those amounts cannot be used for any other purpose unless the government removes or changes the limitation by taking the same form of action it employed to previously impose the limitation. Assigned Fund Balance: Amounts that are intended by the government to be used for specific purposes but are neither restricted nor limited. Intent should be expressed by (a) the governing body itself, or (b) a subordinate high-level body or official possessing the authority to assign amounts to be used for specific purposes. Unassigned Fund Balance: Is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, limited, or assigned to specific purposes within the general fund. Government-wide statements and proprietary fund statements utilize an economic resources measurement focus and categorize net position among the following components: Invested in Capital Assets, Net of Related Debt indicates that portion of net position which represents the County s equity in capital assets, less the amount of related debt. Restricted Net Position indicates that portion of net position which are segregated due to external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position indicates that portion of net position which is available for general operations. I-32

43 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 2 - PROPERTY TAXES Property taxes become due and payable on November 1 of each year and are delinquent on April 1 of the following year. Discounts on property taxes are allowed for payments made prior to the April 1 delinquent date. Tax certificates for the full amount of any unpaid taxes must be sold no later than June 1 of each year. No accrual for the property tax levy becoming due in November 2013 is included in the accompanying financial statements, since such taxes are collected to finance expenditures of the subsequent period. Procedures for collecting delinquent taxes, including applicable tax certificate sales and tax deed sales, are provided by Florida Statutes and are performed by the Hendry County Tax Collector. The enforceable lien date is approximately two years after taxes become delinquent and occurs only upon request of a holder of a delinquent tax certificate. There was no significant delinquent property taxes receivable at September 30, Important dates in the property tax cycle are as follows: - Assessment roll certified- July 1 - Millage resolution approved- no later than 93 days following certification of assessment roll - Beginning of fiscal year for which taxes have been levied- October 1 - Taxes due and payable (levy date)- November 1 - Property taxes payable (maximum discount of 4 percent)- 30 days after levy date - Due date- March 31 - Taxes become delinquent (lien date)- April 1 - Tax certificate sold- prior to June 1 NOTE 3 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Deficit fund balances The East Hendry County Fire District has a deficit fund balance of $233,904. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. The East Hendry County Recreational MSBU has a deficit fund balance of $194,224. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. NOTE 4 - CASH, CASH EQUIVALENTS AND INVESTMENTS All Board depositories are banks or savings institutions designated by the State Treasurer as qualified public depositories. Chapter 280, Florida Statues Florida Security for Public Deposits Act provides procedures for public depositories to insure monies in banks and savings and loans are collateralized with the Treasurer as an agent for the public entities. I-33

44 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 4 - CASH, CASH EQUIVALENTS, AND INVESTMENTS (CONTINUED) The Public Deposit Security Trust Fund has a procedure to allocate and recover losses in the event of a default or insolvency. When public deposits are made in accordance with Chapter 280, no public depositor shall be liable for any loss thereof. Chapter 280 defines deposits as time deposit accounts, demand deposit accounts, and certificates of deposit. The total amount of bank deposits, $20,723,258, is insured by Federal depository insurance and pursuant to Chapter 280, Florida Statutes. Board investments are made in accordance with the provisions of Section , Florida Statutes Investment of Local Government Surplus Funds. Authorized investments include U.S. Government obligations, passbook savings accounts, tax-exempt State and municipal securities, certificates of deposit, Local Government Surplus Funds Investment Pool Trust Fund (SBA), the Florida Local Government Investment Trust (FLGIT), and any other investments authorized by Chapter 218, Florida Statutes. There were no violations of this policy during the fiscal year. NOTE 5 - ACCOUNTS RECEIVABLE At September 30, 2013, receivables were as follows: Enterprise: Labelle Utility Accounts receivable $ 4,042,238 Less: allowance for bad debt - Total receivables $ 4,042,238 NOTE 6 - SPECIAL ASSESSMENT In connection with the Port LaBelle Utility System (PLUS), the Board has commenced a phased construction program to provide utility service to vacant lots in Units 1 9 in Hendry County and Unit 102 in Glades County. The costs of the improvements are to be financed by special assessments levied against individual lots. The remaining balance of the assessment (if any) is to be paid over a twenty-year period through the real estate tax collection process. Interest at 7% is to be charged on the unpaid balance. The special assessment rate for lots in Hendry County is $975 per lot, and the rate per lot in Glades County is $1,080 per lot. NOTE 7 - RESTRICTED ASSETS AND LIABILITIES Restricted assets of the proprietary fund represent monies to be restricted for debt service, renewal and replacement, capital improvements and construction, and customer deposits under the terms of outstanding bond agreements, resolutions, and other contractual agreements. I-34

45 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 7 - RESTRICTED ASSETS AND LIABILITIES (CONTINUED) Restricted assets reported on the proprietary fund statement of net position at September 30, 2013, were as follows: Port LaBelle Utility Restricted cash and investments $ 2,823,970 Assets restricted for debt service are for the payment of bond principal and interest and bond reserve requirements. Assets restricted for renewal and replacement are for the payment of unusual or extra-ordinary maintenance or repairs. Additionally, assets are restricted for capital improvements and construction. Customer deposits are advance payments held until certain conditions are met. Liabilities payable from restricted assets were at September 30, 2013 comprised of the following: Port LaBelle Utility Current portion of long-term debt $ 272,349 Customer deposits 170,299 Total $ 442,648 NOTE 8 - CAPITAL ASSETS Depreciation cost was charged to functions as follows: Governmental activities: General government Court related Public safety Physical environment Transportation Economic environment Culture and recreation Human services $ 877,848 30,701 1,389, , ,139 89,411 75,661 1,185,668 Total depreciation cost for governmental activities $ 4,260,758 I-35

46 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 8 - CAPITAL ASSETS (CONTINUED) Business-type activities: Water and wastewater depreciation cost $ 972,746 Capital asset activity for the fiscal year ended September 30, 2013 was as follows: Governmental Activites Beginning Ending Balance Increases Decreases Balance Capital Assets not being depreciated: Land $ 5,978,396 $ 633,994 $ - $ 6,612,390 Total capital assets not being depreciated 5,978, ,994-6,612,390 Capital assets being depreciated: Buildings and improvements 67,805,584 2,612,779-70,418,363 Furniture and equipment 32,041, ,396 (160,275) 32,655,485 Infrastructure 54,433, ,433,754 Total capital assets being depreciated 154,280,702 3,387,175 (160,275) 157,507,602 Less accumulated depreciation for: Buildings and improvements 25,126,219 2,059,680-27,185,899 Furniture and equipment 23,372,250 2,201,078 (160,275) 25,413,053 Infrastructure 54,433, ,433,754 Total accumulated depreciation 102,932,223 4,260,758 (160,275) 107,032,706 Total capital assets being depreciated, net 51,348,479 (873,583) - 50,474,896 Total governmental activities capital assets, net $ 57,326,875 $ (239,589) $ - $ 57,087,286 Business-Type Activities: Capital assets not being depreciated: Land $ 537,006 $ - $ - $ 537,006 Total capital assets not being depreciated 537, ,006 Capital assets being depreciated: Buildings & Infrastructure 29,014, ,014,590 Furniture and equipment 182, ,550 Total capital assets being depreciated 29,197, ,197,140 Less accumulated depreciation for: Buildings & Infrstructure 4,940, ,956-5,900,610 Furniture and equipment 176,985 12, ,775 Total accumulated depreciation 5,117, ,746-6,090,385 Total capital assets being depreciated, net 24,079,501 (972,746) - 23,106,755 Total business-type activities capital assets, net $ 24,616,507 $ (972,746) $ - $ 23,643,761 I-36

47 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT Business Type - Notes Payable & Revenue Bonds Notes Payable $1,430,705 bank loan, bearing interest at a rate of 7%, (15) annual payments of $157,084. Final payment due September $ 1,312,852 $1,355,656 bank loan, bearing interest at a rate of 7%, (15) annual payments of $148,844. Final payment due September ,243,984 Total business type - notes payable 2,556,836 Revenue Bonds The Board issued revenue bonds for business-type activities. The descriptions and balances of the outstanding revenue bonds as of September 30, 2008, were as follows: $4,700,000 Hendry County, Water and Sewer System Revenue Bonds, Series 1996, bearing interest of 5% payable on September 1, 1996 and annually thereafter on September 1, with principal maturing from September 1, 1997 to September 1, ,635,400 $3,689,000 Hendry County, Water and Sewer System Revenue Bonds, Series 2007, bearing interest of 4.125% payable on September 1, 2007 and annually thereafter on September 1, with principal maturing from September 1, 2010 to September 1, ,466,000 Total business type - revenue bonds Total Business-Type Long-Term Debt 7,101,400 9,658,236 Government Funds - Notes Payable, Capital Leases, & Other Payables Notes Payable $621,833 capital equipment lease, bearing interest at a rate of 4.0%, one annual payment of $85,668. Final payment due June $ 234,948 $25,547 loan from a financial institution for the purpose of machinery, bearing interest at a variable rate which was 4.275% at September 30, 2012, quarterly payments of $1426. Final payment due October ,663 $650,000 loan from a financial institution for the purchase of airplane hangars bearing interest at a rate of 2.625%, annual payments of differing values. Final payment due January ,766 $450,000 loan from a financial institution used for road improvements, bearing interest at a rate of 4.5%, annual payments of $80,000. Final payment due October ,685 I-37

48 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) Government Funds - Notes Payable, Capital Leases & Other Payables (Continued) Note Payables (Continued) $125,363 bank loan for the purchase of an ambulance, bearing interest at a rate of 3.5%, with three annual payments of $40,000. Final payment due February ,870 $67,556 bank loan for the purchase of a fire truck, bearing interest at a rate of 3.5%, with equal annual payments of $20,000. Final payment due February ,409 $260,000 bank loan for the purchase of a new 800MHz communication system, bearing interest at a rate of 2.99%, with equal annual payments of $37,143. Final payment due December 28, ,857 Total governmental - notes payable 977,198 Capital Leases On June 26, 2012, the Hendry County Sheriff entered into a leasing agreement for ten squad cars for $361,116, bearing interest at a rate of 13.24%, annual principal payments of $90,290. Final payment due June 30, ,862 On June 1, 2013, the Hendry County Sheriff entered into a leasing agreement for one squad car to be used by the Sheriff for $36,556 bearing interest at a rate of 12.56%, annual principal payments of $9,139. Final payment due May 31, ,993 On August 15, 2013, the Hendry County Sheriff entered into a leasing agreement for six squad cars for $266,372 bearing interest at a rate of 12.56%, annual principal payments of $66,593. Final payment due September 15, ,770 On September 20, 2013, the Hendry County Sheriff entered into a leasing agreement for four K-9 SUVs for $188,054 bearing interest at a rate of 12.56%, annual principal payments of $47,013. Final payment due September 30, ,054 Total governmental - capital leases 560,679 Other Payables Post-closure care costs for monitoring of the landfill for twenty years after the landfill has stopped accepting waste and the final cover has been completed. The County has 4 years remaining. 165,020 Total governmental - other payables 165,020 Total Government Funds Long-Term Debt 1,702,897 TOTAL LONG-TERM DEBT $ 11,361,133 I-38

49 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) The annual debt service requirements at September 30, 2013, were as follows: Government Funds Business-type Long-Term Debt Long-Term Debt Total Fiscal Year(s) Principal Interest Principal Interest Principal Interest 2014 $ 343,188 $ 41,735 $ 272,349 $ 506,451 $ 615,537 $ 548, ,785 55, , , , , ,956 44, , , , , ,456 26, , , , , ,018 4, , , , , ,494 2, , , , , , , , , ,271,423 1,626,386 2,271,423 1,626, ,671, ,538 1,671, , ,747, ,143 1,747, , , , , , ,021, ,444 1,021, ,444 Total $ 1,702,897 $ 175,178 $ 9,658,236 $ 6,877,759 $ 11,361,133 $ 7,052,937 Bond Resolutions The resolution for the bonds established certain accounts and determined the order in which certain revenues are to be deposited into those accounts. In addition, there are various other covenants established by the official statements and Board resolutions, including such items as debt service coverage, reporting requirements, and maintenance of facilities. Management believes that it has complied, in all material respects, with these covenants. The 1996 Series Bonds pledge the net revenues of the utility system for the payment of the principal, redemption price and the interest on the bonds. The Board covenants to fix, establish, and maintain rates and to collect such revenues from the product and services to provide in each fiscal year net revenues which at least equal the annual debt service on all of the outstanding bonds. I-39

50 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) Bond Resolutions (Continued) Changes in bonded and other indebtedness of the Board for the year ended September 30, 2013, was as follows: Beginning Ending Balance Balance Due Within 10/1/2012 Additions Reductions 9/30/2013 One Year Governmental Activities Notes payable $ 963,357 $ 260,000 $ (246,159) $ 977,198 $ 254,920 Capital Leases 228, ,982 (159,274) 560,679 47,013 Landfill Closure 243,392 - (78,372) 165,020 41,255 Other Post Employment Benefits 876, ,491-1,159,804 - Compensated absences 1,450, ,085 (67,625) 1,715,361 - Total governmental activities long-term liabilities $ 3,762,934 $ 1,366,558 $ (551,430) $ 4,578,062 $ 343,188 Business-Type Activities Port LaBelle Utility Systems Notes payable $ 2,675,479 $ - $ (118,643) $ 2,556,836 $ 126,949 Revenue bonds 7,239,300 - (137,900) 7,101, ,400 Compensated absences 29,593 - (4,292) 25,301 - Total business-type activities long-term liabilities $ 9,944,372 $ - $ (260,835) $ 9,683,537 $ 272,349 NOTE 10 - LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS State and Federal laws and regulations require that Hendry County place a final cover on its landfill that was closed and perform certain maintenance and monitoring functions at the landfill site for twenty years after closure. The liability is being recognized based on the future post closure costs that will be incurred after the date the landfill no longer accepts waste. The landfill stopped accepting solid waste on December 1, 1992, and finished placing the required cover on the landfill during the fiscal year ended September 30, Since the landfill is closed, the estimated liability is based on the current estimated costs for services to monitor and maintain the closed landfill for the required period. However, the actual cost of postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The Board is required by state and federal regulations to make annual contributions to finance the post closure care. The Board has set aside funds in the amount of $41,255 for post closure care. The funding for costs for providing the final cover was provided by Lee County under the interlocal agreement for the joint solid waste disposal program. I-40

51 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 11 - CONTINGENCIES Grants and Assistance Activities of certain funds of the Board are financed in whole or in part by various forms of grants and assistance, principally from the federal government. There can be no absolute assurance that such assistance will continue in the future at the present levels. Amounts received from grantor agencies are subject to audit or adjustment by the grantor agencies. Also, any amounts disallowed could constitute liabilities of the applicable funds. Litigation The Board, in accordance with the normal conduct of its affairs, is involved in various judgments, claims, and litigation. It is expected that the final settlement of these matters will not materially affect the financial statements of the Board. NOTE 12 - RETIREMENT PLAN Plan Description and Provisions The Board participates in the Florida Retirement System (FRS), a cost sharing, multiple-employer, public employee retirement system, which covers substantially all of the full-time and part-time employees. The FRS is noncontributory and is totally administered by the State of Florida. Benefits under the plan vest after six years of service. Employees who retire at or after age 62 (age 55 for special risk) or 30 years of service (25 years for special risk), with six years of credited service, are entitled to an annual retirement benefit, payable monthly for life. The FRS also provides for early retirement at reduced benefits and death and disability benefits. These benefit provisions and all other requirements are established by Chapters 112 and 121, Florida Statutes. Effective July 1, 2011, covered members are required to contribute 3% of gross earnings. The County is required to make contributions based on actuarially determined statewide contribution rates. The contribution rates by job class for the periods from October 1, 2012 through June 30, 2013 and July 1, 2013 through September 30, 2013, respectively, were as follows: regular, 5.18% and 6.95%; senior management, 6.30% and 18.31%; county elected officers, 10.23% and 33.03%; special risk, 14.90% and 19.06%; and DROP participants, 5.44% and 12.84%. The County s contributions made during the years ended September 30, 2013, 2012, and 2011 were $1,479,013, $1,345,489, and $2,059,144, respectively, equal to the required contributions for each year. A copy of the FRS s June 30, 2013 annual report can be obtained by writing to the Division of Retirement, 2639 North Monroe Street, Building C, Tallahassee, Florida , or by phoning (850) I-41

52 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 13 - RISK MANAGEMENT The Board is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The County is a member of Public Risk Management (PRM), a local government liability risk pool. PRM administers insurance activities relating to property, general, automobile, public official's liability, workers compensation, health, and auto physical damage. The pool assesses each member its pro rata share of the estimated amount required to meet current year losses, operating expenses and reinsurance costs (premiums). To reduce its exposure to large losses on all types of insured events PRM uses reinsurance policies purchased from third parties. The Fund is fully funded annually. Major uninsurable risks include damages to infrastructure assets and damages or governmental fines due to seepage, pollution, or contamination of any kind. Since the amounts of loss cannot be reasonably estimated and the likelihood is undeterminable, no provision for such occurrences is included in these financial statements. NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS Plan Description In accordance with Section , Florida Statutes, because the Board provides medical plans to employees of the County and their eligible dependents, the Board is also required to provide retirees the opportunity to participate in the group employee health plan. Retirees participating in the group insurance plans offered by the County are required to contribute 100% of the active participants cost of participation. Eligibility for Insurance Coverage Employees of the County and all constitutional officers who were participants in the existing medical plan at the time of retirement are entitled to participate in the Plan. Depending on the class of employee the following eligibility rules apply: Regular Class and Elected Officials - Age 62 and 6 years of service or 30 years of service, regardless of age, is normal retirement. Employees may retire early at age 43 and 6 years of service. Special Risk - Age 55 and 6 years of service or 25 years of service, regardless of age is normal retirement. Employees may retire early at age 36 and 6 years of service. Membership As of September 30, 2013, membership consisted of: Active Employees 344 Retired Participants 9 Covered Spouses 1 I-42

53 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Funding Policy Funding for this plan is on a pay-as-you-go basis. The Program is currently unfunded. There is no separate trust through which benefits for retirees are funded. No assets are currently accumulated or earmarked for this purpose. Annual OPEB Costs and Net OPEB Obligation Hendry County had an actuarial valuation performed for the plan as of October 1, 2012 to determine the funded status of the plan as of that date, as well as the employer's annual required contribution (ARC) for the fiscal year ended September 30, The County s annual OPEB cost for the fiscal year was set at $346,158 as the transition liability was set to zero as of September 30, The County s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represnets a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the County's annual OPEB cost for the year and changes in the County's net OPEB obligation. Annual Required Contribution (ARC) $ 360,944 Interest on Net OPEB Obligation 39,434 Adjustment to Annual Required Contribution (54,220) Annual OPEB Cost 346,158 Contributions Made (62,667) Increase in Net OPEB Obligation 283,491 Beginning, Net OPEB Obligation, 10/01/ ,313 Ending, Net OPEB Obligation, 9/30/2013 $ 1,159,804 The County's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation are as follows: Fiscal Year Ended Annual OPEB Cost % of Annual OPEB Cost Contributed Net OPEB Obligation September 30, 2013 $ 346, % $ 1,159,804 September 30, 2012 $ 296, % $ 876,313 September 30, 2011 $ 294, % $ 634,541 I-43

54 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) The net OPEB obligation is reflected in the government-wide financial statements. The funded status of the plan as of September 30, 2013 was as follows: Actuarial Accrued Liability (AAL) $ 2,387,378 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 2,387,378 Covered Payroll $ 11,950,655 Ration of UAAL to Covered Payroll 20.0% NOTE 15 - COMMITMENTS Operating Leases On September 20, 2013, the Hendry County Sheriff entered into a leasing agreement for ten vehicles for $168,333, bearing interest at a rate of 15.73%, annual principal payments of $41,891. Final payment due September 30, $ 127,921 Total operating leases $ 127,921 The annual commitments requirement for operating leases at September 30, 2013, were as follows: Operating Lease - Commitments Fiscal Year(s) Principal Interest Total 2014 $ 3,747 $ 396 $ 4, ,891 7,821 49, ,891 7,821 49, ,392 7,610 48,002 Total $ 127,921 $ 23,648 $ 151,569 I-44

55 NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 15 - COMMITMENTS (CONTINUED) Fund Balance Commitments The County adopted a resolution to commit $5,000,000 of the General Funds' fund balance for a disaster emergency reserve to enable the County to properly respond to emergencies affecting the County caused by natural and other disasters. I-45

56 REQUIRED SUPPLEMENTARY INFORMATION

57 COMBINING SCHEDULE - BALANCE SHEET GENERAL FUND As of September 30, 2013 Board of County Clerk of Property Commissioners Circuit Court Appraiser Sheriff ASSETS Cash and cash equivalents $ 804,900 $ 286,530 $ 36,637 $ 605,207 Investments 5,188, Receivables, net 3,347,282 75,799-56,882 Total assets $ 9,340,544 $ 362,329 $ 36,637 $ 662,089 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 7,493,828 $ 24,950 $ - $ 195,282 Accrued liabilities 93,449 39,299 25, ,473 Deferred revenue - 117, Other liabilities 75, ,518 10,728 23,334 Total liabilities 7,662, ,329 36, ,089 Fund balances Committed 5,000, Assigned Unassigned (3,322,363) Total fund balances 1,677, Total liabilities and fund balances $ 9,340,544 $ 362,329 $ 36,637 $ 662,089

58 Supervisor Tax of Elections Collector Total $ 7,553 $ 110,702 $ 1,851, ,188,362-61,721 3,541,684 $ 7,553 $ 172,423 $ 10,581,575 $ - $ 6,246 $ 7,720,306-11, , ,562 7, , ,463 7, ,423 8,903, ,000, (3,322,363) - - 1,677,637 $ 7,553 $ 172,423 $ 10,581,575 I-46

59 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GENERAL FUND As of September 30, 2013 Board of County Clerk of Property Commissioners Circuit Court Appraiser Sheriff REVENUES Taxes $ 12,827,773 $ - $ - $ - Licenses and permits 248, Intergovernmental 4,993, ,205 Charges for services 1,832,877 1,002,606 1,065, ,174 Miscellaneous 318,730-50,493 59,030 Total revenues 20,222,116 1,002,954 1,116, ,409 EXPENDITURES Current General government 6,294, ,616 1,051,054 - Court related - 1,002, ,236 Public safety 3,801, ,236,002 Physical environment 413, Economic environment 355, Culture and recreation 30, Human services 889, Capital outlay General government 36, Public safety ,778 Transportation 9, Debt service Principal retirement 79, ,231 Interest and fiscal charges 11, ,316 Total expenditures 11,921,562 1,827,570 1,051,054 11,295,563 Excess (deficiencies) of revenues over (under) expenditures 8,300,554 (824,616) 65,308 (10,904,154) OTHER FINANCING SOURCES (USES) Proceeds from financing ,982 Transfers in 2,440, ,413-10,436,506 Transfers out (11,532,399) (26,797) (65,308) (23,334) Total other financing sources (uses) (9,091,485) 824,616 (65,308) 10,904,154 Net change in fund balances (790,931) Fund balances - beginning 2,468, Fund balances - ending $ 1,677,637 $ - $ - $ -

60 Supervisor Tax of Elections Collector Total $ - $ - $ 12,827, ,888 2,677-5,135,078 7,239 1,520,785 5,623,550 6,458 4, ,514 16,374 1,525,588 24,274, ,993 1,359,346 9,960, ,213, ,037, , , , ,856-11,542 48, , , , , ,993 1,370,888 27,897,630 (414,619) 154,700 (3,622,827) , ,172-14,151,005 (7,553) (154,700) (11,810,091) 414,619 (154,700) 2,831, (790,931) - - 2,468,568 $ - $ - $ 1,677,637 I-47

61 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND As of September 30, 2013 Board of County Commissioners Clerk of Circuit Court Budget Actual Budget Actual REVENUES Taxes $ 13,311,254 $ 12,827,773 $ - $ - Licenses and permits 250, , Intergovernmental 4,801,076 4,993, Charges for services 1,799,500 1,832,877 1,091,655 1,002,606 Miscellaneous 377, , Total revenues 20,539,184 20,222,116 1,091,655 1,002,954 EXPENDITURES Current General government 6,364,614 6,294, , ,616 Court related - - 1,091,655 1,002,954 Public safety 3,526,993 3,801, Physical environment 433, , Economic environment 416, , Culture and recreation 36,727 30, Human services 961, , Capital outlay General government 69,800 36, Transportation - 9, Public safety Debt Service Principal retirement 74,024 79, Interest and fiscal charges 10,917 11, Total expenditures 11,894,067 11,921,562 1,943,066 1,827,570 Excess (deficiencies) of revenues over (under) expenditures 8,645,117 8,300,554 (851,411) (824,616) OTHER FINANCING SOURCES (USES) Proceeds from Financing Transfers in 3,653,099 2,440, , ,413 Transfers out (11,810,670) (11,532,399) - (26,797) Total other financing sources (uses) (8,157,571) (9,091,485) 851, ,616 Net change in fund balances 487,546 (790,931) - - Fund balances - beginning (487,546) 2,468, Fund balances - ending $ - $ 1,677,637 $ - $ -

62 Property Appraiser Sheriff Supervisor of Elections Budget Actual Budget Actual Budget Actual $ - $ - $ - $ - $ - $ , ,205-2,677 1,065,625 1,065, , ,174-7,239-50,493 41,519 59,030-6,458 1,065,625 1,116, , ,409-16,374 1,065,625 1,051,054 50, , , , , ,194,520 10,236, , , , , , ,065,625 1,051,054 11,318,897 11,295, , ,993-65,308 (10,927,488) (10,904,154) (432,088) (414,619) , , ,436,506 10,436, , ,172 - (65,308) - (23,334) - (7,553) - (65,308) 10,927,488 10,904, , , $ - $ - $ - $ - $ - $ - I-48

63 COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (CONTINUED) GENERAL FUND As of September 30, 2013 Total Tax Collector Variance - Positive Budget Actual Budget Actual (Negative) REVENUES Taxes $ - $ - $ 13,311,254 $ 12,827,773 $ (483,481) Licenses and permits , ,888 (1,112) Intergovernmental - - 4,953,492 5,135, ,586 Charges for services 1,425,041 1,520,785 5,579,295 5,623,550 44,255 Miscellaneous - 4, , ,514 20,641 Total revenues 1,425,041 1,525,588 24,512,914 24,274,803 (238,111) EXPENDITURES Current General government 1,407,699 1,359,346 10,171,437 9,960, ,929 Court related - - 1,321,655 1,213, ,465 Public safety ,721,513 14,037,065 (315,552) Physical environment , ,649 19,949 Economic environment , ,655 60,350 Culture and recreation ,727 30,080 6,647 Human services , ,856 71,533 Capital outlay General government 17,342 11,542 87,142 48,159 (36,617) Transportation ,500 Public safety , , ,599 Debt Service Principal retirement , ,467 (79,443) Interest and fiscal charges ,917 66,723 (55,806) Total expenditures 1,425,041 1,370,888 28,078,784 27,897, ,154 Excess (deficiencies) of revenues over (under) expenditures - 154,700 (3,565,870) (3,622,827) (56,957) OTHER FINANCING SOURCES (USES) Proceeds from Financing , ,982 - Transfers in ,373,104 14,151,005 (1,222,099) Transfers out - (154,700) (11,810,670) (11,810,091) 579 Total other financing sources (uses) - (154,700) 4,053,416 2,831,896 (1,221,520) Net change in fund balances ,546 (790,931) (1,278,477) Fund balances - beginning - as restated - - (487,546) 2,468,568 2,956,114 Fund balances - ending $ - $ - $ - $ 1,677,637 $ 1,677,637 I-49

64 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Port Labelle Law Court Local Street Enforcement Section 8 Technology Affordable Emergency Lighting Trust Housing Fund Housing 911 District ASSETS Cash and cash equivalents $ 2,207 $ 50,694 $ 37,530 $ 446,218 $ 51,660 $ 5,645 Prepaid expenses Receivables (net) - - 3, , Total assets $ 2,207 $ 50,694 $ 40,600 $ 446,228 $ 71,085 $ 5,892 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ 246 $ 4,109 $ 17 $ 10,822 $ 5,815 Accrued liabilities Deferred revenue Other liabilities , Total liabilities , ,539 10,865 5,815 Fund balances Assigned 2,207 49,908 36,491 17,689 60, Unassigned Total fund balances (deficits) 2,207 49,908 36,491 17,689 60, Total liabilities and fund balances $ 2,207 $ 50,694 $ 40,600 $ 446,228 $ 71,085 $ 5,892

65 Special Revenue Funds East Hendry East Hendry West Hendry East Hendry West Hendry County County County County County Airport Drainage Fire Fire Mid-County Recreational Recreational Sears District District District MSBU MSBU MSBU MSBU $ 132,635 $ 45,572 $ 408,297 $ 297,295 $ 1,132 $ 556,184 $ 907, ,429 3,583 2, , $ 132,676 $ 47,001 $ 411,880 $ 299,756 $ 1,315 $ 574,989 $ 908,714 $ 7,234 $ 272,820 $ 122,792 $ 9,107 $ 194,313 $ 21,602 $ 6,651-8,085 1,222-1,226 8, , , ,014 9, ,539 30,074 6, , , , , ,063 - (233,904) - - (194,224) ,442 (233,904) 287, ,649 (194,224) 544, ,063 $ 132,676 $ 47,001 $ 411,880 $ 299,756 $ 1,315 $ 574,989 $ 908,714 I-50

66 COMBINING BALANCE SHEET (CONTINUED) NONMAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds North Four Wheeler Hooker's Felda Labelle Corners Road Point Mosquito MSBU MSBU MSBU MSBU Lighting Control ASSETS Cash and cash equivalents $ 408,912 $ 468,944 $ 506,396 $ 162,513 $ 16,803 $ 868,328 Prepaid expenses Receivables (net) 27,903 1,134 20, ,768 Total assets $ 436,815 $ 470,078 $ 527,348 $ 162,821 $ 16,803 $ 871,096 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 2,956 $ 3,750 $ 2,849 $ 3,903 $ 1,306 $ 100,191 Accrued liabilities Deferred revenue Other liabilities ,506 Total liabilities 2,956 3,750 2,849 3,903 1, ,697 Fund balances Assigned 433, , , ,918 15, ,399 Unassigned Total fund balances (deficits) 433, , , ,918 15, ,399 Total liabilities and fund balances $ 436,815 $ 470,078 $ 527,348 $ 162,821 $ 16,803 $ 871,096

67 Special Revenue Funds Clerk of Sheriff's Phillips Circuit Court's Sheriff's Sheriff's Equitable Road Sky Valley Building Property Modernization Gun Range Training Sharing MSBU MSBU Projects Appraiser Trust Fund Fund Fund Program Fund $ 3,646 $ 327,014 $ 31,968 $ 66,566 $ 272,764 $ 12,856 $ 2,195 $ , ,844 5, $ 3,646 $ 327,234 $ 73,812 $ 66,566 $ 280,145 $ 12,856 $ 2,195 $ 776 $ - $ 902 $ 3,146 $ - $ 14,742 $ - $ - $ , ,146-14, , ,332-66, ,403 12,856 2, , , ,332 68,666 66, ,403 12,856 2,195 $ 776 $ 3,646 $ 327,234 $ 73,812 $ 66,566 $ 280,145 $ 12,856 $ 2,195 $ 776 I-51

68 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Supervisor of Impact Impact Elections Airglades LaBelle Fees Fees Federal Election Fines and Airport Airport Zone Zone Activities Fund forfeitures Fund Fund One Two ASSETS Cash and cash equivalents $ 5,081 $ 401,282 $ 236,111 $ 921 $ - $ - Prepaid expenses Receivables (net) - 272, , , Total assets $ 5,081 $ 674,215 $ 421,161 $ 255,043 $ - $ - LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ 66,913 $ 183,508 $ 112,323 $ - $ - Accrued liabilities - 11, , Deferred revenue 5, Other liabilities - 1,500 35,467 29, Total liabilities 5,077 80, , , Fund balances Assigned 4 593, , , Unassigned Total fund balances (deficits) $ 4 593, , , Total liabilities and fund balances $ 5,081 $ 674,215 $ 421,161 $ 255,043 $ - $ -

69 Special Revenue Funds Impact Impact Impact Impact Impact Impact Fees Fees Fees Impact Impact Impact Impact Fees Fees Fees Fees Zone Zone Zone Fees Fees Fees Law Felda Pioneer Public Three Four Five School Board Admin West Park Enforcement Fire Fire/EMS Buildings $ - $ - $ 46,328 $ - $ - $ - $ 581 $ 777 $ 773 $ 1, $ - $ - $ 46,328 $ - $ - $ - $ 581 $ 777 $ 773 $ 1,415 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ , , , ,415 $ - $ - $ 46,328 $ - $ - $ - $ 581 $ 777 $ 773 $ 1,415 I-52

70 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Total Impact Seven K Non-Major Fees Estates Capital Governmental Library MSBU Projects Funds ASSETS Cash and cash equivalents $ 149 $ 2,172 $ 808,349 $ 7,596,631 Prepaid expenses ,000 Receivables (net) ,883 1,388,524 Total assets $ 149 $ 2,172 $ 1,334,232 $ 8,987,155 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ - $ - $ 1,152,017 Accrued liabilities ,967 Deferred revenue ,077 Other liabilities ,246 Total liabilities ,690,307 Fund balances Assigned 149 2,172 1,334,232 7,656,310 Unassigned (359,462) Total fund balances (deficits) 149 2,172 1,334,232 7,296,848 Total liabilities and fund balances $ 149 $ 2,172 $ 1,334,232 $ 8,987,155 I-53

71 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Law Court Local Enforcement Section 8 Technology Affordable Emergency Trust Housing Fund Housing 911 REVENUES Intergovernmental $ - $ 229,923 $ - $ 362,479 $ 101,936 Taxes Charges for services - 1,085 38, ,463 Fines and forfeitures 5, Miscellaneous (250) Total revenues 5, ,008 38, , ,149 EXPENDITURES Current General government , Court related Public safety 13, ,670 Physical environment Transportation Economic environment - 231, ,480 - Culture and recreation Human Services Capital outlay General government Physical environment Debt service Principal retirement Interest and fiscal charges Total expenditures 13, ,038 49, , ,670 Excess (deficiencies) of revenues over (under) expenditures (8,597) (30) (11,606) ,479 OTHER FINANCING SOURCES (USES) Transfers in ,000 Transfers out - - (93,543) - - Total other financing sources (uses) - - (93,543) - 100,000 Net change in fund balances (8,597) (30) (105,149) ,479 Fund balances - beginning 10,804 49, ,640 16,949 (69,259) Fund balances - ending $ 2,207 $ 49,908 $ 36,491 $ 17,689 $ 60,220

72 Special Revenue Funds Port Labelle East Hendry East Hendry West Hendry East Hendry West Hendry Street County County County County County Airport Lighting Drainage Fire Fire Mid-County Recreational Recreational Sears District District District District MSBU MSBU MSBU MSBU $ - $ - $ - $ - - $ - $ - $ 3,615 41,999 46, , ,989 $ 287, , ,299 96, , ,866 (684) 1,609 4, ,718 41,999 46, , , , , , , , , ,051 34, , , , , , , , , ,051 34, , , , , ,199 47,720 (9,052) 12,128 (26,454) 81,622 (160,778) 29,599 2,833 54, (9,052) 12,128 (26,454) 81,622 (160,778) 29,599 2,833 54,602 9, ,314 (207,450) 206, ,427 (223,823) 542, ,461 $ 77 $ 125,442 $ (233,904) $ 287,866 $ 290,649 $ (194,224) $ 544,915 $ 902,063 I-54

73 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds North Four Wheeler Hooker's Felda Labelle Corners Road Point Mosquito MSBU MSBU MSBU MSBU Lighting Control REVENUES Intergovernmental $ 39,818 $ - $ 68,715 $ - $ - $ 18,500 Taxes 23,080 50,110 17,177 96,126 11, ,591 Charges for services Fines and forfeitures Miscellaneous , ,955 Total revenues 63,282 50,677 87,317 96,413 11, ,046 EXPENDITURES Current General government Court related Public safety Physical environment 15,502 37,184 15,463 19,567 10, ,420 Transportation - - Economic environment Culture and recreation Human Services Capital outlay General government 39, ,429 - Physical environment Debt service Principal retirement , Interest and fiscal charges , Total expenditures 55,320 37, ,892 67,999 10, ,420 Excess (deficiencies) of revenues over (under) expenditures 7,962 13,493 (65,575) 28, (145,374) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 7,962 13,493 (65,575) 28, (145,374) Fund balances - beginning 425, , , ,504 14, ,773 Fund balances - ending $ 433,859 $ 466,328 $ 524,499 $ 158,918 $ 15,497 $ 767,399

74 Special Revenue Funds Clerk of Sheriff's Phillips Sky Circuit Court's Sheriff's Sheriff's Equitable Road Valley Building Property Modernization Gun Range Training Sharing MSBU MSBU Projects Appraiser Trust Fund Fund Fund Program Fund $ - $ - $ 25,000 $ 98,252 $ 112,682 $ - $ - $ , , , , ,162 85,085 98, ,682 7,339 5, , , ,325 5,126 4,828 9, , , , ,386 45, , ,325 5,126 4,828 9, ,776 39,490 (21,383) (54,643) 2,213 1,134 (8,958) (25,000) (25,000) ,776 14,490 (21,383) (54,643) 2,213 1,134 (8,958) 3, ,556 54,176 87, ,046 10,643 1,061 9,734 $ 3,646 $ 326,332 $ 68,666 $ 66,566 $ 265,403 $ 12,856 $ 2,195 $ 776 I-55

75 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Supervisor of Impact Elections LaBelle Airglades Fees Federal Election Fines and Airport Airport Zone Activities Fund Forfeitures Fund Fund One REVENUES Intergovernmental $ - $ 157,204 $ 550,455 $ 969,743 $ - Taxes Charges for services - 389, ,106 1,011,219 - Fines and forfeitures - 303, Miscellaneous 4 140,918 30, , Total revenues 4 990,665 1,132,701 2,299, EXPENDITURES Current General government Court related - 198, Public safety - 377, Physical environment Transportation ,782 1,184,407 - Economic environment Culture and recreation Human Services - 33, Capital outlay General government ,396,141 - Physical environment ,018-7,603 Debt service Principal retirement , Interest and fiscal charges - - 8, Total expenditures - 609,867 1,122,839 2,580,548 7,603 Excess (deficiencies) of revenues over (under) expenditures 4 380,798 9,862 (281,317) (7,578) OTHER FINANCING SOURCES (USES) Transfers in - 52, Transfers out - (83,627) Total other financing sources (uses) - (30,834) Net change in fund balances 4 349,964 9,862 (281,317) (7,578) Fund balances - beginning - 243, , ,135 7,578 Fund balances - ending $ 4 $ 593,925 $ 112,335 $ 201,818 $ -

76 Special Revenue Funds Impact Impact Impact Impact Impact Fees Fees Fees Impact Impact Impact Impact Fees Fees Zone Zone Law Fees Fees Fee Fees Pioneer Public Four Five Enforcement School Board Admin West Park Felda Fire Fire/EMS Buildings $ - $ - $ - $ - $ - $ - $ - $ - $ , , (41,108) (41,108) ,108 46, ,412 $ - $ 46,328 $ 581 $ - $ - $ - $ 777 $ 773 $ 1,415 I-56

77 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Total Impact Seven K Non-Major Fees Estates Capital Governmental Library MSBU Projects Funds REVENUES Intergovernmental $ - $ - $ 512,493 $ 3,250,815 Taxes - - 2,126,366 5,116,249 Charges for services ,145,901 Fines and forfeitures ,202 Miscellaneous - 2, ,619 1,037,933 Total revenues - 2,320 3,064,478 11,859,100 EXPENDITURES Current General government , ,839 Court related ,610 Public safety ,658,116 Physical environment ,705 Transportation ,853,070 Economic environment ,518 Culture and recreation ,412 Human Services ,947 Capital outlay General government ,780 1,848,849 Physical environment ,512 Debt service Principal retirement ,424 Interest and fiscal charges ,047 Total expenditures ,918 9,456,049 - Excess (deficiencies) of revenues over - (under) expenditures - 2,172 2,545,560 (144,681) OTHER FINANCING SOURCES (USES) Transfers in ,793 Transfers out - - (2,255,537) (2,457,707) Total other financing sources (uses) - - (2,255,537) (2,304,914) Net change in fund balances - 2, ,023 98,137 Fund balances - beginning 149-1,044,209 7,198,711 Fund balances - ending $ 149 $ 2,172 $ 1,334,232 $ 7,296,848 I-57

78 COMBINING SCHEDULE - BALANCE SHEET FIDUCIARY FUNDS As of September 30, 2013 Clerk of Tax Circuit Court Sheriff Collector Total ASSETS Cash and cash equivalents $ 892,818 $ 331,991 $ 555,004 $ 1,779,813 Receivables (net) 1, ,194 Total assets $ 894,012 $ 331,991 $ 555,004 $ 1,781,007 LIABILITIES Accounts payable 273,368 - $ - 273,368 Due to other constitutional officers $ - $ - 42,410 42,410 Due to other governments 608,720 1, ,361 Due to individuals 11, ,456 41, ,052 Due to other funds - - 1,021 1,021 Deposits , ,795 Total liabilities $ 894,012 $ 331,991 $ 555,004 $ 1,781,007 I-58

79 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS For the Year Ended September 30, 2013 Beginning Ending Balance Additions Deletions Balance Clerk of Circuit Court ASSETS Cash and cash equivalents $ 803,470 $ 7,857,941 $ 7,768,593 $ 892,818 Accounts Receivable 2,521 17,836 19,163 1,194 Total assets $ 805,991 $ 7,875,777 $ 7,787,756 $ 894,012 LIABILITIES Accounts payable $ 276,518 $ 2,704,922 $ 2,708,072 $ 273,368 Due to other governments 520,054 1,437,381 1,348, ,720 Due to individuals 9,419 12,848 10,343 11,924 Total liabilities $ 805,991 $ 4,155,151 $ 4,067,130 $ 894,012 Sheriff ASSETS Cash and cash equivalents $ 283,408 $ 711,823 $ 663,240 $ 331,991 Total assets $ 283,408 $ 711,823 $ 663,240 $ 331,991 LIABILITIES Due to other governments $ 1,008 $ 4,746 $ 4,219 $ 1,535 Due to individuals 282, , , ,456 Total liabilities $ 283,408 $ 711,823 $ 663,240 $ 331,991 Tax Collector ASSETS Cash and cash equivalents $ 465,995 $ 60,939,241 $ 60,850,232 $ 555,004 Total assets $ 465,995 $ 60,939,241 $ 60,850,232 $ 555,004 LIABILITIES Due to other constitutional officers $ 22,767 $ 7,267,399 $ 7,247,756 $ 42,410 Due to other governments 546 5,148,322 5,148, Due to individuals 15,746 2,008,615 1,982,689 41,672 Due to other funds - 6,693 5,672 1,021 Deposits 426,936 48,597,862 48,555, ,795 Total liabilities $ 465,995 $ 63,028,891 $ 62,939,882 $ 555,004

80 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (CONTINUED) FIDUCIARY FUNDS For the Year Ended September 30, 2013 Beginning Ending Balance Additions Deletions Balance TOTAL ASSETS Cash and cash equivalents $ 1,552,873 $ 69,509,005 $ 69,282,065 $ 1,779,813 Receivables (net) 2,521 17,836 19,163 1,194 Total assets $ 1,555,394 $ 69,526,841 $ 69,301,228 $ 1,781,007 LIABILITIES Accounts payable $ 276,518 $ 2,704,922 $ 2,708,072 $ 273,368 Due to other constitutional officers 22,767 7,267,399 7,247,756 42,410 Due to other governments 521,608 6,590,449 6,501, ,361 Due to individuals 307,565 2,728,540 2,652, ,052 Due to other funds - 6,693 5,672 1,021 Deposits 426,936 48,597,862 48,555, ,795 Total liabilities $ 1,555,394 $ 67,895,865 $ 67,670,252 $ 1,781,007 I-59

81 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's 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 Board of County Commissioners of Hendry County, Florida: We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of Hendry County, Florida, (the "County") as of and for the fiscal year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated June 20, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) 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 County s internal control. Accordingly, we do not express an opinion on the effectiveness of the County s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity'sbasic 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. I-60

82

83 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Management Letter To the Honorable Board of County Commissioners of Hendry County, Florida: We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of Hendry County, Florida (the "County"), as of and for the fiscal year ended September 30, 2013, which collectively comprise the County's basic financial statements and have issued our report thereon dated June 20, 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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations ; and Chapter , Rules of the Florida Auditor General. 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 Financial Statements Performed in Accordance with Government Auditing Standards, Independent Auditor's Report on Compliance for Each Major Federal Awards Program and State Financial Assistance Project and on Internal Control Over Compliance Required by OMB Circular A-133 and Chapter , Rules of the Florida Auditor General and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are dated June 20, 2014, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter , Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor s reports or schedule: 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 recommendations made in the preceding annual financial audit report. I-62

84

85 BOARD OF COUNTY COMMISSIONERS September 30, 2013 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

86 TABLE OF CONTENTS REPORT OF INDEPENDENT AUDITORS BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Position Statement of Activities FUND FINANCIAL STATEMENTS Balance Sheet Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenses and Changes in Fund Balance Budget and Actual General Fund Statement of Revenues, Expenses and Changes in Fund Balance Budget and Actual County Transportation Trust Statement of Revenues, Expenses and Changes in Fund Balance Budget and Actual Solid Waste Disposal Fund Statement of Net Position Proprietary Fund Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Fund Statement of Cash Flows Proprietary Fund NOTES TO FINANCIAL STATEMENTS II-1 II-3 II-4 II-5 II-6 II-7 II-8 II-9 II-10 II-11 II-12 II-13 II-14 II-15 II-16 II-34 REQUIRED SUPPLEMENTARY INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS Combining Balance Sheet Non-major Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-major Governmental Funds 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 MANAGEMENT LETTER RESPONSE TO MANAGEMENT LETTER II-35 II-38 II-39 II-41 II-42 II-43 II-44 II-45 II 46

87 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report To the Honorable Board of County Commissioners of Hendry County, Florida Report on the Financial Statements We have audited the accompanying special-purpose financial statements of the each major fund and aggregate remaining fund information of the Board of County Commissioners, Hendry County, Florida (the "Board") as of and for the fiscal year ended September 30, 2013, 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 special-purpose 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. Auditor's Responsibility Our responsibility is to express opinions on these special-purpose 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 from 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. II-1

88 Auditor's Responsibility, continued 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. As discussed in Note 1, the accompanying special-purpose financial statements were prepared for the purpose of complying with Section (2), Florida Statutes, and Chapter , Rules of the Auditor General - Local Governmental Entity Audits, and are not intended to be a complete presentation of the financial position and changes in financial position of the Board. Additionally, the special-purpose financial statements present only the Board and are not intended to present the financial position and changes in financial position of Hendry County, Florida taken as a whole. Opinions In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business type activities, each major fund and the aggregate remaining fund information in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information be presented to supplement the special-purpose financial statements. Such information, although not a part of the special-purpose financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the special-purpose financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, 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 special-purpose financial statements, and other knowledge we obtained during our audit of the special-purpose financial statements. We do 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 20, 2014, on our consideration of the Board's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. II-2

89

90 BOARD OF COUNTY COMMISSIONERS STATEMENT OF NET POSITION September 30, 2013 Primary Government Component Units Governmental Business-type Activities Activities Total ASSETS Cash and cash equivalents $ 9,631,395 $ 832,851 $ 10,464,246 $ 9,826 Investments, at fair value 5,188,362-5,188,362 - Receivables, net 12,297,321 4,007,538 16,304,859 - Due from other governments - 34,700 34,700 - Inventory - 5,433 5,433 - Restricted assets: Investments, at fair value - 2,823,970 2,823,970 - Capital assets: Non-depreciable 6,612, ,006 7,149,396 - Depreciable, net 48,578,741 23,106,755 71,685,496 - Total assets 82,308,209 31,348, ,656,462 9,826 LIABILITIES Accounts payable 9,327,808 1,100,366 10,428,174 - Accrued liabilities 173,829 45, ,711 - Deferred revenue Deposits 575, ,876 - Liabilities payable from restricted assets: Current portion of long-term debt 296, , ,524 - Customer deposits - 170, ,296 - Noncurrent liabilities: Due in more than one year 1,774,110 9,411,188 11,185,298 - Total liabilities 12,147,798 11,000,081 23,147,879 - NET POSITION Invested in capital assets, net of related debt 54,213,933 13,985,525 68,199,458 - Restricted for: Capital projects 1,334,232-1,334,232 - Unrestricted 14,612,246 6,362,647 20,974,893 9,826 Total net position $ 70,160,411 $ 20,348,172 $ 90,508,583 $ 9,826 The accompanying notes to the financial statements are an integral part of this statement. II-4

91 BOARD OF COUNTY COMMISSIONERS STATEMENT OF ACTIVITIES September 30, 2013 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities : General government $ 7,985,378 $ 1,015,164 $ 289,909 $ 452,386 Court related 229, , Public safety 6,115,872 1,131, ,448 - Physical environment 3,285, , ,950 - Transportation 7,547,008 1,975,175 70,074 4,188,974 Economic environment 1,038,584 1, ,923 - Culture and recreation 807,152 7, ,064 - Human services 2,109, ,662 42, ,724 Interest on long-term debt 31, Total governmental activities 29,149,839 4,902,610 1,270,851 4,992,084 Business-type activities : Water and Wastewater 2,309,532 1,325, Total business-type activities 2,309,532 1,325, Total primary government $ 31,459,371 $ 6,228,593 $ 1,270,851 $ 4,992,084 General revenues : Property taxes Gasoline taxes Communications taxes Other taxes Intergovernmental revenues Interest income Miscellaneous Transfers Total general revenues and transfers Change in net position Net position, beginning Net position, ending The accompanying notes to the financial statements are an integral part of this statement.

92 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (6,227,919) $ - $ (6,227,919) $ - 182, ,755 - (4,691,486) - (4,691,486) - (2,884,048) - (2,884,048) - (1,312,785) - (1,312,785) - (807,576) - (807,576) - (643,177) - (643,177) - (1,568,602) - (1,568,602) - (31,454) - (31,454) - (17,984,294) - (17,984,294) - - (983,549) (983,549) - - (983,549) (983,549) - (17,984,294) (983,549) (18,967,843) - 12,670,000-12,670,000-1,092,537-1,092, , ,772-6,025,306-6,025,306-7,028,825-7,028,825-17,616 2,878 20, ,686,596 67,989 1,754,585 - (11,432,399) - (11,432,399) - 17,246,253 70,867 17,317, (738,041) (912,682) (1,650,723) 15 70,898,452 21,260,854 92,159,306 9,811 $ 70,160,411 $ 20,348,172 $ 90,508,583 $ 9,826 II-5

93 BOARD OF COUNTY COMMISSIONERS BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2013 County Solid Other Total Transportation Waste Governmental Governmental General Trust Disposal Funds Funds ASSETS Cash and cash equivalents $ 804,900 $ 1,213,292 $ 376,810 $ 7,236,393 $ 9,631,395 Investments 5,188, ,188,362 Receivables (net) 3,347,282 2,312,545 5,254,351 1,383,143 12,297,321 Total assets $ 9,340,544 $ 3,525,837 $ 5,631,161 $ 8,619,536 $ 27,117,078 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 7,493,828 $ 437,665 $ 259,040 $ 1,137,275 $ 9,327,808 Accrued liabilities 93,449 43,484 3,929 32, ,829 Other liabilities 75, , ,876 Total liabilities 7,662, , ,969 1,670,488 10,077,513 ` Fund balances Committed 5,000, ,000,000 Assigned - 3,044,688 5,368,192 7,308,510 15,721,390 Unassigned (3,322,363) - - (359,462) (3,681,825) Total fund balances 1,677,637 3,044,688 5,368,192 6,949,048 17,039,565 Total liabilities and fund balances $ 9,340,544 $ 3,525,837 $ 5,631,161 $ 8,619,536 $ 27,117,078 The accompanying notes to the financial statements are an integral part of this statement. II-6

94 BOARD OF COUNTY COMMISSIONERS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION September 30, 2013 Fund Balances - total governmental funds $ 17,039,565 Capital assets used in governmental activities are not financial resources and are therefore not reported in the governmental funds: Non-depreciable governmental capital assets $ 6,612,390 Depreciable governmental capital assets, net 48,578,741 55,191,131 Long-term liabilities including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds: Notes payable (977,198) Landfill closure (165,020) Other Post Employment Benefits (428,864) Compensated absences payable (499,203) (2,070,285) Net position of governmental activities $ 70,160,411 The accompanying notes to the financial statements are an integral part of this statement. II-7

95 BOARD OF COUNTY COMMISSIONERS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 County Solid Transportation Waste General Trust Disposal REVENUES Taxes $ 12,827,773 $ 1,092,537 $ 909,059 Licenses and permits 248, Intergovernmental 4,993,848 5,211,951 70,588 Charges for services 1,832, , ,609 Fines and forfeitures Miscellaneous 318,730 15,762 88,949 Total revenues 20,222,116 6,732,395 1,280,205 EXPENDITURES Current General government 6,294, Court related Public safety 3,801, Physical environment 413,649-1,773,134 Transportation - 5,290,799 Economic environment 355, Culture and recreation 30, Human services 889, Capital outlay General government 36, Transportation 9, ,421 - Debt service Principal retirement 79, Interest and fiscal charges 11, Total expenditures 11,921,562 6,174,220 1,773,134 Excess (deficiencies) of revenues over (under) expenditures 8,300, ,175 (492,929) OTHER FINANCING SOURCES (USES) Transfers in 2,440, Transfers out (11,532,399) - (36,000) Total other financing sources (uses) (9,091,485) - (36,000) Net change in fund balances (790,931) 558,175 (528,929) Fund balances - beginning 2,468,568 2,486,513 5,897,121 Fund balances - ending $ 1,677,637 $ 3,044,688 $ 5,368,192 The accompanying notes to the financial statements are an integral part of this statement.

96 Other Governmental Funds Total Governmental Funds $ 5,116,249 $ 19,945, ,183 3,039,881 13,316,268 2,138,072 4,594, , ,202 1,031,588 1,455,029 11,633,992 39,868, ,098 6,852, , ,610 1,658,116 5,459, ,705 3,076,488 1,853,070 7,143, , , , ,492 33, ,803 2,547,361 2,583, ,921 95, ,660 20,047 31,454 9,149,308 29,018,224 2,484,684 10,850, ,793 2,593,707 (2,457,707) (14,026,106) (2,304,914) (11,432,399) 179,770 (581,915) 6,769,278 17,621,480 $ 6,949,048 $ 17,039,565 II-8

97 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS For the Year ended September 30, 2013 Net change in fund balances - total governmental funds: $ (581,915) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation or amortization expense. This is the amount by which depreciation, amortization and capital asset adjustments were above capital outlays in the current period. (123,025) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal payments $ 174,660 Landfill Closure 78,372 Other Post Employment Benefits (86,756) 166,276 Certain expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in compensated absences (199,377) Change in net position of governmental activities $ (738,041) The accompanying notes to the financial statements are an integral part of this statement. II-9

98 BOARD OF COUNTY COMMISSIONERS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2013 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget - REVENUES Taxes $ 13,311,254 $ 13,311,254 $ 12,827,773 $ (483,481) Licenses and permits 250, , ,888 (1,112) Intergovernmental 4,764,671 4,801,076 4,993, ,772 Charges for services 1,776,500 1,799,500 1,832,877 33,377 Miscellaneous 360, , ,730 (58,624) Total revenues 20,462,775 20,539,184 20,222,116 (317,068) EXPENDITURES Current General government 5,183,716 6,364,614 6,294,499 70,115 Public safety 3,451,088 3,526,993 3,801,063 (274,070) Physical environment 437, , ,649 19,949 Economic environment 399, , ,655 60,350 Culture and recreation 36,727 36,727 30,080 6,647 Human services 961, , ,856 71,533 Capital outlay General government 95,800 69,800 36,617 33,183 Transportation - - 9,500 (9,500) Debt service Principal retirement 35,953 74,024 79,236 (5,212) Interest and fiscal charges 4,047 10,917 11,407 (490) Total expenditures 10,605,563 11,894,067 11,921,562 (27,495) Excess of revenues over expenditures 9,857,212 8,645,117 8,300,554 (344,563) OTHER FINANCING SOURCES (USES) Transfers in 3,608,158 3,653,099 2,440,914 (1,212,185) Transfers out (13,135,903) (11,810,670) (11,532,399) 278,271 Total other financing sources (uses) (9,527,745) (8,157,571) (9,091,485) (933,914) Net change in fund balance 329, ,546 (790,931) (1,278,477) Fund balance - beginning (329,467) (487,546) 2,468,568 2,956,114 Fund balance - ending $ - $ - $ 1,677,637 $ 1,677,637 The accompanying notes to the financial statements are an integral part of this statement. II-10

99 BOARD OF COUNTY COMMISSIONERS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL COUNTY TRANSPORTATION TRUST For the Year Ended September 30, 2013 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget - REVENUES Taxes $ 1,084,108 $ 1,084,108 $ 1,092,537 $ 8,429 Intergovernmental 6,613,008 6,613,008 5,211,951 (1,401,057) Charges for services 360, , ,145 52,145 Miscellaneous 37,500 37,500 15,762 (21,738) Total revenues 8,094,616 8,094,616 6,732,395 (1,362,221) EXPENDITURES Current Transportation 8,396,354 8,396,354 5,290,799 3,105,555 Capital outlay Transportation 1,474,325 1,433, , ,617 Total expenditures 9,870,679 9,829,392 6,174,220 3,655,172 Excess (deficiencies) of revenues over (under) expenditures (1,776,063) (1,734,776) 558,175 2,292,951 OTHER FINANCING SOURCES Transfers in 25,489 25,489 - (25,489) Total other financing sources 25,489 25,489 - (25,489) Net change in fund balance (1,750,574) (1,709,287) 558,175 2,267,462 Fund balance - beginning 1,750,574 1,709,287 2,486, ,226 Fund balance - ending $ - $ - $ 3,044,688 $ 3,044,688 The accompanying notes to the financial statements are an integral part of this statement. II-11

100 BOARD OF COUNTY COMMISSIONERS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SOLID WASTE DISPOSAL For the Year Ended September 30, 2013 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget - REVENUES Taxes $ 921,069 $ 921,069 $ 909,059 $ (12,010) Intergovernmental 70,588 70,588 70,588 - Charges for services 223, , ,609 (11,459) Miscellaneous 81,579 81,579 88,949 7,370 Total revenues 1,296,304 1,296,304 1,280,205 (16,099) EXPENDITURES Current Physical environment 1,881,552 1,881,552 1,809,134 72,418 Capital outlay Physical environment 877, , ,500 Total expenditures 2,759,052 2,759,052 1,809, ,918 Net change in fund balance (1,462,748) (1,462,748) (528,929) 933,819 Fund balance - beginning 1,462,748 1,462,748 5,897,121 4,434,373 Fund balance - ending $ - $ - $ 5,368,192 $ 5,368,192 The accompanying notes to the financial statements are an integral part of this statement. II-12

101 BOARD OF COUNTY COMMISSIONERS STATEMENT OF NET POSITION PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System ASSETS Current Assets Cash and cash equivalents $ 832,851 Receivables (net) 4,007,538 Due from other governments 34,700 Inventory 5,433 Restricted Assets: Investments at fair value 2,823,970 Total current assets 7,704,492 Noncurrent Assets Capital Assets Non-depreciable 537,006 Depreciable 29,197,140 Less: accumulated depreciation (6,090,385) Total noncurrent assets 23,643,761 Total assets 31,348,253 The accompanying notes to the financial statements are an integral part of this statement.

102 BOARD OF COUNTY COMMISSIONERS STATEMENT OF NET POSITION - Continued PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System LIABILITIES Current liabilities Accounts payable 1,100,366 Accrued liabilities 45,882 Total current liabilities 1,146,248 Current liabilities payable from restricted assets Notes payable 126,949 Bonds payable 145,400 Customer deposits 170,296 Total current liabilities payable from restricted assets 442,645 Noncurrent liabilities Accrued compensated absences 25,301 Notes payable 2,429,887 Bonds payable 6,956,000 Total noncurrent liabilities 9,411,188 Total liabilities 11,000,081 NET POSITION Invested in capital assets, net of related debt 13,985,525 Unrestricted 6,362,647 Total net position $ 20,348,172 II-13

103 BOARD OF COUNTY COMMISSIONERS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUND For the Year Ended September 30, 2013 Business-type Activities Enterprise Fund Port Labelle Utility System OPERATING REVENUES Charges for services $ 1,325,983 Miscellaneous 67,989 Total operating revenues 1,393,972 OPERATING EXPENSES Personal services 350,200 Contractual services 78,717 Repairs and maintenance 63,358 Depreciation and amortization 972,746 Office 14,383 Supplies 48,631 Utilities 85,569 Other expense 168,000 Total operating expenses 1,781,604 Operating income (387,632) NON-OPERATING REVENUES (EXPENSES) Interest and fiscal charges (527,928) Interest revenue 2,878 Total non-operating (expenses) (525,050) Change in net position (912,682) Total net position - beginning 21,260,854 Total net position - ending $ 20,348,172 The accompanying notes to the financial statements are an integral part of this statement. II-14

104 BOARD OF COUNTY COMMISSIONERS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended September 30, 2013 Business-type Activities Enterprise Funds Port LaBelle Utility System CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 1,665,396 Cash payments to suppliers for goods and services (432,590) Cash payments to employees for services (343,938) Net cash provided by operating activities 888,868 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Deposits collected from customers less deposits refunded to customers 6,282 Net cash provided by noncapital financing activities 6,282 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on notes payable and revenue bonds (260,837) Interest paid notes payable and revenue bonds (527,928) Net cash used in capital financing activities (788,765) CASH FLOWS FROM INVESTING ACTIVITIES: Interest on investments 2,878 Net cash provided by investing activities 2,878 Net increase in cash and cash equivalents 109,263 Cash and cash equivalents at beginning of year 723,588 Cash and cash equivalents at end of year $ 832,851 The accompanying notes to the financial statements are an integral part of this statement.

105 BOARD OF COUNTY COMMISSIONERS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS (Continued) For the Fiscal Year Ended September 30, 2013 Business-type Activities Enterprise Funds Port LaBelle Utility System Reconciliation of operating income to net cash provided by operating activities: Operating income $ (387,632) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 972,746 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 306,124 Due from other governments (34,700) Increase (decrease) in: Accounts payable 26,068 Accrued liabilities 6,262 Total adjustments 1,276,500 Net cash provided by operating activities $ 888,868 II-15

106 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Hendry County (the County ) was created in 1923 by the Laws of Florida 1923, Chapter as amended, Section 7.26, Florida Statutes and is a political subdivision of the State of Florida. It is governed by an elected Board of County Commissioners (the Board ) which is a body of elected Constitutional Officers of Hendry County. Based on the criteria set forth by the Governmental Accounting Standards Board, the Board is a part of the County s primary government and its financial statements are included in the basic financial statements of Hendry County, Florida. However, Chapter 11.45, of the Florida Statutes defines the Board as a County agency. For the purposes of that section, County agencies are treated as local governmental agencies. Section , Rules of the Auditor General for Local Governmental Entity Audits, requires a separate financial audit report for each County agency. The accounts of the Board do not constitute a complete presentation of the County, but present only the financial position and results of operations of the Board. The accompanying financial statements present the combined financial position and results of operations of the County, by major fund, and non-major funds in aggregate, that are governed by the Board. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of Hendry County (the primary government) and its component units. A component unit is a legally separate organization for which the elected officials of the primary government are financially accountable. In addition, a component unit may be another organization for which the nature and significance of its relationship with a primary government is such that exclusion would cause the reporting entity s financial statements to be misleading or incomplete. In conformity with accounting principles generally accepted in the United States of America, the financial statements of the component units have been included in the financial reporting entity as a discretely presented component unit. Discretely Presented Component Unit Hendry County Industrial Development Authority is a predominantly dormant organization which convenes on an as needed basis. By Resolution 83-43, dated March 8, 1983, the Board appoints the members of the Authority and provides the funding for the Authority s operations when the Authority s approval is necessary to issue Industrial Revenue Bonds for development in the County. Hendry County Economic Development Council, Inc. (the Council) was incorporated on August 29, 1997 with operations beginning October 1, 1997 as a Florida not-for-profit corporation. The Council s purpose is to promote, develop, stimulate, and coordinate the economic development activities of governments, businesses, and educational institutions in Hendry County. The Council s mission is also to address issues affecting the economic development in Hendry County, as well as, to heighten community awareness of the related economic effect concerning these issues. II-16

107 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Discretely Presented Component Unit (Continued) The Council acts as an advocate for the promotion of the professions and skills necessary to sustain and expand economic growth by promoting, encouraging and coordinating education and vocational training in Hendry County. Complete financial information of the individual component units can be obtained directly from the Authority or the Council. Government-Wide and Fund Financial Statements The government-wide financial statements and the major-fund financial statements along with the notes to the financial statements comprise the basic financial statements. The government-wide financial statements (the statement of net position and the statement of activities) report on the Board as a whole and do not emphasize fund types but rather a governmental or a business-type classification, which are presented in separate columns. These statements report on the Board as a whole, both the primary government and its component units, and provide a consolidated financial picture of the Board of County Commissioners. As part of the consolidation process, inter-fund activities are eliminated to avoid distorted financial results. The Statement of Net Position reports all financial and capital resources of the Board s governmental and business-type activities. It is presented in a net position format (assets less liabilities equal net position) and shown with three components: amounts invested in capital assets, net of related debt; restricted net position; and unrestricted net position. The statement of activities reflects the expenses of a given function or segment, which are offset by program revenues. Program revenues are defined as charges for services, operating grants and contributions, and capital grants and contributions directly associated with a given function. Taxes are reported under general revenue. Program revenues are classified into three categories; charges for services, operating grants and contributions, and capital grants and contributions. Charges refer to direct recovery from customers for services rendered. Grants and contributions refer to revenues restricted for specific programs whose use may be restricted further to operational or capital items. The general revenues section displays revenue collected that helps support all functions of our government and contribute to the change in the net position for the fiscal year. The Board s major funds are presented in separate columns on the governmental fund financial statements and the proprietary fund financial statements. The definition of a major fund is one that meets certain criteria setforth in GASB 34. The funds that do not meet the criteria of a major fund are considered non-major funds and are combined into a single column on the fund financial statements. II-17

108 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The accounts of the Board are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. Basis of accounting refers to when revenues and expenditures, or expenses, are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The government-wide financial statements are prepared on a full accrual basis using the economic resources measurement focus, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred. Property taxes are recognized in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all of the eligibility requirements have been met. Proprietary funds record both operating and non-operating revenues and expenses. Operating revenues are those that are obtained from the operations of the proprietary fund and include user fees. Non-operating revenues are not related to the operations of the proprietary fund and include interest and other miscellaneous earnings. Operating expenses represent the cost of operations, which includes depreciation. Non-operating expenses are not related to operations such as interest expense. Governmental fund financial statements are prepared on the modified accrual basis using the current financial resources measurement focus. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. The Board considers all revenues available if they are collected within sixty days after year-end. Primary revenues, such as property taxes, special assessments, intergovernmental revenues, charges for services, sales and franchise taxes, rents, and interest are treated as susceptible to accrual under the modified accrual basis and have been recognized as revenues. Expenditures reported in governmental fund financial statements are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule includes principal and interest on general long-term debt, which is recognized when due. The business-type activities reported in the government-wide financial statements and proprietary funds follow private sector standards issued prior to December 1, 1989, to the extent those standards do not conflict with Governmental Accounting Standards Board statements. II-18

109 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) However, pursuant to Government Accounting Standards Board Statement Number 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the Board has elected not to apply accounting standards issued after November 30, 1989, by the Financial Accounting Standards Board. When both restricted and unrestricted resources are available, restricted resources will be used first for incurred expenses, and then unrestricted as needed. The Board reports the following major funds in the governmental fund financial statements: General Fund The General Fund is the general operating fund of the Board that is used to account for all financial resources, except those required to be accounted for in another fund. County Transportation Trust Fund The County Transportation Trust Fund construction and maintenance of roadways. accounts for revenues received and expended for the Solid Waste Disposal Fund The Solid Waste Disposal Fund is used to account for the activities related to the solid waste disposal program. Non-major Governmental Funds The non-major governmental funds are a combination of special revenue, debt service, and capital projects funds. II-19

110 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Budgets and Budgetary Accounting Chapters 129 and 200 of the Florida Statutes govern the preparation, adoption and administration of the Board s annual budget. The budget is required to be balanced; that is; the total of the estimated revenues, including balances brought forward, shall equal the total of the appropriations and reserves. The following procedures are followed by the Board in establishing the operating budget: (1) On or before July 15, a tentative budget for the fiscal year commencing the following October 1 is presented to the Board. (2) The tentative budget is reviewed by the Board and any necessary changes are made. (3) (4) On or before September 30, the budget is legally adopted through passage of a resolution. (5) (6) (7) (8) (9) Public hearings are conducted to inform the taxpayers of the tentative budget and proposed tax levies and to obtain taxpayer comments. Section of the Florida Statutes prohibits incurring expenditures in excess of total fund appropriations. Formal budgetary integration is employed as a management control device during the year in all Governmental Fund Types. Estimated beginning fund balances are considered in the budgetary process, but are not included in the financial statements as budgeted revenue. Budgets for General, Special Revenue, Debt Service and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Formal budgetary integration is employed as a management control device during the year in all Governmental Fund Types. Estimated beginning fund balances are considered in the budgetary process, but are not included in the financial statements as budgeted revenue. Budgets for General, Special Revenue, Debt Service and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The annual budgets serve as the legal authorization for expenditures. Expenditures cannot legally exceed the total amount budgeted for each fund. The Board must approve all budget amendments, which change the legally adopted total appropriation for a fund. If, during the fiscal year, additional revenues become available for appropriation in excess of those estimated in the budget, the Board may make supplemental appropriations by resolution for the year up to the amount of such excess. During the fiscal year the Board, in accordance with Florida Statutes, approved various supplemental appropriations. Appropriations lapse at fiscal year-end. II-20

111 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity Cash and Investments The Board considers cash and cash equivalents to be cash on hand, demand deposits, highly liquid investments, including those held as restricted assets, with original maturities of three months or less when purchased, and those included in the internal investment pool. For accounting and investment purposes, the Board maintains a cash pool that is available for use by all funds except those whose cash and investments may be segregated due to legal or other restrictions. Interest earned on investments in the pool is allocated to the various funds based upon each fund s equity balance in the pool during the allocation period. The Board reports all investments at fair value. Inventories Inventories, consisting primarily of materials and supplies, are stated at cost, which approximates fair market value. The first-in, first-out method of accounting is used to determine cost. All inventories are recorded as expenditures, or expenses, as they are used (consumption method). Capital Assets Capital assets include property, plant, and equipment. Infrastructure assets are defined as public domain fixed assets such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar assets that are immovable and of value only to the government unit. Pursuant to GASB Statement No. 34, the County, a Phase 3 government, has elected to report infrastructure retroactively. Retroactive infrastructure is reported at the estimated historical cost. Capital assets are reported in the government-wide financial statements in the applicable governmental or business-type activities column, as well as the proprietary fund financial statements. The threshold for capitalizing property, plant, and equipment is $5,000. The threshold for capitalizing infrastructure is $100,000. Capital assets are recorded at cost, or estimated historical cost. Contributed assets are recorded at estimated fair market value at the time received. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Florida Statutes require that the Board maintain accountability for all assets used in operations, except those maintained by the Sheriff. II-21

112 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity (Continued) Capital Assets (continued) BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 The ranges of the useful lives are as follows: Asset Years Buildings Infrastructure Improvements other than Buildings 6-50 Equipment 3-35 Computer Equipment 3-10 Furniture 4-20 Vehicles & rolling stock 3-15 New Accounting Standards Beginning with fiscal year 2013, the County implemented GASB Statement No. 63; Financial Reporting of Deferred Outfows of Resources, Deferred inflows of Resources, and Net Position. This statement amends the net asset reporting requirements in Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, and other pronouncements. This statement requres a Statement of Net Position (rather that net assets) format which segregates deferred inflows and deferred outflows from assets and liabilities respectively. Specific items required to be broken out as deferred inflows or deferred outflows are discussed in GASB Statements 53 and 60. These items are Derivative Investments and Service Concession Arrangements respectively. None of these items affect the County at this time. The other portion of GASB Statement 63 is nomenclature. Statement No. 64; Derivative Instuments: Application of Hedge Accounting Termination Provisions is not applicable to Hendry County. Compensated Absences The Board maintains a policy that permits employees to accumulate earned but unused vacation and sick pay benefits that will be paid to employees upon separation from Board service if certain criteria are met. These benefits, plus their related tax and retirement costs are classified as compensated absences. Both the current and long-term portion of compensated absences are accrued and reported in the government-wide and proprietary fund financial statements. This is accounted for pursuant to GASB Statement Number 16, Accounting for Compensated Absences. Net Position / Fund Balance Classification Governmental funds report fund balances as either nonspendable or spendable. Spendable fund balances are further classified as restricted, committed, assigned or unassigned, based on the extent to which there are external or internal constraints on the spending of these fund balances. II-22

113 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assets, Liabilities, and Net Position or Fund Equity (Continued) Net Position / Fund Balance Classification (Continued) Nonspendable fund balances include amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact. The County considers inventories and prepaid items as part of this category, as well as long-term receivables from which proceeds are not restricted, committed, or assigned. Spendable Fund Balances: Restricted Fund Balance: Amounts that are restricted to specific purposes, and are restricted through enabling legislation and are legally enforceable. The legislation that creates the revenue stream must also stipulate the purposes for which that revenue can be used. Committed Fund Balance: Amounts that are committed for specific purposes by formal action of the governments highest level of decision making authority. These amounts are not subject to legal enforceability as in restricted, however those amounts cannot be used for any other purpose unless the government removes or changes the limitation by taking the same form of action it employed to previously impose the limitation. Assigned Fund Balance: Amounts that are intended by the government to be used for specific purposes but are neither restricted nor limited. Intent should be expressed by (a) the governing body itself, or (b) a subordinate high-level body or official possessing the authority to assign amounts to be used for specific purposes. Unassigned Fund Balance: Is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, limited, or assigned to specific purposes within the general fund. Government-wide statements and proprietary fund statements utilize an economic resources measurement focus and categorize net position among the following components: Invested in Capital Assets, Net of Related Debt indicates that portion of net position which represents the County s equity in capital assets, less the amount of related debt. Restricted Net Position indicates that portion of net position which are segregated due to external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position indicates that portion of net position which is available for general operations. II-23

114 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 2 - PROPERTY TAXES Property taxes become due and payable on November 1 of each year and are delinquent on April 1 of the following year. Discounts on property taxes are allowed for payments made prior to the April 1 delinquent date. Tax certificates for the full amount of any unpaid taxes must be sold no later than June 1 of each year. No accrual for the property tax levy becoming due in November 2013 is included in the accompanying financial statements, since such taxes are collected to finance expenditures of the subsequent period. Procedures for collecting delinquent taxes, including applicable tax certificate sales and tax deed sales, are provided by Florida Statutes and are performed by the Hendry County Tax Collector. The enforceable lien date is approximately two years after taxes become delinquent and occurs only upon request of a holder of a delinquent tax certificate. There was no significant delinquent property taxes receivable at September 30, Important dates in the property tax cycle are as follows: - Assessment roll certified- July 1 - Millage resolution approved- no later than 93 days following certification of assessment roll - Beginning of fiscal year for which taxes have been levied- October 1 - Taxes due and payable (levy date)- November 1 - Property taxes payable (maximum discount of 4 percent)- 30 days after levy date - Due date- March 31 - Taxes become delinquent (lien date)- April 1 - Tax certificate sold- prior to June 1 NOTE 3 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Deficit fund balances The East Hendry County Fire District has a deficit fund balance of $233,904. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. The East Hendry County Recreational MSBU has a deficit fund balance of $194,224. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. NOTE 4 - CASH, CASH EQUIVALENTS AND INVESTMENTS All Board depositories are banks or savings institutions designated by the State Treasurer as qualified public depositories. Chapter 280, Florida Statues Florida Security for Public Deposits Act provides procedures for public depositories to insure monies in banks and savings and loans are collateralized with the Treasurer as an agent for the public entities. II-24

115 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 4 - CASH, CASH EQUIVALENTS, AND INVESTMENTS (CONTINUED) The Public Deposit Security Trust Fund has a procedure to allocate and recover losses in the event of a default or insolvency. When public deposits are made in accordance with Chapter 280, no public depositor shall be liable for any loss thereof. Chapter 280 defines deposits as time deposit accounts, demand deposit accounts, and certificates of deposit. The total amount of bank deposits, $16,067,773, is insured by Federal depository insurance and pursuant to Chapter 280, Florida Statutes. Board investments are made in accordance with the provisions of Section , Florida Statutes Investment of Local Government Surplus Funds. Authorized investments include U.S. Government obligations, passbook savings accounts, tax-exempt State and municipal securities, certificates of deposit, Local Government Surplus Funds Investment Pool Trust Fund (SBA), the Florida Local Government Investment Trust (FLGIT), and any other investments authorized by Chapter 218, Florida Statutes. There were no violations of this policy during the fiscal year. NOTE 5 - ACCOUNTS RECEIVABLE At September 30, 2013, receivables were as follows: Enterprise: Labelle Utility Accounts receivable $ 4,042,238 Less: allowance for bad debt - Total receivables $ 4,042,238 NOTE 6 - SPECIAL ASSESSMENT In connection with the Port LaBelle Utility System (PLUS), the Board has commenced a phased construction program to provide utility service to vacant lots in Units 1 9 in Hendry County and Unit 102 in Glades County. The costs of the improvements are to be financed by special assessments levied against individual lots. The remaining balance of the assessment (if any) is to be paid over a twenty-year period through the real estate tax collection process. Interest at 7% is to be charged on the unpaid balance. The special assessment rate for lots in Hendry County is $975 per lot, and the rate per lot in Glades County is $1,080 per lot. NOTE 7 - RESTRICTED ASSETS AND LIABILITIES Restricted assets of the proprietary fund represent monies to be restricted for debt service, renewal and replacement, capital improvements and construction, and customer deposits under the terms of outstanding bond agreements, resolutions, and other contractual agreements. II-25

116 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 7 - RESTRICTED ASSETS AND LIABILITIES (CONTINUED) Restricted assets reported on the proprietary fund statement of net position at September 30, 2013, were as follows: Port LaBelle Utility Restricted cash and investments $ 2,823,970 Assets restricted for debt service are for the payment of bond principal and interest and bond reserve requirements. Assets restricted for renewal and replacement are for the payment of unusual or extra-ordinary maintenance or repairs. Additionally, assets are restricted for capital improvements and construction. Customer deposits are advance payments held until certain conditions are met. Liabilities payable from restricted assets at September 30, 2013 were comprised of the following: Port LaBelle Utility Current portion of long-term debt $ 272,349 Customer deposits 170,299 Total $ 442,648 NOTE 8 - CAPITAL ASSETS Depreciation cost was charged to functions as follows: Governmental activities: General government Court related Public safety Physical environment Transportation Economic environment Culture and recreation Human services $ 877,848 30, , , ,139 89,411 75,661 1,185,668 Total depreciation cost for governmental activities $ 3,401,366 II-26

117 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 8 - CAPITAL ASSETS (CONTINUED) Business-type activities: Water and wastewater depreciation cost $ 972,746 Capital asset activity for the fiscal year ended September 30, 2013 was as follows: Governmental Activites Beginning Ending Balance Increases Decreases Balance Capital Assets not being depreciated: Land $ 5,978,396 $ 633,994 $ - $ 6,612,390 Total capital assets not being depreciated 5,978, ,994-6,612,390 Capital assets being depreciated: Buildings and improvements 67,805,584 2,612,779-70,418,363 Furniture and equipment 26,568, ,069-26,788,968 Infrastructure 54,433, ,433,754 Total capital assets being depreciated 148,808,237 2,832, ,641,085 Less accumulated depreciation for: Buildings and improvements 25,126,219 2,059,680-27,185,899 Furniture and equipment 20,101,005 1,341,686-21,442,691 Infrastructure 54,433, ,433,754 Total accumulated depreciation 99,660,978 3,401, ,062,344 Total capital assets being depreciated, net 49,147,259 (568,518) - 48,578,741 Total governmental activities capital assets, net $ 55,125,655 $ 65,476 $ - $ 55,191,131 Business-Type Activities: Capital assets not being depreciated: Land $ 537,006 $ - $ - $ 537,006 Total capital assets not being depreciated 537, ,006 Capital assets being depreciated: Buildings & Infrastructure 29,014, ,014,590 Furniture and equipment 182, ,550 Total capital assets being depreciated 29,197, ,197,140 Less accumulated depreciation for: Buildings & Infrstructure 4,940, ,956-5,900,610 Furniture and equipment 176,985 12, ,775 Total accumulated depreciation 5,117, ,746-6,090,385 Total capital assets being depreciated, net 24,079,501 (972,746) - 23,106,755 Total business-type activities capital assets, net $ 24,616,507 $ (972,746) $ - $ 23,643,761 II-27

118 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT Business Type - Notes Payable & Revenue Bonds Notes Payable $1,430,705 bank loan, bearing interest at a rate of 7%, (15) annual payments of $157,084. Final payment due September $1,355,656 bank loan, bearing interest at a rate of 7%, (15) annual payments of $148,844. Final payment due September Total business type - notes payable $ 1,312,852 1,243,984 2,556,836 Revenue Bonds The Board issued revenue bonds for business-type activities. The descriptions and balances of the outstanding revenue bonds as of September 30, 2013, were as follows: $4,700,000 Hendry County, Water and Sewer System Revenue Bonds, Series 1996, bearing interest of 5% payable on September 1, 1996 and annually thereafter on September 1, with principal maturing from September 1, 1997 to September 1, $3,689,000 Hendry County, Water and Sewer System Revenue Bonds, Series 2007, bearing interest of 4.125% payable on September 1, 2007 and annually thereafter on September 1, with principal maturing from September 1, 2010 to September 1, Total business type - revenue bonds Total business-type Long-Term Debt $ 3,635,400 3,466,000 7,101,400 9,658,236 Government Funds - Notes Payable & Other Payables Notes Payable $621,833 capital equipment lease, bearing interest at a rate of 4.0%, one annual payment of $85,668. Final payment due June $25,547 loan from a financial institution for the purpose of machinery, bearing interest at a variable rate which was 4.275% at September 30, 2013 quarterly payments of $1426. Final payment due October $650,000 loan from a financial institution for the purchase of airplane hangars bearing interest at a rate of 2.625%, annual payments of differing values. Final payment due January $ 234,948 5, ,766 II-28

119 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) Government Funds - Notes Payable & Other Payables (Continued) Notes Payable (Continued) $450,000 loan from a financial institution used for road improvements, bearing interest at a rate of 4.5%, annual payments of $80,000. Final payment due October $125,363 bank loan for the purchase of an ambulance, bearing interest at a rate of 3.5%, with three annual payments of $40,000. Final payment due February $67,556 bank loan for the purchase of a fire truck, bearing interest at a rate of 3.5%, with equal annual payments of $20,000. Final payment due February $ 173,685 52,870 32,409 $260,000 bank loan for the purchase of a new 800MHz communication system, bearing interest at a rate of 2.99%, with equal annual payments of $37,143. Final payment due December 28, ,857 Total governmental - notes payable Other Payables Post-closure care costs for monitoring of the landfill for twenty years after the landfill has stopped accepting waste and the final cover has been completed. The County has 4 years remaining. Total governmental other paypables Total Government Funds Long-Term Debt TOTAL LONG-TERM DEBT $ 977, , ,020 1,142,218 10,800,454 II-29

120 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) The annual debt service requirements at September 30, 2013, were as follows: Government Funds Business-type Long-Term Debt Long-Term Debt Total Fiscal Year(s) Principal Interest Principal Interest Principal Interest 2014 $ 296,175 $ 34,981 $ 272,349 $ 506,451 $ 568,524 $ 541, ,044 25, , , , , ,778 16, , , , , ,709 8, , , , , ,018 4, , , , , ,494 2, , , , , , , , , ,271,423 1,626,386 2,271,423 1,626, ,671, ,538 1,671, , ,747, ,143 1,747, , , , , , ,021, ,444 1,021, ,444 Total $ 1,142,218 $ 93,210 $ 9,658,236 $ 6,877,759 $ 10,800,454 $ 6,970,969 Bond Resolutions The resolution for the bonds established certain accounts and determined the order in which certain revenues are to be deposited into those accounts. In addition, there are various other covenants established by the official statements and Board resolutions, including such items as debt service coverage, reporting requirements, and maintenance of facilities. Management believes that it has complied, in all material respects, with these covenants. The 1996 Series Bonds pledge the net revenues of the utility system for the payment of the principal, redemption price and the interest on the bonds. The Board covenants to fix, establish, and maintain rates and to collect such revenues from the product and services to provide in each fiscal year net revenues which at least equal the annual debt service on all of the outstanding bonds. II-30

121 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 9 - LONG-TERM DEBT (CONTINUED) Bond Resolutions (Continued) Changes in bonded and other indebtedness of the Board for the year ended September 30, 2013, was as follows: Beginning Ending Balance Balance Due Within 10/1/2012 Additions Reductions 9/30/2013 One Year Governmental Activities Notes payable $ 963,357 $ 260,000 $ (246,159) $ 977,198 $ 254,920 Landfill Closure 243,392 - (78,372) 165,020 41,255 Other Post Employment Benefits 342,108 86, ,864 - Compensated absences 299, , ,203 - Total governmental activities long-term liabilities $ 1,848,683 $ 546,133 $ (324,531) $ 2,070,285 $ 296,175 Business-Type Activities Port LaBelle Utility Systems Notes payable $ 2,675,479 $ - $ (118,643) $ 2,556,836 $ 126,949 Revenue bonds 7,239,300 - (137,900) 7,101, ,400 Compensated absences 29,593 (4,292) 25,301 - Total business-type activities long-term liabilities $ 9,944,372 $ - $ (260,835) $ 9,683,537 $ 272,349 NOTE 10 - LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS State and Federal laws and regulations require that Hendry County place a final cover on its landfill that was closed and perform certain maintenance and monitoring functions at the landfill site for twenty years after closure. The liability is being recognized based on the future post closure costs that will be incurred after the date the landfill no longer accepts waste. The landfill stopped accepting solid waste on December 1, 1992, and finished placing the required cover on the landfill during the fiscal year ended September 30, Since the landfill is closed, the estimated liability is based on the current estimated costs for services to monitor and maintain the closed landfill for the required period. However, the actual cost of postclosure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The Board is required by state and federal regulations to make annual contributions to finance the post closure care. The Board has set aside funds in the amount of $41,255 for post closure care. The funding for costs for providing the final cover was provided by Lee County under the interlocal agreement for the joint solid waste disposal program. II-31

122 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 11 - CONTINGENCIES Grants and Assistance Activities of certain funds of the Board are financed in whole or in part by various forms of grants and assistance, principally from the federal government. There can be no absolute assurance that such assistance will continue in the future at the present levels. Amounts received from grantor agencies are subject to audit or adjustment by the grantor agencies. Also, any amounts disallowed could constitute liabilities of the applicable funds. Litigation The Board, in accordance with the normal conduct of its affairs, is involved in various judgments, claims, and litigation. It is expected that the final settlement of these matters will not materially affect the financial statements of the Board. NOTE 12 - RETIREMENT PLAN Plan Description and Provisions The Board participates in the Florida Retirement System (FRS), a cost sharing, multiple-employer, public employee retirement system, which covers substantially all of the full-time and part-time employees. The FRS is noncontributory and is totally administered by the State of Florida. Benefits under the plan vest after six years of service. Employees who retire at or after age 62 (age 55 for special risk) or 30 years of service (25 years for special risk), with six years of credited service, are entitled to an annual retirement benefit, payable monthly for life. The FRS also provides for early retirement at reduced benefits and death and disability benefits. These benefit provisions and all other requirements are established by Chapters 112 and 121, Florida Statutes. Effective July 1, 2011, covered members are required to contribute 3% of gross earnings. The Board is required to make contributions based on actuarially determined statewide contribution rates. The contribution rates by job class for the periods from October 1, 2012 through June 30, 2013 and July 1, 2013 through September 30, 2013, respectively, were as follows: regular, 5.18% and 6.95%; senior management, 6.30% and 18.31%; county elected officers, 10.23% and 33.03%; special risk, 14.90% and 19.06%; and DROP participants, 5.44% and 12.84%. The Board s contributions made during the years ended September 30, 2013, 2012, and 2011 were $513,576, $497,064, and $755,831, respectively, equal to the required contributions for each year. A copy of the FRS s June 30, 2013 annual report can be obtained by writing to the Division of Retirement, 2639 North Monroe Street, Building C, Tallahassee, Florida , or by phoning (850) II-32

123 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 13 - RISK MANAGEMENT The Board is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The County is a member of Public Risk Management (PRM), a local government liability risk pool. PRM administers insurance activities relating to property, general, automobile, public official's liability, workers compensation, health, and auto physical damage. The pool assesses each member its pro rata share of the estimated amount required to meet current year losses, operating expenses and reinsurance costs (premiums). To reduce its exposure to large losses on all types of insured events PRM uses reinsurance policies purchased from third parties. The Fund is fully funded annually. Major uninsurable risks include damages to infrastructure assets and damages or governmental fines due to seepage, pollution, or contamination of any kind. Since the amounts of loss cannot be reasonably estimated and the likelihood is undeterminable, no provision for such occurrences is included in these financial statements. NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS Plan Description In accordance with Section , Florida Statutes, because the Board provides medical plans to employees of the County and their eligible dependents, the Board is also required to provide retirees the opportunity to participate in the group employee health plan. Retirees participating in the group insurance plans offered by the County are required to contribute 100% of the active participants cost of participation. Eligibility for Insurance Coverage Employees of the County and all constitutional officers who were participants in the existing medical plan at the time of retirement are entitled to participate in the Plan. Depending on the class of employee the following eligibility rules apply: Regular Class and Elected Officials - Age 62 and 6 years of service or 30 years of service, regardless of age, is normal retirement. Employees may retire early at age 43 and 6 years of service. Special Risk - Age 55 and 6 years of service or 25 years of service, regardless of age is normal retirement. Employees may retire early at age 36 and 6 years of service. Membership As of September 30, 2013, membership consisted of: Active Employees 130 Retired Participants 2 II-33

124 BOARD OF COUNTY COMMISSIONERS NOTES TO THE FINANCIAL STATEMENTS September 30, 2013 NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Funding Policy Funding for this plan is on a pay-as-you-go basis. The Program is currently unfunded. There is no separate trust through which benefits for retirees are funded. No assets are currently accumulated or earmarked for this purpose. Annual OPEB Costs and Net OPEB Obligation Hendry County had an actuarial valuation performed for the plan as of October 1, 2012 to determine the funded status of the plan as of that date, as well as the employer's annual required contribution (ARC) for the fiscal year ended September 30, The Board s annual OPEB cost for the fiscal year was set at $128,000 as the transition liability was set to zero as of September 30, The Board s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net obligation from 2013 is as follows: Fiscal Year Ended Annual OPEB Cost Employer contributed % of Annual OPEB Cost Contributed Net OPEB Obligation September 30, 2013 $ 128,000 $ 23, % $ 428,864 The funded status of the plan as of September 30, 2012 was as follows: Actuarial Accrued Liability (AAL) $ 882,788 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 882,788 Covered Payroll $ 4,419,030 Ration of UAAL to Covered Payroll 20.0% NOTE 15 - COMMITMENTS (CONTINUED) Fund Balance Commitments The County adopted a resolution to commit $5,000,000 of the General Funds' fund balance for a disaster emergency reserve to enable the County to properly respond to emergencies affecting the County caused by natural and other disasters. II-34

125 REQUIRED SUPPLEMENTARY INFORMATION

126 BOARD OF COUNTY COMMISSIONERS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Law Court Local Enforcement Section 8 Technology Affordable 911 Trust Housing Fund Housing Emergency ASSETS Cash and cash equivalents $ 2,207 $ 50,694 $ 37,530 $ 446,218 $ 51,660 Receivables (net) - - 3, ,425 Total assets $ 2,207 $ 50,694 $ 40,600 $ 446,228 $ 71,085 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ 246 $ 4,109 $ 17 $ 10,822 Accrued liabilities Deferred revenue Other liabilities ,522 - Total liabilities , ,539 10,865 Fund balances Assigned 2,207 49,908 36,491 17,689 60,220 Unassigned Total fund balances (deficits) 2,207 49,908 36,491 17,689 60,220 Total liabilities and fund balances $ 2,207 $ 50,694 $ 40,600 $ 446,228 $ 71,085

127 Special Revenue Funds Port Labelle East Hendry East Hendry West Hendry West Hendry East Hendry Street County County County County County Lighting Drainage Fire Fire Mid-County Recreational Recreational District District District District MSBU MSBU MSBU $ 5,645 $ 132,635 $ 45,572 $ 408,297 $ 297,295 $ 556,184 $ 1, ,429 3,583 2,461 18, $ 5,892 $ 132,676 $ 47,001 $ 411,880 $ 299,756 $ 574,989 $ 1,315 $ 5,815 $ 7,234 $ 272,820 $ 122,792 $ 9,107 $ 21,602 $ 194, ,085 1,222-8,472 1, ,815 7, , ,014 9,107 30, , , , , , (233,904) (194,224) ,442 (233,904) 287, , ,915 (194,224) $ 5,892 $ 132,676 $ 47,001 $ 411,880 $ 299,756 $ 574,989 $ 1,315 II - 35

128 BOARD OF COUNTY COMMISSIONERS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Airport North Four Wheeler Sears Felda Labelle Corners Road MSBU MSBU MSBU MSBU MSBU ASSETS Cash and cash equivalents $ 907,942 $ 408,912 $ 468,944 $ 506,396 $ 162,513 Receivables (net) ,903 1,134 20, Total assets $ 908,714 $ 436,815 $ 470,078 $ 527,348 $ 162,821 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 6,651 $ 2,956 $ 3,750 $ 2,849 $ 3,903 Accrued liabilities Deferred revenue Other liabilities Total liabilities 6,651 2,956 3,750 2,849 3,903 Fund balances Assigned 902, , , , ,918 Unassigned Total fund balances (deficits) 902, , , , ,918 Total liabilities and fund balances $ 908,714 $ 436,815 $ 470,078 $ 527,348 $ 162,821

129 Special Revenue Funds Hooker's Phillips Sky Airglades LaBelle 3rd Party Point Mosquito Road Valley Building Fines and Airport Airport Comp Plan Lighting Control MSBU MSBU Projects forfeitures Fund Fund Study $ 16,803 $ 868,328 $ 3,646 $ 327,014 $ 31,968 $ 401,282 $ 236,111 $ 921 $ - - 2, , , , ,122 - $ 16,803 $ 871,096 $ 3,646 $ 327,234 $ 73,812 $ 674,215 $ 421,161 $ 255,043 $ - $ 1,306 $ 100,191 $ - $ 902 $ 3,146 $ 66,913 $ 183, ,323 $ , , , ,000 1,500 35,467 29,251-1, , ,146 80, , ,708-15, ,399 3, , , , , , , ,399 3, ,332 68, , , ,335 - $ 16,803 $ 871,096 $ 3,646 $ 327,234 $ 73,812 $ 674,215 $ 421,161 $ 255,043 $ - II-36

130 BOARD OF COUNTY COMMISSIONERS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Homeless & Impact Impact Impact Impact Rehousing Fees Fees Fees Fees HPRP Zone One Zone Two Zone Three Zone Four ASSETS Cash and cash equivalents $ - $ - $ - $ - $ - Receivables (net) Total assets $ - $ - $ - $ - $ - LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ - $ - $ - $ - Accrued liabilities Deferred revenue Other liabilities Total liabilities Fund balances Assigned Unassigned Total fund balances (deficits) Total liabilities and fund balances $ - $ - $ - $ - $ -

131 Special Revenue Funds Impact Impact Impact Impact Fees Impact Impact Impact Impact Fees Impact Fees Fees Law Fees Fees Fees Fees Pioneer Fees Public Zone Five Enforcement School Board Admin West Park Felda Fire Fire/EMS Library Buildings $ 46,328 $ 581 $ - $ - $ - $ 777 $ 773 $ 149 $ 1, $ 46,328 $ 581 $ - $ - $ - $ 777 $ 773 $ 149 $ 1,415 $ - $ - $ - $ - $ - $ - $ - $ - $ , , , ,415 $ 46,328 $ 581 $ - $ - $ - $ 777 $ 773 $ 149 $ 1,415 II-37

132 BOARD OF COUNTY COMMISSIONERS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Impact Total Fees Seven K Non-Major Admin Estates Capital Governmental Phase II MSBU Projects Funds ASSETS Cash and cash equivalents $ - $ 2,172 $ 808,349 $ 7,236,393 Receivables (net) ,883 1,383,143 Total assets $ - $ 2,172 $ 1,334,232 $ 8,619,536 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ - $ - $ 1,137,275 Accrued liabilities ,967 Deferred revenue Other liabilities ,246 Total liabilities ,670,488 Fund balances Assigned - 2,172 1,334,232 $ 7,308,510 Unassigned (359,462) Total fund balances (deficits) - 2,172 1,334,232 $ 6,949,048 Total liabilities and fund balances $ - $ 2,172 $ 1,334,232 $ 8,619,536 II-38

133 BOARD OF COUNTY COMMISSIONERS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Law Court Local Enforcement Section 8 Technology Affordable Emergency Trust Housing Fund Housing 911 REVENUES Intergovernmental $ - $ 229,923 $ - $ 362,479 $ 101,936 Taxes Charges for services - 1,085 38, ,463 Fines and forfeitures 5, Miscellaneous (250) Total revenues 5, ,008 38, , ,149 EXPENDITURES Current General government , Court related Public safety 13, ,670 Physical environment Transportation Economic environment - 231, ,480 - Culture and recreation Human Services Capital outlay General government Physical environment Debt service Principal retirement Interest and fiscal charges Total expenditures 13, ,038 49, , ,670 Excess (deficiencies) of revenues over (under) expenditures (8,597) (30) (11,606) ,479 OTHER FINANCING SOURCES (USES) Transfers in ,000 Transfers out - - (93,543) - - Total other financing sources (uses) - - (93,543) - 100,000 Net change in fund balances (8,597) (30) (105,149) ,479 Fund balances - beginning 10,804 49, ,640 16,949 (69,259) Fund balances - ending $ 2,207 $ 49,908 $ 36,491 $ 17,689 $ 60,220

134 Special Revenue Funds Port Labelle East Hendry East Hendry West Hendry East Hendry West Hendry Street County County County County County Lighting Drainage Fire Fire Mid-County Recreational Recreational District District District District MSBU MSBU MSBU $ - $ - $ - $ - - $ - $ - 41,999 46, , ,989 $ 287, , , , ,866 (684) 1,609 4, ,999 46, , , , , , , , ,051 34, , , , , , , , ,051 34, , , , , ,199 (9,052) 12,128 (26,454) 81,622 (160,778) 29,599 2, (9,052) 12,128 (26,454) 81,622 (160,778) 29,599 2,833 9, ,314 (207,450) 206, ,427 (223,823) 542,082 $ 77 $ 125,442 $ (233,904) $ 287,866 $ 290,649 $ (194,224) $ 544,915 II-39

135 BOARD OF COUNTY COMMISSIONERS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Airport North Four Wheeler Sears Felda Labelle Corners Road MSBU MSBU MSBU MSBU MSBU REVENUES Intergovernmental $ 3,615 $ 39,818 $ - $ 68,715 $ - Taxes 96,989 23,080 50,110 17,177 96,126 Charges for services Fines and forfeitures Miscellaneous 1, , Total revenues 102,322 63,282 50,677 87,317 96,413 EXPENDITURES Current General government Court related Public safety Physical environment 47,720 15,502 37,184 15,463 19,567 Transportation Economic environment Culture and recreation Human Services Capital outlay General government - 39, ,429 Physical environment Debt service Principal retirement ,867 Interest and fiscal charges ,565 Total expenditures 47,720 55,320 37, ,892 67,999 Excess (deficiencies) of revenues over (under) expenditures 54,602 7,962 13,493 (65,575) 28,414 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 54,602 7,962 13,493 (65,575) 28,414 Fund balances - beginning 847, , , , ,504 Fund balances - ending $ 902,063 $ 433,859 $ 466,328 $ 524,499 $ 158,918

136 Special Revenue Funds Impact Impact Hooker's Phillips Sky LaBelle Airglades Fees Fees Point Mosquito Road Valley Building Fines and Airport Airport Zone Zone Lighting Control MSBU MSBU Projects Forfeitures Fund Fund One Two $ - $ 18,500 $ - $ - $ 25,000 $ 157,204 $ 550,455 $ 969,743 $ - $ - 11, ,591-15, , ,106 1,011, , , , ,918 30, , , , ,162 85, ,665 1,132,701 2,299, , , , , ,420-9, ,782 1,184, , , ,396, , ,018-7, , , , ,420-13,386 45, ,867 1,122,839 2,580,548 7, (145,374) 8 2,776 39, ,798 9,862 (281,317) (7,578) , (25,000) (83,627) (25,000) (30,834) (145,374) 8 2,776 14, ,964 9,862 (281,317) (7,578) - 14, ,773 3, ,556 54, , , ,135 7,578 - $ 15,497 $ 767,399 $ 3,646 $ 326,332 $ 68,666 $ 593,925 $ 112,335 $ 201,818 $ - $ - II-40

137 BOARD OF COUNTY COMMISSIONERS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Year Ended September 30, 2013 Special Revenue Funds Impact Impact Impact Impact Impact Fees Fees Fees Fees Fees Impact Zone Zone Zone Law School Fees Three Four Five Enforcement Board Admin REVENUES Intergovernmental $ - $ - $ - $ - $ - $ - Taxes Charges for services Fines and forfeitures Miscellaneous Total revenues EXPENDITURES Current General government Court related Public safety Physical environment Transportation Economic environment Culture and recreation Human Services Capital outlay General government Physical environment - 41, Debt service Principal retirement Interest and fiscal charges Total expenditures - 41, Excess (deficiencies) of revenues over (under) expenditures - (41,108) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances - (41,108) Fund balances - beginning - 41,108 46, Fund balances - ending $ - $ - $ 46,328 $ 581 $ - $ -

138 Special Revenue Funds Impact Impact Impact Total Impact Impact Fees Fees Impact Fees Seven K Non-Major Fees Fees Pioneer Public Fees Admin Estates Capital Governmental West Park Felda Fire Fire/EMS Buildings Library Phase II MSBU Projects Funds $ - $ - $ - $ - $ - $ - $ - $ 512,493 $ 3,039, ,126,366 5,116, ,138, , , ,619 1,031, ,320 3,064,478 11,633, , , , ,658, , ,853, , , , ,780 1,848, , , , ,918 9,149, ,172 2,545,560 2,484, , (2,255,537) (2,457,707) (2,255,537) (2,304,914) , , , , ,044,209 6,769,278 $ - $ 777 $ 773 $ 1,415 $ 149 $ - $ 2,172 $ 1,334,232 $ 6,949,048 II-41

139 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special-Purpose Financial Statements Performed in Accordance with Government Auditing Standards To the Honorable Board of County Commissioners of Hendry County, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the Hendry County Board of County Commissioners, Hendry County, Florida, (the "Board") as of and for the fiscal year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the Board's special-purpose financial statements, and have issued our report thereon dated June 20, Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Board'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 special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Board s internal control. Accordingly, we do not express an opinion on the effectiveness of the Board 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's specialpurpose 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. II-42

140

141 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter To the Honorable Board of County Commissioners of Hendry County, Florida We have audited the special-purpose financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the Hendry County Board of County Commissioners, Hendry County, Florida, (the "Board"), as of and for the fiscal year ended September 30, 2013, and have issued our report thereon dated June 20, 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 of America. We have also issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters. Disclosures in that report which is dated June 20, 2014, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter , Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor s reports or schedule: 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 recommendations made in the preceding annual financial audit report. Section (1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section , Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Hendry County, Florida, Board complied with Section , Florida Statutes. Section (1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. II-44

142

143 HENDRY COUNTY Board of County Commissioners P.O. Box 2340 LaBelle, Florida Charles T. Chapman IV County Administrator Mark F. Lapp County Attorney Barbara Butler Clerk of the Courts June 26, David C. Martin Auditor General P.O. Box 1735 Tallahassee, Florida Per Rule (1), this is our response to auditor's comments contained in the audit report for the fiscal year September 30, Report on Internal Accounting Controls Prior year comments and recommendations which continue to apply: None. Current year comments: None. Independent Auditor Management Letter Prior year comments and recommendations which continue to apply: None Current Year Comments and Recommendation: None. If you should have any questions or comments regarding these responses, please contact me at (863) Coun inistrator Hendry County, Florida Janet B. Taylor District I Darrell Harris District 2 Don Davis District 3 II-46 Michael Swindle District 4 Karson Turner District 5

144 CLERK OF THE CIRCUIT COURT September 30, 2013 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

145 TABLE OF CONTENTS Report of Independent Auditor s III-1 III-3 Special Purpose Financial Statements Balance Sheet Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Statement of Fiduciary Net Position Agency Funds III-4 III-5 III-6 Notes to Financial Statements III-7 III-13 Required Supplemental Information Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund III-14 Combining Statements Combining Statement of Changes in Assets and Liabilities All Agency Funds III-15 III-17 Independent Auditor s 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 Management Letter Response to Management Letter III-18 III-19 III-20 III-21 III-22

146 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report Honorable Barbara S. Butler Hendry County Clerk of the Circuit Court LaBelle, Florida Report on the Financial Statements We have audited the accompanying special-purpose financial statements of each major fund and the aggregate remaining fund information of the Hendry County, Florida, Clerk of the Circuit Court, (the "Clerk") as of and for the fiscal year ended September 30, 2013, as listed in the table of contents. We also have audited the financial statements of each of the Clerk's agency funds as of and for the fiscal year ended September 30, 2013, presented as other supplementary information in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose 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. Auditor's Responsibility Our responsibility is to express opinions on these special-purpose 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 from 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. III-1

147 Auditor's Responsibility, continued 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. As discussed in Note 1, the accompanying special-purpose financial statements were prepared for the purpose of complying with Section (2), Florida Statutes, and Chapter , Rules of the Auditor General - Local Governmental Entity Audits, and are not intended to be a complete presentation of the financial position and changes in financial position of the Clerk. Additionally, the special-purpose financial statements present only the Clerk and are not intended to present the financial position and changes in financial position of Hendry County, Florida taken as a whole. Opinions In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each agency fund of the Clerk as of September 30, 2013 and the respective changes thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page III-14 be presented to supplement the special-purpose financial statements. Such information, although not a part of the special-purpose financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the special-purpose financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, 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 special-purpose financial statements, and other knowledge we obtained during our audit of the special-purpose financial statements. We do 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. III-2

148

149 CLERK OF THE CIRCUIT COURT Balance Sheet - Governmental Funds September 30, 2013 General Fund Modernization Trust Fund Total ASSETS Cash $ 286,530 $ 272,764 $ 559,294 Accounts receivable 4,324-4,324 Due from other governments 71,475 5,381 76,856 Prepaid expenses - 2,000 2,000 Total Assets $ 362,329 $ 280,145 $ 642,474 LIABILITIES AND FUND EQUITY Liabilities Accounts payable $ 24,950 $ 14,742 $ 39,692 Accrued payroll 39,299-39,299 Deferred revenue 117, ,562 Due to other governments 180, ,518 Total Liabilities 362,329 14, ,071 Fund Equity Fund balance Assigned - 265, ,403 Total Liabilities and Fund Equity $ 362,329 $ 280,145 $ 642,474 See accompanying notes. III - 4

150 CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2013 General Fund Modernization Trust Fund Total Revenues Intergovernmental $ 348 $ 112,682 $ 113,030 Miscellaneous 1,002,606-1,002,606 Total Revenues 1,002, ,682 1,115,636 Expenditures General government 824, , ,941 Court related 1,002,954-1,002,954 Total Expenditures 1,827, ,325 1,994,895 Excess of revenues over (under) expenditures (824,616) (54,643) (879,259) Other financing sources (uses) Operating transfers in 851, ,413 Operating transfers out (26,797) - (26,797) Total other financing sources (uses) 824, ,616 Excess of revenues and other sources sources over (under) expenditures and other sources - (54,643) (54,643) Fund balance - October 1, , ,046 Fund balance - September 30, 2013 $ - $ 265,403 $ 265,403 See accompanying notes. III - 5

151 CLERK OF THE CIRCUIT COURT Statement of Fiduciary Net Position - Agency Funds September 30, 2013 Operating Fines and Christmas Trust Registry Forfeitures Club Total ASSETS Cash $ 282,246 $ 161,695 $ 436,953 $ 11,924 $ 892,818 Accounts receivable 1, ,194 Total Assets $ 283,440 $ 161,695 $ 436,953 $ 11,924 $ 894,012 LIABILITIES Accounts payable $ 127,712 $ 1,024 $ 144,632 $ - $ 273,368 Due to other governments 155, , , ,720 Due to individuals ,924 11,924 Total Liabilities $ 283,440 $ 161,695 $ 436,953 $ 11,924 $ 894,012 See accompanying notes. III - 6

152 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 The Clerk, as an elected constitutional officer was established by the Constitution of the State of Florida, Article VIII, Section 1 (d). As such, the Clerk's special purpose financial statements are included in the government wide financial statements of Hendry County, the primary government. A component unit is a legally separate organization for which the elected officials of the primary government are financially accountable. Based on the criteria established by Statement of Governmental Accounting Standards Board Number 14, "Financial Reporting Entity," there are no component units included in the Clerk's financial statements. (a) Fund Accounting The accounts of the Clerk are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, as appropriate. Government resources are allocated to, and accounted for, in individual funds, based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The following fund types are utilized by the Clerk: Governmental Funds General Fund The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Clerk, which are not properly accounted for in another fund. All operating revenues, which are not specifically restricted or designated as to use, are recorded in the General Fund. Excess revenues at the end of the year, due back to the Board of County Commissioners and the State of Florida, are shown as operating transfers out. Special Revenue Funds The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. III - 7

153 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fiduciary Funds Agency Funds The Agency Funds are used to account for assets held by public officials in a trustee capacity or as an agent for individuals, private organizations, other governments and/or other funds. (b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation Governmental Funds CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 The General Fund and Special Revenue Funds are accounted for on a "spending" or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on the balance sheet. Accordingly, the reported undesignated fund balances (net current assets) art considered a measure of available, spendable or appropriable resources. General operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Fiduciary Funds 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 revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is followed by all funds. The modification in such method from the accrual basis is that revenues are recorded when they become measurable and available to finance operations of the current year. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include: 1. Principal and interest on general long-term debt, which is recognized when due; and 2. Expenditures are not divided between years by the recording of prepaid expenses. III - 8

154 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) Budgetary Process CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 Chapter 218, Florida Statutes, governs the preparation, adoption and administration process of the Clerk's annual budget. The Clerk's budget, however, is prepared in two parts. One portion relates to the State court system, including Recording, and is required to be filed with the State Court Administrator. The remaining portion relates to the requirements of the Clerk as ex officio to the Board, Clerk of the Board of County Commissioners, County Auditor and custodian, or treasurer, of all County funds. The budget for this portion is submitted to and approved by the Board of County Commissioners. However, the budget in total is required to be filed with the State Court Administrator. The annual budget serves as the legal authorization for expenditures. Expenditures cannot legally exceed the total amount budgeted for each fund. All budgets are prepared on the modified accrual basis. The level of control for appropriations is exercised at the functional level. Encumbrances Encumbrance accounting, under which purchase orders and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is not employed by the Clerk. (c) Assets, Liabilities, and Equity Capital Assets Acquisitions of tangible personal property are recorded as expenditures in the General Fund at the time of purchase. These assets are reported to the Hendry County, Florida, Board of County Commissioners and are recorded in the government wide financial statements. Compensated Absences The Clerk's employees accumulate sick and annual leave based on the number of years of continuous service and other criteria. Upon termination of employment, employees generally receive payment for accumulated annual and sick leave. As of September 30, 2013, the Clerk had $88,053 in long-term compensated absences payable. This amount is reported in the government-wide financial statements of Hendry County, Florida. III - 9

155 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (c) Assets, Liabilities, and Equity (continued) CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 Statement of Governmental Accounting Standards Board No. 16, "Accounting for Compensated Absences", requires the compensated absences liability to be measured using the salary rate in effect at the balance sheet date and requires additional amounts to be accrued for certain salary related payments associated with the payment of compensated absences. The liability shown in the financial statements of Hendry County has been accrued in accordance with this criteria. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Clerk to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenditures or expenses during the reporting period. Actual results could differ from those estimates. Fund Balances Assigned Assigned fund balances are constrained by the Clerk's intent to be used for specific purposes, but are neither restricted nor committed. Unassigned Fund balance that has not been reported in any other classification. When both assigned and unassigned resources are available for use, it is the Clerk's policy to use assigned resources first, then unassigned resources as needed. New Accounting Standards Beginning with fiscal year 2013, the Clerk implemented GASB Statement No. 63; Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. This statement requires a Statement of Fiduciary Net Position (rather than net assets) format which segregates deferred inflows and deferred outflows from assets and liabilities respectively. Specific items required to be broken out as deferred inflows or deferred outflows are discussed in GASB Statements 53 and 60. These items are Derivative Investments and Service Concession Arrangements respectively. None of these items affect the Clerk at this time. The other position of GASB Statement 63 is nomenclature. Statement No. 64; Derivative Instruments: Application of Hedge Accounting Termination Provisions is not applicable to the Clerk. III - 10

156 NOTE 2 - CASH AND INVESTMENTS CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 During the fiscal year, the Clerk maintained deposits in interest-bearing savings and checking accounts. At September 30, 2013, the bank balance of all accounts was $1,554,331 and the book balance of deposits was $1,451,577. The Clerk had $535 of cash on hand at September 30, The deposits whose values exceeded the limits of federal depository insurance are entirely insured or collateralized pursuant to the Public Depository Security Act of the State of Florida, Chapter 280 of the Florida Statutes. The Clerk held no investments during the fiscal year. NOTE 3 - RETIREMENT PLAN Plan Description and Provisions The Clerk contributes to the Florida Retirement System (the "System"), a cost-sharing multiple employer PERS defined benefit pension plan controlled by the State Legislature and administered by the Florida Department of Administration, Division of Retirement. The System provides retirement and disability benefits, annual cost-of-living adjustments, a health insurance subsidy, and survivor benefits to plan members and beneficiaries, respectively. The System was established in 1970 by Chapter 121, Florida Statutes. Changes to the law can be made only by an act of the Florida Legislature. Rules governing the operations and administration of the System may be found in Chapter 60S of the Florida Administrative Code. The Florida Retirement System Annual Report is a document printed for members of the Legislature and the public, reflecting the financial operation and condition of the state-administered retirement systems. The publication contains financial statements, actuarial comments, investment information, and statistical data on the System. A copy can be obtained by writing to Division of Retirement, Research, Education, & Policy Section, 2639-C North Monroe Street, Tallahassee, Florida Funding Policy Presently, the System requires contributions from covered members of 3% of gross wages. The current rates, based on employees gross earnings, are regular employees, 6.95%; senior management, 18.31%; DROP participants, 12.84%; and elected officials, 33.03%. The contribution requirements of the Clerk are established and may be amended by the State Legislature. The Clerk's contributions to the System for the fiscal year ended September 30, 2013 were $77,249 equal to the required contributions. III - 11

157 CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 NOTE 4 - CONTINGENCIES The Clerk is involved from time to time in certain routine litigation, the substance of which as other liabilities for recoveries, would not materially affect the financial position of the Clerk. NOTE 5 - INSURANCE The Clerk participates in the County-wide self insurance program. The Hendry County, Florida, Board of County Commissioners maintains a self-insurance internal service fund to administer insurance activities relating to employee health insurance, life insurance, general liability, automobile liability and workers' compensation. Also, the Board carries excess insurance coverage for workers' compensation. Charges to operating departments are based upon amounts believed by management to meet the required annual payout during the fiscal year and to pay for the estimated operating costs of the program and for premiums for third party carrier insurance plans. For fiscal year ended September 30, 2013, the Clerk was charged $263,450. NOTE 6 - GENERAL LONG-TERM DEBT The following changes in general long-term debt occurred during the year ended September 30, 2013: Long-term debt payable at October 1, 2012 $ 92,457 Increase in accrued compensated absences (4,404) Long-term debt payable at September 30, 2013 $ 88,053 General long-term debt is comprised of the following: Noncurrent portion of compensated absences. Employees of the Clerk are entitled to paid annual leave, based on length of service and job classification. $ 88,053 III - 12

158 NOTE 7- OTHER POST EMPLOYMENT BENEFITS Plan Description CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2013 In accordance with Section , Florida Statutes, because the Clerk provides medical plans to employees of the Tax collector and there eligible dependents, the Tax Collector is also required to provide retirees the opportunity to participate in the group employee health plan. Retirees participating in the group insurance plans offered by the County are required to contribute 100% of the active participants. Eligibility for Insurance Coverage Employees of the County and all constitutional officers who were participants in the existing medical plan at the time of Retirement are entitled to participate in the Plan. Depending on the class of employee the following eligibility rules apply: Regular Class and Elected Officials - Age 62 and 6 years of service or 30 years of service, regardless of age, is normal retirement. Employees may retire early at age 43 and 6 years of service. Special Risk - Age 55 and 6 years of service or 25 years of service, regardless of age is normal retirement. Employees may retire early at age 36 and 6 years of service. %of Annual Annual OPEB Employer OPEB Cost Net OPEB Fiscal Year Ended cost Contributed Contributed Obligation 30-Sep-13 $ 27,118 $ 4, % $ 90,859 The funded status of the plan as of September 30, 2013 was as follows: Actuarial Accrued Liability (AAL) $ 187,026 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 187,026 Covered Payroll $ 936,209 Ration of UAAL to Covered Payroll 20.0% III - 13

159 REQUIRED SUPPLEMENTARY INFORMATION

160 CLERK OF THE CIRCUIT COURT GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended September 30, 2013 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Revenues Intergovernmental $ - $ - $ 348 $ 348 Charges for Services 1,091,655 1,091,655 1,002,606 (89,049) Total Revenues 1,091,655 1,091,655 1,002,954 (88,701) Expenditures General Government Personal Services 746, , ,479 (9,519) Operating Expenses 95, , ,137 36,314 Court Related Personal Services 886, , ,931 9,464 Operating Expenses 205, , ,023 79,237 Total Expenditures 1,933,435 1,943,066 1,827, ,496 Excess of expenditures over revenues (841,780) (851,411) (824,616) 26,795 Other financing sources (uses) Operating transfers in 841, , ,413 2 Operating transfers out - - (26,797) (26,797) Total other financing sources (uses) 841, , ,616 (26,795) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - October 1, Fund balance - September 30, 2013 $ - $ - $ - $ - III - 14

161 CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds For the fiscal year ended September 30, 2013 OPERATING TRUST Balance Balance October 1, September 30, 2012 Additions Deletions 2013 ASSETS Cash $ 252,957 $ 4,095,116 $ 4,065,827 $ 282,246 Accounts receivable 30 17,836 16,672 1,194 Total Assets $ 252,987 $ 4,112,952 $ 4,082,499 $ 283,440 LIABILITIES Accounts payable $ 153,536 $ 676,253 $ 702,077 $ 127,712 Due to other governments 99, , , ,728 Total Liabilities $ 252,987 $ 878,877 $ 848,424 $ 283,440 REGISTRY OF COURT ASSETS Cash $ 107,868 $ 1,651,017 $ 1,597,190 $ 161,695 Total Assets $ 107,868 $ 1,651,017 $ 1,597,190 $ 161,695 LIABILITIES Accounts Payable - 800, ,758 1,024 Due to Other Governments 107, , , ,671 Total Liabilities $ 107,868 $ 1,649,486 $ 1,595,659 $ 161,695 III - 15

162 CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2013 CHRISTMAS CLUB Balance Balance October 1, September 30, 2012 Additions Deletions 2013 ASSETS Cash $ 9,419 $ 12,848 $ 10,343 $ 11,924 Total Assets $ 9,419 $ 12,848 $ 10,343 $ 11,924 LIABILITIES Due to individuals $ 9,419 $ 12,848 $ 10,343 $ 11,924 Total Assets $ 9,419 $ 12,848 $ 10,343 $ 11,924 FINES AND FORFEITURES ASSETS Cash $ 433,226 $ 2,098,960 $ 2,095,233 $ 436,953 Accounts receivable 2,491-2,491 - Total Assets $ 435,717 $ 2,098,960 $ 2,097,724 $ 436,953 LIABILITIES Accounts payable $ 122,982 $ 1,227,887 $ 1,206,237 $ 144,632 Due to other governments 312, , , ,321 Total Liabilities $ 435,717 $ 1,613,940 $ 1,612,704 $ 436,953 III - 16

163 CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2013 TOTAL - ALL AGENCY FUNDS Balance Balance October 1, September 30, 2012 Additions Deletions 2013 ASSETS Cash $ 803,470 $ 7,857,941 $ 7,768,593 $ 892,818 Accounts receivable 2,521 17,836 19,163 1,194 Total Assets $ 805,991 $ 7,875,777 $ 7,787,756 $ 894,012 LIABILITIES Accounts payable $ 276,518 $ 2,704,922 $ 2,708,072 $ 273,368 Due to other governments 520,054 1,437,381 1,348, ,720 Due to individuals 9,419 12,848 10,343 11,924 Total Liabilities $ 805,991 $ 4,155,151 $ 4,067,130 $ 894,012 III - 17

164 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special-Purpose Financial Statements Performed in Accordance with Government Auditing Standards Honorable Barbara S. Butler Hendry County Clerk of the Circuit Court LaBelle, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Hendry County, Florida, Clerk of the Circuit Court, (the "Clerk") as of and for the fiscal year ended September 30, 2013, and the related notes to the special-purpose financial statements, which collectively comprise the Clerk's special-purpose financial statements, and have issued our report thereon dated June 17, Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Clerk'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 special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk s internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's specialpurpose 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. III-18

165

166 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Barbara S. Butler Clerk of the Circuit Court Hendry County, Florida We have audited the special-purpose financial statements of the Hendry County, Florida, Clerk of the Circuit Court (the Clerk ), as of and for the fiscal year ended September 30, 2013, and have issued our report thereon dated June 17, 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 of America. We have also issued our Independent Auditor's Report on Internal Control over Financial Reporting and Compliance and Other Matters. Disclosures in that report which is dated June 17, 2014, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter , Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor s reports or schedule: 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 recommendations made in the preceding annual financial audit report. Section (1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section , Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Hendry County, Florida, Clerk of the Circuit Court complied with Section , Florida Statutes. Section (1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. III-20

167

168 BARBARA S. BUTLER CLERK CIRCUIT COURT, HENDRY COUNTY P.O. BOX 1760 LABELLE, FLORIDA David W. Martin, CPA Auditor General P.O. Box 1735 Tallahassee, Florida Per Rule (1 ), this is our response to auditor's comments contained in the audit report for the fiscal year September 30, Report on Internal Accounting Controls Prior year comments and recommendations which continue to apply: None. Current year comments: None. Independent Auditors management letter Prior year comments and recommendations which continue to apply: None. Current year comments: None. If you should have any questions or comments regarding these responses, please contact me at (863) Sincerely, ~(J/~ Stephen W. Clark Finance Director Clerk of Circuit Court Hendry County, Florida III-22