HENDRY COUNTY, FLORIDA

Transcription

1 HENDRY COUNTY, FLORIDA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 PREPARED BY: BARBARA S. BUTLER CLERK OF THE CIRCUIT COURT STEVE CLARK FINANCE DIRECTOR

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3 TABLE OF CONTENTS SECTION I COMBINED STATEMENTS REPORT OF INDEPENDENT AUDITOR S 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 I-14 FUND FINANCIAL STATEMENTS Balance Sheet Governmental Funds I-15 I-16 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position I-17 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds I-18 I-19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Assets Governmental Funds I-20 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual General Fund I-21 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual County Transportation Trust Fund I-22 Statement of Revenues, Expenses and Changes in Fund Balances Budget and Actual Solid Waste Disposal Fund I-23 Statement of Net Position Proprietary Funds I-24 I-25 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Fund I-26 Statement of Cash Flows Proprietary Funds I-27 I-28 Statement of Fiduciary Assets and Liabilities Fiduciary Funds I-29 NOTES TO FINANCIAL STATEMENTS I-30 I-58 REQUIRED SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules Non-major Governmental Funds Combining Schedule Balance Sheet General Fund I-59 I-60 Combining Statement of Revenues, Expenditures and Changes in Fund Balance General Fund I-61 I-62 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund I-63 I-65 Combining Balance Sheet Non-major Governmental Funds I-66 I-71 Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-major Governmental Funds I-72 I-77 Combining Schedule Balance Sheet Fiduciary Funds I-78 Statement of Changes in Assets and Liabilities Fiduciary Funds I-79 I-80 FRS Pension Plan & HIS Pension Plan Supporting Schedules I-81 I-82

4 TABLE OF CONTENTS SECTION I COMBINED STATEMENTS, CONTINUED 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-83 I-84 REPORT OF INDEPENDENT AUDITOR S ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL AWARDS PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND CHAPTER , RULES OF THE AUDITOR GENERAL I-85 I-86 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE I-87 I-89 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE I-90 SCHEDULE OF FINDINGS AND QUESTIONED COSTS I-91 I-93 MANAGEMENT LETTER I-94 I-95 RESPONSE TO MANAGEMENT LETTER I-96 INDEPENDENT ACCOUNTANT S REPORT ON COMPLIANCE WITH LOCAL GOVERNMENT INVESTMENT POLICIES AND E911 REQUIREMENTS OF SECTIONS AND , FLORIDA STATUTES I-97 SECTION II CLERK OF THE CIRCUIT COURT REPORT OF INDEPENDENT AUDITOR S SPECIAL PURPOSE FINANCIAL STATEMENTS Balance Sheet Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Statement of Fiduciary Assets and Liabilities Agency Funds NOTES TO FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Combining Statement of Changes in Assets and Liabilities All Agency Funds II-1 II-3 II-4 II-5 II-6 II-7 II-14 II-15 II-16 II-18

5 TABLE OF CONTENTS SECTION II CLERK OF THE CIRCUIT COURT, CONTINUED 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 II-19 II-20 MANAGEMENT LETTER II-21 II-22 REPORT OF INDEPENDENT ACCOUNTANT ON COMPLIANCE WITH LOCAL GOVERNMENT INVESTMENT POLICIES, ARTICLE V REQUIREMENTS, REPORT OF INDEPENDENT ACCOUNTANT ON COMPLIANCE AND DEPOSITORY REQUIREMENTS OF SECTIONS , 28.35, AND , FLORIDA STATUTES II-23 RESPONSE TO MANAGEMENT LETTER II-24 SECTION III PROPERTY APPRAISER REPORT OF INDEPENDENT AUDITOR S SPECIAL PURPOSE FINANCIAL STATEMENTS Balance Sheet Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds NOTES TO FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund III-1 III-3 III-4 III-5 III-6 III-14 III-15 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 III-16 III-17 MANAGEMENT LETTER INDEPENDENT ACCOUNTANT S EXAMINATION REPORT RESPONSE TO MANAGEMENT LETTER III-18 III-19 III-20 III-21 SECTION IV SHERIFF REPORT OF INDEPENDENT AUDITOR S IV-1 IV-3

6 TABLE OF CONTENTS SECTION IV SHERIFF, CONTINUED SPECIAL PURPOSE FINANCIAL STATEMENTS Balance Sheet Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Statement of Fiduciary Assets & Liabilities Agency Funds NOTES TO FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Combining Statements Combining Balance Sheet Non-major Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance non-major Governmental Funds Combining Statement of Changes in Fiduciary Assets and Liabilities IV-4 IV-5 IV-6 IV-8 IV-9 IV-19 IV-20 IV-21 IV-22 IV-23 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 IV-27 IV-28 MANAGEMENT LETTER Appendix A Prior Year Findings and Recommendations INDEPENDENT ACCOUNTANT S EXAMINATION REPORT RESPONSE TO MANAGEMENT LETTER IV-29 IV-30 IV-31 IV-32 IV-33 SECTION V SUPERVISOR OF ELECTIONS REPORT OF INDEPENDENT AUDITOR S V-1 V-3 SPECIAL PURPOSE FINANCIAL STATEMENTS Balance Sheet Governmental Funds V-4 Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds V-5 NOTES TO FINANCIAL STATEMENTS V-6 V-12 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund V-13 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 V-14 V-15

7 TABLE OF CONTENTS SECTION V SUPERVISOR OF ELECTIONS, CONTINUED MANAGEMENT LETTER V-16 V-17 INDEPENDENT ACCOUNTANT S EXAMINATION REPORT V-18 RESPONSE TO MANAGEMENT LETTER V-19 SECTION VI TAX COLLECTOR REPORT OF INDEPENDENT AUDITOR S SPECIAL PURPOSE FINANCIAL STATEMENTS Balance Sheet Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Statement of Fiduciary Assets and Liabilities Agency Funds NOTES TO FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Combining Statements Combining Statement of Fiduciary Assets and Liabilities Agency Funds Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds VI-1 VI-3 VI-4 VI-5 VI-6 VI-7 VI-13 VI-14 VI-15 VI-16 VI-21 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 VI-22 VI-23 MANAGEMENT LETTER INDEPENDENT ACCOUNTANT S EXAMINATION REPORT RESPONSE TO MANAGEMENT LETTER VI-24 VI-25 VI-26 VI-27

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9 HENDRY COUNTY, FLORIDA COMBINED FINANCIAL STATEMENTS SEPTEMBER 30, 2015 INCLUDING BOARD OF COUNTY COMMISSIONERS, CONSTITUTIONAL OFFICERS, AND COMPONENT UNITS

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11 366 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, 2015, 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

12 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, 2015, 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. Emphasis of Matter As discussed in Note 12 to the basic financial statements, effective October 1, 2014, the County adopted Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement 68. Our opinions are not modified with respect to this matter. 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 I-2

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15 MANAGEMENT'S DISCUSSION & ANALYSIS

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17 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 2015 the County s assets exceeded its liabilities, resulting in net position of $70,397,546 a decrease of $15,188,247 over last year or (17.75) percent. Governmental and businesstype assets exceeded its liabilities by $51,940,973 and $18,456,573, respectively which was a decrease of ($14,122,063) for governmental assets, or (21.38) percent and decrease of ($1,065,884) for businesstype assets or, (5.46) percent. Total revenues for governmental activities were $46,613,867 which was an increase of $4,103,249 over prior year. Total expenses for governmental activities increased $105,656. Long-term liabilities are reported at $17,685,695 on September 30, 2015 for governmental activities and $9,067,845 for business-type activities. Increase in September 30, 2015 for governmental is associated with GASB 68 decreases in business type long-term liabilities were associated with the pay-off of several buildings and no additional debt service during the 2015 fiscal year. Capital Assets net of depreciation are reported at $75,857,819 on September 30, 2015 for all fund types. Government-Wide Financial Statements The government-wide financial statements (statement of net position 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 I - 4

18 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, and Solid Waste Disposal Fund which compares not only actual results to budget but also the original adopted budget to final budget. 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. Four of the County s governmental funds, the General Fund, County Transportation Trust Fund, Solid Waste Disposal 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 nonmajor 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 position for the primary government for fiscal years 2014 and 2015 with increases and decreases. I - 5

19 Hendry County, Florida Summary of Net Position with Prior Year Comparison September 30, 2015 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) 2015 Inc / (Dec) Current and other assets $ 24,603,591 $ 25,167,291 $ 563,700 $ 7,395,479 $ 7,105,159 $ (290,320) $ 32,272,450 $ 273,380 Capital Assets 54,933,017 54,043,745 (889,272) 22,676,875 $ 21,814,074 Related to pensions - 3,052,729 3,052,729-50,995 50,995 3,103,724 3,103,724 Total Assets 79,536,608 82,263,765 2,727,157 30,072,354 28,970,228 (1,102,126) 111,233,993 1,625,031 Other Liabilities 9,389,929 9,321,164 (68,765) 1,425,434 1,403,330 (22,104) 10,724,494 (90,869) Non-current Liabilities 4,083,643 17,685,695 13,602,052 9,124,163 9,067,845 (56,318) 26,753,540 13,545,734 Related to pensions - 3,315,933 3,315,933-42,480 42,480 3,358,413 3,358,413 Total liabilities 13,473,572 30,322,792 16,849,220 10,549,597 10,513,655 (35,942) 40,836,447 16,813,278 Net Position: Invested in capital assets, net of related debt 53,617,147 52,701,867 (915,280) 13,290,988 12,716,123 (574,865) 65,417,990 (1,490,145) Restricted 1,334,232 5,483,933 4,149, ,483,933 4,149,701 Unrestricted 11,111,657 (6,244,827) (17,356,484) 6,231,769 5,740,450 (491,319) (504,377) (17,847,803) Total Net Position $ 66,063,036 $ 51,940,973 $ (14,122,063) $ 19,522,757 $ 18,456,573 $ (1,066,184) $ 70,397,546 $ (15,188,247) Investment in capital assets, net of related debt is the largest portion of the net position. 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 $3,498,357 in 2015 represents a bonding requirement, capital project and disaster recovery requirements in The unrestricted net asset balance of $1,481,199 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 2015 was restricted assets for governmental activities. Governmental Activities Analysis The Governmental Revenue Accounts had an increase of percent from 2014 to The majority of this variance is due to an increase in Ad Valorem Taxes and intergovernmental revenues such as Capital Grants and Contributions. The increase in Ad Valorem Taxes is associated with a slight upward turn of our economy in Hendry County as well as the State. The increase in Grant income is associated with more State Airport and Road Projects. None of the remaining revenue accounts had material differences. Expenses decreased less than.25 percent in Taking into consideration increases in Salaries, Benefits and Medicaid costs this decrease is minimal. 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. I - 6

20 Business Activities Analysis The Port LaBelle Utility System had minimal changes in both revenues and expenses from 2014 to This is associated a minimal change in the customer base. The following schedule represents Summary of Revenue and Expenditures and Changes in Net position for the year September 30, Hendry County, Florida Summary of Revenues, Expenses and Changes in Net Position As of September 30, 2015 Governmental Governmental Business-type Business-type Activities Activities Activities Activities Total Revenues: Program Revenues: Charges for Service $ 9,228,749 $ 9,010,639 $ 1,432,246 $ 1,479,098 $ 10,489,737 Operating Grants and Contributions 580, , ,307 Capital Grants and Contributions 2,051,294 1,043, ,043,951 General Revenues: Taxes 20,868,685 22,526, ,526,015 Impact Fees Intergovernmental revenues, not restricted for specific purposes 8,004,501 11,192, ,192,540 Other 1,776,816 1,992,415 88,109 52,122 2,044,537 Total Revenues 42,510,618 46,613,867 1,520,355 1,531,220 48,145,087 Expenses: Program Activities: General Government 11,708,985 11,773, ,773,795 Court Related 1,575,315 1,524, ,524,446 Public Safety 17,839,642 17,924, ,924,877 Physical Environment 3,734,623 3,397, ,397,661 Transportation 7,616,233 7,763, ,763,753 Economic environment 787, , ,104 Human Services 2,025,297 2,125, ,125,481 Culture and recreation 965, , ,921 Interest on long-term debt 90,669 34, ,477 Business-type activities: Water and wastewater - - 2,345,770 2,352,838 2,352,838 46,344,171 46,238,515 2,345,770 2,352,838 48,591,353 Increase in net position (3,833,553) (14,122,063) (825,415) (1,066,184) (15,188,247) Net position October 1 69,896,589 66,063,036 20,348,172 19,522,757 85,585,793 Net position September 30 $ 66,063,036 $ 51,940,973 $ 19,522,757 $ 18,456,573 $ 70,397,546 I - 7

21 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 0% 24% 4% 20% 48% 2% 2% Charges for Service Operating Grants and Contributions Capital Grants and Contributions Taxes Impact Fees Intergovernmental revenues, not restricted for specific purposes Other I - 8

22 The following is a chart of expenses by program for governmental activities for fiscal year Expenses by Program - Govermental Activities 17% 2% 2% 5% 0% 25% 39% 3% 7% General Government Court Related Public Safety Physical Environment Transportation Economic environment Human Services Culture and recreation Interest on long-term debt 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 $1,479,098. This represents charges for water/sewer usage. Other revenues totaling $52,122 resulted from a special assessment, interest revenue and miscellaneous charges. All business type expenditures for fiscal year 2015 consisted of water and wastewater expenses to operate Port LaBelle Utility Systems and administrative fees. I - 9

23 Business Revenues 52,122 1,479,098 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 $75,857,819. This is a decrease of $1,752,043 over prior year. I - 10

24 Debt Administration At September 30, 2015, the County had $37,478,034 of total liabilities. Of this amount $26,753,540 consisted of non-current liabilities which mostly consists of bonds and notes payable of $9,067,845 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

25 BASIC FINANCIAL STATEMENTS

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27 HENDRY COUNTY, FLORIDA STATEMENT OF NET POSITION September 30, 2015 Primary Government Component Units ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Governmental Business-type Activities Activities Total Assets Cash and cash equivalents $ 11,851,600 $ 906,812 $ 12,758,412 $ 9,855 Investments, at fair value 4,196,474-4,196,474 - Prepaid expenses 22,983-22,983 - Receivables, net 9,096,234 3,368,943 12,465,177 - Inventory - 5,433 5,433 - Restricted assets: Investments, at fair value - 2,823,971 2,823,971 - Capital assets: Non-depreciable 7,853, ,006 8,390,205 - Depreciable, net 46,190,546 21,277,068 67,467,614 - Total assets 79,211,036 28,919, ,130,269 9,855 Deferred outflows of resources Related to pensions 3,052,729 50,995 3,103,724 - LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Accounts payable 5,882, ,213 6,760,142 - Accrued liabilities 761,490 31, ,758 - Other liabilities 2,180,719-2,180,719 - Liabilities payable from restricted assets: Current portion of long term debt 496, , ,470 - Customer deposits - 191, ,405 - Noncurrent liabilities: Due in more than one year 17,685,695 9,067,845 26,753,540 - Total liabilities 27,006,859 10,471,175 37,478,034 - Deferred inflows of resources Related to pensions 3,315,933 42,480 3,358,413 - Net position Invested in capital assets, net of related debt 52,701,867 12,716,123 65,417,990 - Restricted for: General government 483, ,933 - Disaster recovery 5,000,000-5,000,000 - Unrestricted (6,244,827) 5,740,450 (504,377) 9,855 Total net position $ 51,940,973 $ 18,456,573 $ 70,397,546 $ 9,855 The accompanying notes to the financial statements are an integral part of this statement. I-12

28 HENDRY COUNTY, FLORIDA STATEMENT OF ACTIVITIES September 30, 2015 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental Activities : General government $ 11,773,795 $ 3,428,028 $ - $ 753,850 Court related 1,524,446 1,058,894 81,491 - Public safety 17,924,877 1,418, ,854 - Physical environment 3,397, ,745 - Transportation 7,763,753 1,619, ,101 Economic environment 748,104 2, ,462 - Culture and recreation 945,921 7,944 18,752 - Human services 2,125,481 1,264,500 33,748 - Interest on long-term debt 34, Total governmental activities 46,238,515 9,010, ,307 1,043,951 Business-type Activities : Water and Wastewater 2,352,838 1,479, Total primary government $ 48,591,353 $ 10,489,737 $ 848,307 $ 1,043,951 General revenues : Property taxes Gasoline taxes Communications taxes Other taxes Intergovernmental revenues Interest income Miscellaneous Total general revenues Change in net position Net position, October 1, 2014 Restatement Net position, October 1, 2014, as restated Net position, September 30, 2015 The accompanying notes to the financial statements are an integral part of this statement. I-13

29 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-type Component Activities Activities Total Units $ (7,591,917) $ - $ (7,591,917) $ - (384,061) - (384,061) - (15,964,031) - (15,964,031) - (3,187,916) - (3,187,916) - (5,853,682) - (5,853,682) - (573,076) - (573,076) - (919,225) - (919,225) 15 (827,233) - (827,233) - (34,477) - (34,477) - (35,335,618) - (35,335,618) 15 - (873,740) (873,740) - (35,335,618) (873,740) (36,209,358) 15 14,813,496-14,813, , , , ,708-6,701,195-6,701,195-11,192,540-11,192, ,328 6, ,450-1,868,087 46,000 1,914,087-35,710,970 52,122 35,763, ,352 (821,618) (446,266) 15 66,063,036 19,522,757 85,585,793 9,840 (14,497,415) (244,566) (14,741,981) - 51,565,621 19,278,191 70,843,812 9,840 $ 51,940,973 $ 18,456,573 $ 70,397,546 $ 9,855 I-14

30 HENDRY COUNTY, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2015 County Solid Transportation Waste Capital General Trust Disposal Projects ASSETS Cash and cash equivalents $ 1,794,297 $ 3,145,149 $ 188,658 $ 491,714 Investments 4,196, Prepaid expenses 22, Receivables (net) 2,684,228 1,898,262 3,037, ,355 Total assets $ 8,697,982 $ 5,043,411 $ 3,226,582 $ 862,069 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 3,868,914 $ 857,380 $ 87,768 $ 12,598 Accrued liabilities 685,137 49,479 3,324 - Other liabilities 645, , Total liabilities 5,199,625 1,857,524 91,092 12,598 Fund balances Restricted Committed 5,000, Assigned - 3,185,887 3,135, ,471 Unassigned (1,501,643) Total fund balances 3,498,357 3,185,887 3,135, ,471 Total liabilities and fund balances $ 8,697,982 $ 5,043,411 $ 3,226,582 $ 862,069 The accompanying notes to the financial statements are an integral part of this statement. I-15

31 Other Governmental Funds Total Governmental Funds $ 6,231,782 $ 11,851,600-4,196,474-22,983 1,105,465 9,096,234 $ 7,337,247 $ 25,167,291 $ 1,056,269 $ 5,882,929 23, , ,480 2,180,719 1,664,299 8,825, , ,933-5,000,000 5,189,015 12,359,863 - (1,501,643) 5,672,948 16,342,153 $ 7,337,247 $ 25,167,291 I-16

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33 HENDRY COUNTY, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION September 30, 2015 Fund Balances - total governmental funds $ 16,342,153 Capital assets used in governmental activities are not financial resources and are therefore not reported in the governmental funds: Non-depreciable governmental capital assets $ 7,853,199 Depreciable governmental capital assets, net 46,190,546 54,043,745 Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds: Notes payable (747,745) Capital leases (594,133) Landfill closure (84,919) Other Post Employment Benefits (1,678,137) Net Pension liability (13,240,068) Deferred outflows related to pensions 3,052,729 Deferred inflows related to pensions (3,315,933) Compensated absences (1,836,719) (18,444,925) Net position of governmental activities $ 51,940,973 The accompanying notes to the financial statements are an integral part of this statement. I-17

34 HENDRY COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For the Year Ended September 30, 2015 County Solid Transportation Waste Capital General Trust Disposal Projects REVENUES Taxes $ 14,969,150 $ 1,148,810 $ 864,044 $ 2,415,835 Licenses and permits 404, Intergovernmental 5,942,562 4,775,643 90,909 - Charges for services 5,927, , ,745 - Fines and forfeitures Miscellaneous 299,512 41,964 46,208 54,758 Total revenues 27,543,251 6,368,475 1,210,906 2,470,593 EXPENDITURES Current General government 10,548, ,235 Court related 1,280, Public safety 15,519, Physical environment 432,942-1,868,547 - Transportation - 5,488, Economic environment 200, Culture and recreation 60, Human services 857, Capital outlay General government 233,556-10,801 57,975 Public safety 497, Physical environment Transportation - 349, Debt service Principal retirement 430, Interest and fiscal charges 17, Total expenditures 30,079,041 5,838,833 1,879, ,210 Excess (deficiencies) of revenues over (under) expenditures (2,535,790) 529,642 (668,442) 2,340,383 OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 653, Transfers in 15,706, Transfers out (13,184,427) - - (2,071,079) Total other financing sources (uses) 3,176, (2,071,079) Net change in fund balances 640, ,642 (668,442) 269,304 Fund balances, October 1, ,060,689 2,676,591 3,803, ,979 Restatements (202,954) (20,346) - (35,812) Fund balances, October 1, 2014, as restated 2,857,735 2,656,245 3,803, ,167 Fund balances, September 30, 2015 $ 3,498,357 $ 3,185,887 $ 3,135,490 $ 849,471 The accompanying notes to the financial statements are an integral part of this statement. I-18

35 Other Governmental Funds Total Governmental Funds $ 3,128,178 $ 22,526, ,448 1,532,062 12,341,176 3,214,878 9,754, , , ,588 1,229,030 9,020,642 46,613, ,044 11,070, ,459 1,520,138 1,589,889 17,109, ,607 3,174,096 1,843,808 7,332, , , , , ,908 1,056,194 1,358, , , , , , ,815 17,273 34,477 8,392,789 46,320, , , ,929-15,706,910 (451,404) (15,706,910) (451,404) 653, , ,575 5,543,944 15,701,135 (47,445) (306,557) 5,496,499 15,394,578 $ 5,672,948 $ 16,342,153 I-19

36 HENDRY COUNTY, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS For the Fiscal Year ended September 30, 2015 Net change in fund balances - total governmental funds: $ 947,575 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. (1,194,723) 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. Principal payments $ 626,815 Landfill Closure 40,702 Other post employment benefits (226,649) Proceeds from issuance of debt (653,929) (213,061) Some expenditures 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. The net changes associated with these expenses/expenditures are as follow: Change in compensated absences (158,582) Change in pension expenditures 994, ,561 Change in net position of governmental activities $ 375,352 The accompanying notes to the financial statements are an integral part of this statement. I-20

37 HENDRY COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND NON-GAAP BASIS For the Fiscal Year Ended September 30, 2015 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 15,442,436 $ 15,565,248 $ 14,969,150 $ (596,098) Licenses and permits 286, , ,413 28,598 Intergovernmental 5,099,100 5,577,851 5,942, ,711 Charges for services 5,620,101 5,921,915 5,927,614 5,699 Miscellaneous 297, , ,512 (430,481) Total revenues 26,744,937 28,170,822 27,543,251 (627,571) EXPENDITURES Current General government 10,805,611 10,647,332 10,548,890 98,442 Court related 1,335,021 1,280,866 1,280, Public safety 14,019,548 15,606,831 15,519,507 87,324 Physical environment 437, , ,942 19,134 Economic environment 337, , , ,115 Culture and recreation 67,196 67,197 60,476 6,721 Human services 811, , ,908 (45,922) Capital Outlay General government 33,500 42, ,556 (191,456) Transportation - 277, ,215 Public safety 190, , ,807 (12,180) Debt service Principal retirement 126, , ,508 5,979 Interest and fiscal charges 7,153 7,153 55,679 (48,526) Contingency 50,000 31,844 6,019 25,825 Total expenditures 28,221,053 30,072,185 29,702, ,858 Deficiencies of revenues under expenditures (1,476,116) (1,901,363) (2,159,076) (257,713) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt - 277, ,215 - Transfers in 15,727,278 15,773,638 15,706,910 (66,728) Transfers out (13,127,472) (13,194,336) (13,184,427) 9,909 Total other financing sources (uses) 2,599,806 2,856,517 2,799,698 (56,819) Net change in fund balances 1,123, , ,622 (314,532) Fund balances - October 1, 2014, as restated (1,123,690) (955,154) 2,857,735 3,812,889 Fund balances - September 30, 2015 $ - $ - $ 3,498,357 $ 3,498,357 The accompanying notes to the financial statements are an integral part of this statement. I-21

38 HENDRY COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL COUNTY TRANSPORTATION TRUST For the Fiscal Year Ended September 30, 2015 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 1,113,529 $ 1,113,529 $ 1,148,810 $ 35,281 Intergovernmental 14,507,723 14,507,726 4,775,643 (9,732,083) Charges for services 400, , ,058 (942) Miscellaneous 11,700 11,700 41,964 30,264 Total revenues 16,032,952 16,035,955 6,368,475 (9,667,480) EXPENDITURES Current Transportation 9,134,151 9,725,418 5,488,956 4,236,462 Capital outlay Transportation 7,991,409 7,403, ,877 7,053,265 Total expenditures 17,125,560 17,128,560 5,838,833 11,289,727 Excess (deficiencies) of revenues over (under) expenditures (1,092,608) (1,092,605) 529,642 1,622,247 OTHER FINANCING SOURCES Transfers in 21,719 21,719 - (21,719) Total other financing sources 21,719 21,719 - (21,719) Net change in fund balance (1,070,889) (1,070,886) 529,642 1,600,528 Fund balance - October 1, ,070,889 1,070,886 2,676,591 1,605,705 Restatements - - (20,346) (20,346) Fund balance - October 1, 2014, as restated 1,070,889 1,070,886 2,656,245 1,585,359 Fund balance - September 30, 2015 $ - $ - $ 3,185,887 $ 3,185,887 The accompanying notes to the financial statements are an integral part of this statement. I-22

39 HENDRY COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SOLID WASTE DISPOSAL For the Fiscal Year Ended September 30, 2015 Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Positive (Negative) REVENUES Taxes $ 879,425 $ 879,425 $ 864,044 $ (15,381) Intergovernmental 90,909 90,909 90,909 - Charges for services 93,960 93, , ,785 Miscellaneous 34,828 39,802 46,208 6,406 Total revenues 1,099,122 1,104,096 1,210, ,810 EXPENDITURES Current Physical environment 1,960,488 1,961,488 1,868,547 92,941 Capital outlay Physical environment 275, ,000 10, ,199 Total expenditures 2,235,488 2,235,488 1,879, ,140 Excess (deficiencies) of revenues over (under) expenditures (1,136,366) (1,131,392) (668,442) 462,950 Fund balance - October 1, ,136,366 1,131,392 3,803,932 2,672,540 Fund balance - September 30, 2015 $ - $ - $ 3,135,490 $ 3,135,490 The accompanying notes to the financial statements are an integral part of this statement. I-23

40 HENDRY COUNTY, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUND For the Fiscal Year Ended September 30, 2015 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Business-type Activities Enterprise Fund Port Labelle Utility System Assets Current Assets Cash and cash equivalents $ 906,812 Receivables (net) 3,368,943 Inventory 5,433 Restricted Assets: Investments at fair value 2,823,971 Total current assets 7,105,159 Noncurrent Assets Capital Assets Non-depreciable 537,006 Depreciable 29,252,677 Less: accumulated depreciation (7,975,609) Total noncurrent assets 21,814,074 Total assets 28,919,233 Deferred outflows of resources Related to pensions 50,995 The accompanying notes to the financial statements are an integral part of this statement. I-24

41 HENDRY COUNTY, FLORIDA STATEMENT OF NET POSITION - Continued PROPRIETARY FUND For the Fiscal Year Ended September 30, 2015 Business-type Activities Enterprise Fund Port Labelle Utility System LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current liabilities Accounts payable 877,213 Accrued liabilities 31,268 Total current liabilities 908,481 Current liabilities payable from restricted assets Notes payable 145,344 Bonds payable 158,100 Customer deposits 191,405 Total current liabilities payable from restricted assets 494,849 Noncurrent liabilities Accrued compensated absences 27,626 Notes payable 2,148,707 Bonds payable 6,645,800 Net pension liability 245,712 Total noncurrent liabilities 9,067,845 Total liabilities 10,471,175 Deferred inflows of resources Related to pensions 42,480 Net position Invested in capital assets, net of related debt 12,716,123 Unrestricted 5,740,450 Total net position $ 18,456,573 I-25

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43 HENDRY COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUND For the Fiscal Year Ended September 30, 2015 Business-type Activities Enterprise Fund Port Labelle Utility System OPERATING REVENUES Charges for services $ 1,479,098 Miscellaneous 46,000 Total operating revenues 1,525,098 OPERATING EXPENSES Personal services 356,726 Contractual services 89,311 Repairs and maintenance 99,600 Depreciation and amortization 966,131 Office 18,775 Supplies 36,537 Utilities 118,083 Other expense 179,167 Total operating expenses 1,864,330 Operating income (loss) (339,232) NON-OPERATING REVENUES (EXPENSES) Interest revenue 6,122 Interest and fiscal charges (488,508) Total non-operating (expenses) (482,386) Change in net position (821,618) Total net position, October 1, 2014, as restated 19,278,191 Total net position, September 30, 2015 $ 18,456,573 The accompanying notes to the financial statements are an integral part of this statement. I-26

44 HENDRY COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Fiscal Year Ended September 30, 2015 Business-type Activities Enterprise Funds Port LaBelle Utility System CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 1,892,922 Cash payments to suppliers for goods and services (605,209) Cash payments to employees for services (357,408) Net cash provided by operating activities 930,305 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Deposits collected from customers less deposits refunded to customers (105,457) Net cash used in noncapital financing activities (105,457) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal paid on notes payable and revenue bonds (287,936) Interest paid on notes payable and revenue bonds (488,508) Net cash used in capital financing activities (776,444) CASH FLOWS FROM INVESTING ACTIVITIES: Interest on investments 6,122 Net cash provided by investing activities 6,122 Net increase in cash and cash equivalents 54,526 Cash and cash equivalents on October 1, ,286 Cash and cash equivalents on September 30, 2015 $ 906,812 The accompanying notes to the financial statements are an integral part of this statement. I-27

45 Business-type Activities Enterprise Funds Port LaBelle Utility System Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ (339,232) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 966,131 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 351,257 Increase (decrease) in: Accounts payable (47,169) Accrued liabilities (682) Total adjustments 1,269,537 Net cash provided by operating activities $ 930,305 I-28

46 HENDRY COUNTY, FLORIDA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS As of September 30, 2015 Agency Funds ASSETS Cash and cash equivalents $ 3,544,076 Receivables (net) 2,944 Total assets $ 3,547,020 LIABILITIES Accounts payable 73,543 Due to other constitutional officers 37,335 Due to other governments 624,271 Due to individuals 2,263,587 Due to other funds 65,322 Deposits 482,962 Total liabilities $ 3,547,020 The accompanying notes to the financial statements are an integral part of this statement. I-29

47 NOTES TO THE BASIC FINANCIAL STATEMENTS

48 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 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. Blended component units are legally separate entities that are in substance part of the County s operation, as they either have governing bodies that are substantively the same as the Board and there is a financial benefit or burden relationship between the Board and the component unit, or they provide their services exclusively or almost exclusively to the County government. The financial transactions of these component units are merged in with transactions of the County as part of the primary government. The blended component units of the County are as follows: East Hendry County Drainage District The District maintains the canals, ditches and storm water treatment areas located in East Hendry County. By Petition of the Hendry County Board of County Commissioners, pursuant to the provisions of Laws of Florida, Chapter , the creation of the East Hendry County Drainage District was approved by court order on October 9, Hendry County Industrial Development Authority The 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. I-30

49 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Discretely-presented component units are legally separate entities which do not meet the criteria for blending. They are reported in separate columns to emphasize that they are legally separate from the County. The discrete component unit of the County is as follows: Hendry Soil and Water Conservation District The District was created under general law on May 29, 1944, by a petition of the State Soil Conservation Board. The District was organized in accordance with Florida Statutes, Chapter 582. The District is governed by an elected board of five individuals from Hendry County. The professional staff of the District are employees of the U.S. Department of Agriculture, while clerical and other operating expenses are provided by the Hendry County Board of County Commissioners. 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. I-31

50 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 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-balancingaccounts 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. 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. I-32

51 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 Capital Projects Fund Non-major Governmental Funds Budgets and Budgetary Accounting (1) The Solid Waste Disposal Fund is used to account for the activities related to the solid waste disposal program. The Capital Projects Fund accounts for revenues received from the infrastructure surtax. The non-major governmental funds are a combination of special revenue, debt service, and capital projects funds. Chapters 129 and 200 of the Florida Statutes govern the preparation, adoption and administration of the County 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 County in establishing the operating budget: 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. I-33

52 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (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 the Hendry County Sheriff's General Fund is adopted on a basis inconsistent with accounting principles generally accepted in the United States of America. The Sheriff did not include in the budget, amounts borrowed and expended for the lease of vehicles in the amount of $376,714, as it was a noncash transaction that did not require additional transfers-in from the Hendry County Board of County Commissioners. 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. 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. I-34

53 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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 Deferred Outflows/Inflows of Resources Deferred outflows of resources represent a consumption of net position that applies to a future period and therefore will not be recognized as expended until then. The District presents deferred outflows associated with pensions to be expensed over future periods. I-35

54 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred inflows of resources are reported in governmental activities to offset receivables and deposits that do not meet the availability criterion under the modified accrual basis of accounting. The District presents amounts associated with pensions as deferred inflows of resources. 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. 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. I-36

55 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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 2015 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 I-37

56 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 3 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Deficit fund balances The Court Technology Fund has a deficit fund balance of $4,718. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. The East Hendry County Fire District has a deficit fund balance of $328,624. 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 $73,589. It is anticipated that the deficit will be resolved in the next fiscal year through an adjustment. NOTE 4 - CASH, CASH EQUIVALENTS, AND INVESTMENTS (CONTINUED) 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. 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, $21,919,182, 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, 2015, receivables were as follows: Enterprise: Labelle Utility Accounts receivable $ 3,368,943 Less: allowance for bad debt - Total receivables $ 3,368,943 I-38

57 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 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. Restricted assets reported on the proprietary fund statement of net position at September 30, 2015, were as follows: Port LaBelle Utility Restricted cash and investments $ 2,823,969 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, 2015 comprised of the following: Port LaBelle Utility Current portion of long-term debt $ 303,444 Customer deposits 191,405 Total $ 494,849 (Remainder of this page intentionally left blank) I-39

58 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 8 - CAPITAL ASSETS During the year ended September 30, 2015, the following changes in capital assets occurred: Beginning Ending Balance Balance Governmental Activites 10/01/2014 Increases Decreases 09/30/2015 Capital Assets not being depreciated: Land $ 6,682,616 $ 22,006 $ - $ 6,704,622 Construction in progress - 1,148,577-1,148,577 Total capital assets not being depreciated 6,682,616 1,170,583-7,853,199 Capital assets being depreciated: Buildings and improvements 71,869,421 1,533,301-73,402,722 Furniture and equipment 29,818, ,577 (705,898) 29,680,587 Infrastructure 54,433, ,433,754 Total capital assets being depreciated 156,122,083 2,100,878 (705,898) 157,517,063 Less accumulated depreciation for: Buildings and improvements (30,581,889) (2,128,934) - (32,710,823) Furniture and equipment (22,856,039) (1,809,566) 483,665 (24,181,940) Infrastructure (54,433,754) - - (54,433,754) Total accumulated depreciation (107,871,682) (3,938,500) 483,665 (111,326,517) Total capital assets being depreciated, net 48,250,401 (1,837,622) (222,233) 46,190,546 Total governmental activities capital assets, net $ 54,933,017 $ (667,039) $ (222,233) $ 54,043,745 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, ,330-29,117,920 Furniture and equipment 182,550 - (47,782) 134,768 Total capital assets being depreciated 29,197, ,330 (47,782) 29,252,688 Less accumulated depreciation for: Buildings & Infrstructure (6,867,496) (966,131) - (7,833,627) Furniture and equipment (189,775) - 47,782 (141,993) Total accumulated depreciation (7,057,271) (966,131) 47,782 (7,975,620) Total capital assets being depreciated, net 22,139,869 (862,801) - 21,277,068 Total business-type activities capital assets, net $ 22,676,875 $ (862,801) $ - $ 21,814,074 I-40

59 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 8 - CAPITAL ASSETS (CONTINUED) Depreciation costs were charged to functions/ programs as follows: Governmental activities: General government $ 873,625 Court related 30,553 Public safety 1,080,768 Physical environment 208,113 Transportation 401,200 Economic environment 88,981 Culture and recreation 75,296 Human services 1,179,964 Total depreciation cost for governmental activities $ 3,938,500 Business-type activities: Water and wastewater depreciation cost $ 966,131 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 $ 1,177,921 1,116,130 Total business type - notes payable 2,294,051 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, $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, ,441,900 3,362,000 Total business-type - revenue bonds 6,803,900 Total Business-Type - Notes Payable & Revenue Bonds 9,097,951 I-41

60 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 9 - LONG-TERM DEBT (CONTINUED) 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 ,881 $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 ,108 $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, ,571 $79,926 bank loan for the purchase of a new EMS rescue truck, bearing interest at a rate of 2.875%, with equal annual payments of $17,427. Final payment due July $140,000 bank loan for the purchase of a new EMS rescue truck, bearing interest at a rate of 2.85%, with equal annual payments of $37,529. Final payment due March , ,000 $140,000 bank loan for the purchase of a new EMS rescue truck, bearing interest at a rate of 2.85%, with equal annual payments of $37,529. Final payment due July ,340 Total governmental - notes payable 747,745 Capital Leases 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, 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, ,186 94,027 On January 7, 2015 the Sheriff entered into a leasing agreement for one 2015 Ford Interceptor SUV for $51,293 bearing interest at a rate of 6.50%, requiring quarterly payments of $3,666. Final payment due January 7, ,581 On January 23, 2015 the Sheriff entered into a leasing agreement for van for the jail for $36,649 bearing interest at a rate of 6.50%, requiring quarterly payments of $2,620. Final payment due January 23, ,567 I-42

61 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 9 - LONG-TERM DEBT (CONTINUED) Government Funds - Notes Payable, Capital Leases & Other Payables (Continued) On January 7, 2015 the Sheriff entered into a leasing agreement for eight police interceptor sedans for $324,959 bearing interest at a rate of 6.50%, requiring quarterly payments of $23,228. Final payment due January 7, Total governmental - capital leases 288, ,133 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 2 years remaining. 84,919 Total governmental - other payables 84,919 Total Government Funds Long-Term Debt 1,426,797 TOTAL LONG-TERM DEBT $ 10,524,748 The annual debt service requirements at September 30, 2015, were as follows: Government Funds Business-type Long-Term Debt Long-Term Debt Total Fiscal Year(s) Principal Interest Principal Interest Principal Interest 2016 $ 496,026 $ 64,206 $ 303,444 $ 474,631 $ 799,470 $ 538, ,029 47, , , , , ,373 17, , , , , ,369 4, , , , , , , , , ,271,419 1,626,386 2,271,419 1,626, ,671, ,538 1,671, , ,747, ,143 1,747, , , , , , ,021, ,444 1,021, ,444 Total $ 1,426,797 $ 133,644 $ 9,097,951 $ 5,880,597 $ 10,524,748 $ 6,014,241 I-43

62 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 9 - LONG-TERM DEBT (CONTINUED) 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. Changes in bonded and other indebtedness of the Board for the year ended September 30, 2015, was as follows: Beginning Ending Balance Balance Due Within 10/1/2014 Additions Reductions 9/30/2015 One Year Governmental Activities Notes payable $ 802,205 $ 277,215 $ (331,675) $ 747,745 $ 243,430 Capital Leases 513, ,901 (332,433) 594, ,136 Landfill Closure 125,621 - (40,702) 84,919 42,460 Other Post Employment Benefits 1,451, ,649-1,678,137 - FRS Pension liability 3,850,510 4,658,523-8,509,033 - HIS Pension liability 4,268, ,374-4,731,035 - Compensated absences 1,678, ,582-1,836,719 - Total governmental activities long-term liabilities $ 12,690,287 $ 6,196,244 $ (704,810) $ 18,181,721 $ 496,026 Business-Type Activities Port LaBelle Utility Systems Notes payable $ 2,429,887 $ - $ (135,836) $ 2,294,051 $ 145,344 Revenue bonds 6,956,000 - (152,100) 6,803, ,100 FRS Pension liability 66,517 81, ,396 - HIS Pension liability 88,294 9,022-97,316 - Compensated absences 26,211 1,415-27,626 - Total business-type activities long-term liabilities $ 9,566,909 $ 92,316 $ (287,936) $ 9,371,289 $ 303,444 I-44

63 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 10 - LANDFILL CLOSURE AND POSTCLOSURE CARE 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 $40,702 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. 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 Florida Retirement System: General Information - All of the employees of the primary government participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ( Pension Plan ) and the Retiree Health Insurance Subsidy ( HIS Plan ). I-45

64 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) Under Section , Florida Statutes, the FRS also provides a defined contribution plan ( Investment Plan ) alternative to the FRS Pension Plan, which is administered by the State Board of Administration ( SBA ). As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida , or from the Web site: Pension Plan Plan Description The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program ( DROP ) for eligible employees. Benefits Provided - Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. I-46

65 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section , Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of- living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of three percent determined by dividing the sum of the prejuly 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Contributions Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015, respectively, were as follows: Regular--7.37% and 7.26%; Special Risk Administrative Support % and 32.95%; Special Risk % and 22.04%; Senior Management Service % and 21.43%; Elected Officers % and 42.27%; and DROP participants % and 12.88%. These employer contribution rates include 1.26% and 1.66% HIS Plan subsidy for the periods October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015, respectively. The County s contributions to the Pension Plan totaled $1,877,742 for the fiscal year ended September 30, Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At September 30, 2015, the County reported a liability of $8,657,429 for its proportionate share of the Pension Plan s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, The County s proportionate share of the net pension liability was based on the County s fiscal year contributions relative to the fiscal year contributions of all participating members. At June 30, 2015, the County's proportionate share was %, which was a decrease of % from its proportionate share measured as of June 30, I-47

66 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) For the fiscal year ended September 30, 2015, the County recognized pension expense of $390,314, excluding HIS. In addition the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 913,968 $ (205,328) Change of assumptions 574,623 - Net difference between projected and actual earnings on Pension Plan investments - (2,067,249) Changes in proportion and differences between County Pension Plan contributions and proportionate share of contributions 630,986 (953,878) County Pension Plan contributions subsequent to the measurement date 462,463 - Total $ 2,582,040 $ (3,226,455) The deferred outflows of resources related to the Pension Plan, totaling $462,463 resulting from County contributions to the Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows: Fiscal Year Ending September 30: Thereafter $ Amount (776,252) (776,252) (776,252) 929, ,833 72,752 I-48

67 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) Actuarial Assumptions The total pension liability in the July 1, 2015 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Inflation 2.60% Salary increases 3.25%, average, including inflation Investment rate of return 7.65%, net of pension plan investment expense, including inflation Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, The long-term expected rate of return on Pension Plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation (1) Annual Arithmetic Return Compound Annual (Geometric) Return Standard Deviation Cash 1.0% 3.2% 3.1% 1.7% Fixed income 18.0% 4.8% 4.7% 4.7% Global equity 53.0% 8.5% 7.2% 17.7% Real estate (property) 10.0% 6.8% 6.2% 12.0% Private equity 6.0% 11.9% 8.2% 30.0% Strategic investments 12.0% 6.7% 6.1% 11.4% Total 100.0% Assumed Inflation - Mean 2.6% 1.9% (1) As outlined in the Pension Plan's investment policy Discount Rate - The discount rate used to measure the total pension liability was 7.65%. The Pension Plan s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation of the total pension liability is equal to the long-term expected rate of return. I-49

68 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) Sensitivity of the County s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following represents the County s proportionate share of the net pension liability calculated using the discount rate of 7.65%, as well as what the County s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65%) or one percentage point higher (8.65%) than the current rate: 1%, Decrease (6.65%) Discount Rate (7.65%) 1% Increase (8.65%) County's proportionate share of the net pension liability/(asset) $ 22,433,359 $ 8,657,430 $ (2,806,406) Pension Plan Fiduciary Net Position - Detailed information regarding the Pension Plan s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan - At September 30, 2015, the County reported no amounts payable for outstanding contributions to the Pension Plan. HIS Plan Plan Description The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan established under Section , Florida Statutes, and may be amended by the Florida legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Benefits Provided For the fiscal year ended September 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month. To be eligible to receive these benefits, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended September 30, 2015, the HIS contribution for the period October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015 was 1.26% and 1.66%, respectively. The County contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. I-50

69 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or cancelled. The County s contributions to the HIS Plan totaled $196,216 for the fiscal year ended September 30, Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At September 30, 2015, the County reported a liability of $4,828,351 for its proportionate share of the HIS Plan s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, The County s proportionate share of the net pension liability was based on the County s fiscal year contributions relative to the fiscal year contributions of all participating members. At June 30, 2015, the County's proportionate share was %, which was an decrease of % from its proportionate share measured as of June 30, For the fiscal year ended September 30, 2015, the County recognized HIS expense of $345,788. In addition the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Change of assumptions $ 379,865 $ - Net difference between projected and actual earnings on HIS Plan investments 2,614 - Changes in proportion and differences between County HIS Plan contributions and proportionate share of contributions 76,393 (131,958) County HIS Plan contributions subsequent to the measurement date 62,812 - Total $ 521,684 $ (131,958) The deferred outflows of resources related to the HIS Plan, totaling $62,812 resulting from County contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, Other amounts reported as deferred outflows I-51

70 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows: Fiscal Year Ending September 30: Thereafter $ Amount 53,671 53,671 53,671 53,139 52,884 59,878 Actuarial Assumptions The total pension liability in the July 1, 2015 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Inflation 2.60% Salary increases 3.25%, average, including inflation Municipal bond rate 3.80% Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, Discount Rate - The discount rate used to measure the total pension liability was 3.80%. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of the County s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following represents the County s proportionate share of the net pension liability calculated using the discount rate of 3.80%, as well as what the County s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (2.80%) or one percentage point higher (4.80%) than the current rate: 1%, Decrease (2.80%) Discount Rate (3.80%) 1% Increase (4.80%) County's proportionate share of the net pension liability $ 5,501,681 $ 4,828,351 $ 4,266,895 I-52

71 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) HIS Plan Fiduciary Net Position - Detailed information regarding the HIS Plan s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report. Payables to the HIS Plan - At September 30, 2015, the County reported no amounts payable for outstanding contributions to the HIS Plan. Investment Plan The SBA administers the defined contribution plan officially titled the FRS Investment Plan. The Investment Plan is reported in the SBA s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. As provided in Section , Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. Board employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the Pension Plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of plan members. Allocations to the investment member's accounts during the fiscal year, as established by Section , Florida Statutes, are based on a percentage of gross compensation, by class, as follows: Regular class %, Special Risk Administrative Support class--7.95%, Special Risk class %, Senior Management Service class--7.67% and County Elected Officers class %. For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the Pension Plan is transferred to the Investment Plan, the member must have the years of service required for Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five-year period, the employee will regain control over their account. If the employee does not return within the five-year period, the employee will forfeit the accumulated account balance. For the fiscal year ended September 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the Board. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds I-53

72 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 12 - RETIREMENT PLAN (CONTINUED) invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The County s Investment Plan pension expense totaled $367,898 for the fiscal year ended September 30, Hendry Soil and Water Conservation District Defined Beneift Pension Plan: The Hendry Soil and Water Conservation District (District), a discretely presented component unit of the County, participates in the cost-sharing, multiple employer defined benefit pension plans administered by the Florida Retirement System (FRS). Further information on the effect of participation in the FRS plans is included in the Authority s Annual Financial Report and can be obtained from the District. 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. I-54

73 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) 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, 2015, membership consisted of: Active Employees 317 Retired Participants 14 Covered Spouses 1 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, 2014 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 $331,911 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. (Remainder of this page intentionally left blank) I-55

74 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 14 - OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) 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) $ 360,507 Interest on Net OPEB Obligation 58,060 Adjustment to Annual Required Contribution (86,656) Annual OPEB Cost 331,911 Contributions Made (86,254) Increase in Net OPEB Obligation 245,657 Beginning, Net OPEB Obligation, 10/01/2014 1,451,488 Ending, Net OPEB Obligation, 9/30/2015 $ 1,697,145 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, 2015 $ 331, % $ 1,697,145 September 30, 2014 $ 352, % $ 1,451,488 September 30, 2013 $ 346, % $ 1,159,804 The net OPEB obligation is reflected in the government-wide financial statements. The funded status of the plan as of September 30, 2015 was as follows: Actuarial Accrued Liability (AAL) $ 2,325,427 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 2,325,427 Covered Payroll $ 11,592,700 Ration of UAAL to Covered Payroll 20.1% (Remainder of this page intentionally left blank) I-56

75 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 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, $ 82,283 Total operating leases $ 82,283 The annual commitments requirement for operating leases at September 30, 2015, were as follows: Operating Lease - Commitments Fiscal Year(s) Principal Interest Total 2016 $ 41,891 $ 7,821 $ 49, ,392 7,610 48,002 Total $ 82,283 $ 15,431 $ 97,714 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. NOTE 16 - RESTATEMENTS The October 1, 2014 fund balance of the Board of County Commissioners general fund has been restated, with a decrease of $202,954 under what was reported at September 30, In Fiscal Years 2013 and 2014, certain revenue amounts were recorded as receivable. During the 2015 fiscal year, it was determined that these receivables are no longer collectable. The effect on Fiscal Year 2014 would have been a reduction of revenue, an increase in expenditure, and a decrease in Accounts Receivable in the amount of $202,954. The October 1, 2014 fund balance of the County Transportation Trust special revenue fund has been restated, with a decrease of $20,346 under what was reported at September 30, In Fiscal Years 2013 and 2014, certain revenue amounts were recorded as receivable. I-57

76 HENDRY COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS September 30, 2015 NOTE 16 - RESTATEMENTS (CONTINUED) During the 2015 fiscal year, it was determined that these receivables are no longer collectable. The effect on Fiscal Year 2014 would have been a reduction of revenue, an increase in expenditure, and a decrease in Accounts Receivable in the amount of $20,346. The October 1, 2014 fund balance of the Board of non-major special revenue funds have been restated, with a decrease of $83,257 under what was reported at September 30, In Fiscal Years 2013 and 2014, certain revenue amounts were recorded as receivable. During the 2015 fiscal year, it was determined that these receivables are no longer collectable. The effect on Fiscal Year 2014 would have been a reduction of revenue, an increase in expenditure, and a decrease in Accounts Receivable in the amount of $83,257. The October 1, 2014 net positions of the County s Governmental Activities and Businesstype Activities have been adjusted downward by $14,497,415 and $244,566, respectively, to provide for the beginning balances of net pension liability and related deferred outflows and deferred inflows recorded in accordance with GASB Statements No. 68 and 71. I-58

77 REQUIRED SUPPLEMENTARY INFORMATION

78 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING SCHEDULE - BALANCE SHEET GENERAL FUND As of September 30, 2015 Board of County Clerk of Property Commissioners Circuit Court Appraiser Sheriff ASSETS Cash and cash equivalents $ 717,917 $ 247,706 $ 48,514 $ 655,404 Investments 4,196, Prepaid expenses - 3, Receivables, net 2,480,561 87,068-65,100 Total assets $ 7,394,952 $ 337,826 $ 48,514 $ 720,504 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 3,762,320 $ 375 $ - $ 88,758 Accrued liabilities 74,270 19,085 7, ,382 Other liabilities 60, ,366 41,233 71,364 Total liabilities 3,896, ,826 48, ,504 Fund balances Committed 5,000, Unassigned (1,501,643) Total fund balances 3,498, Total liabilities and fund balances $ 7,394,952 $ 337,826 $ 48,514 $ 720,504 I-59

79 Supervisor Tax of Elections Collector Total $ 2,744 $ 122,012 $ 1,794, ,196,474 19,931-22,983-51,499 2,684,228 $ 22,675 $ 173,511 $ 8,697,982 $ - $ 17,461 $ 3,868,914-24, ,137 22, , ,574 22, ,511 5,199, ,000, (1,501,643) - - 3,498,357 $ 22,675 $ 173,511 $ 8,697,982 I-60

80 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GENERAL FUND As of September 30, 2015 Board of County Clerk of Property Commissioners Circuit Court Appraiser Sheriff REVENUES Taxes $ 14,969,150 $ - $ - $ - Licenses and permits 404, Intergovernmental 5,544,234 81, ,837 Charges for services 1,747,820 1,058,894 1,228, ,730 Miscellaneous 233,898 10, ,712 Total revenues 22,899,515 1,151,252 1,229, ,279 EXPENDITURES Current General government 6,542, ,145 1,187,881 - Court related - 1,034, ,348 Public safety 4,397, ,121,624 Physical environment 432, Economic environment 200, Culture and recreation 60, Human services 857, Capital outlay General government 224, Public safety ,521 Transportation Debt service Principal retirement 55, ,323 Interest and fiscal charges 6, ,185 Total expenditures 12,778,518 1,998,476 1,187,881 12,251,001 Excess (deficiencies) of revenues over (under) expenditures 10,120,997 (847,224) 41,233 (11,547,722) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 277, ,714 Transfers in 3,012,483 1,042,417-11,194,330 Transfers out (12,770,073) (195,193) (41,233) (23,322) Total other financing sources (uses) (9,480,375) 847,224 (41,233) 11,547,722 Net change in fund balances 640, Fund balances - October 1, ,060, Restatements (202,954) Fund balances - October 1, 2014, as restated 2,857, Fund balances - September 30, 2015 $ 3,498,357 $ - $ - $ - I-61

81 Supervisor Tax of Elections Collector Total $ - $ - $ 14,969, , ,942,562-1,550,687 5,927,614 5,300 4, ,512 5,300 1,554,791 27,543, ,305 1,414,263 10,548, ,280, ,519, , , , ,908-8, , , , , ,305 1,422,860 30,079,041 (435,005) 131,931 (2,535,790) , ,680-15,706,910 (22,675) (131,931) (13,184,427) 435,005 (131,931) 3,176, , ,060, (202,954) - - 2,857,735 $ - $ - $ 3,498,357 I-62

82 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND, NON-GAAP BASIS As of September 30, 2015 Board of County Commissioners Clerk of Circuit Court Budget Actual Budget Actual REVENUES Taxes $ 15,565,248 $ 14,969,150 $ - $ - Licenses and permits 375, , Intergovernmental 5,225,805 5,544,234-81,491 Charges for services 1,838,500 1,747,820 1,034,519 1,058,894 Miscellaneous 685, ,898-10,867 Total revenues 23,690,666 22,899,515 1,034,519 1,151,252 EXPENDITURES Current General government 6,413,051 6,542,296 1,042, ,145 Court related - - 1,034,519 1,034,331 Public safety 4,432,396 4,397, Physical environment 452, , Economic environment 347, , Culture and recreation 67,197 60, Human services 811, , Capital outlay General government 33, , Transportation 277, Public safety Debt Service Principal retirement 55, Interest and fiscal charges 7,153 55, Contingency - 6, Total expenditures 12,897,693 12,778,518 2,076,936 1,998,476 Excess (deficiencies) of revenues over (under) expenditures 10,792,973 10,120,997 (1,042,417) (847,224) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 277, , Transfers in 3,079,302 3,012,483 1,042,417 1,042,417 Transfers out (13,194,336) (12,770,073) - (195,193) Total other financing sources (uses) (9,837,819) (9,480,375) 1,042, ,224 Net change in fund balances 955, , Fund balances - October 1, 2014, as restated (955,154) 2,857, Fund balances - September 30, 2015 $ - $ 3,498,357 $ - $ - I-63

83 Property Appraiser Sheriff Supervisor of Elections Budget Actual Budget Actual Budget Actual $ - $ - $ - $ - $ - $ , , ,228,483 1,228, , , ,695 44,712-5,300 1,228,483 1,229, , ,279-5,300 1,228,483 1,187, , , , , ,174,435 11,121, , , , , , ,228,483 1,187,881 11,897,092 11,874, , ,305-41,233 (11,194,330) (11,171,008) (457,589) (435,005) ,194,330 11,194, , ,680 - (41,233) - (23,322) - (22,675) - (41,233) 11,194,330 11,171, , , $ - $ - $ - $ - $ - $ - I-64

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85 Total Tax Collector Variance - Positive Budget Actual Budget Actual (Negative) REVENUES Taxes $ - $ - $ 15,565,248 $ 14,969,150 $ (596,098) Licenses and permits , ,413 28,598 Intergovernmental - - 5,577,851 5,942, ,711 Charges for services 1,514,392 1,550,687 5,921,915 5,927,614 5,699 Miscellaneous - 4, , ,512 (430,481) Total revenues 1,514,392 1,554,791 28,170,822 27,543,251 (627,571) EXPENDITURES Current General government 1,505,792 1,414,263 10,647,332 10,548,890 98,442 Court related - - 1,280,866 1,280, Public safety ,606,831 15,519,507 87,324 Physical environment , ,942 19,134 Economic environment , , ,115 Culture and recreation ,197 60,476 6,721 Human services , ,908 (45,922) Capital outlay General government 8,600 8,597 42, ,556 (191,456) Transportation , ,215 Public safety , ,807 (12,180) Debt Service HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND, NON-GAAP BASIS (CONTINUED) As of September 30, 2015 Principal retirement , ,508 5,979 Interest and fiscal charges - - 7,153 55,679 (48,526) ,844 6,019 25,825 Total expenditures 1,514,392 1,422,860 30,072,185 29,702, ,858 Excess (deficiencies) of revenues over (under) expenditures - 131,931 (1,901,363) (2,159,076) (257,713) OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt , ,215 - Transfers in ,773,638 15,706,910 (66,728) Transfers out - (131,931) (13,194,336) (13,184,427) 9,909 Total other financing sources (uses) - (131,931) 2,856,517 2,799,698 (56,819) Net change in fund balances , ,622 (314,532) Fund balances - October 1, 2014, as restated - - (955,154) 2,857,735 3,812,889 Fund balances - September 30, 2015 $ - $ - $ - $ 3,498,357 $ 3,498,357 I-65

86 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Law Court Local Enforcement Section 8 Technology Affordable Emergency Trust Housing Fund Housing 911 ASSETS Cash and cash equivalents $ 33,684 $ 2,474 $ 53 $ 413,053 $ 66,256 Prepaid expenses Receivables (net) 3,000-3,129-49,568 Total assets $ 36,684 $ 2,474 $ 3,182 $ 413,053 $ 115,824 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ 840 $ 7,900 $ 24 $ 85 Accrued liabilities Unearned revenue Other liabilities ,270 - Total liabilities , , Fund balances Restricted Assigned 36,684 1,563 (4,718) 72, ,739 Total fund balances (deficits) 36,684 1,563 (4,718) 72, ,739 Total liabilities and fund balances $ 36,684 $ 2,474 $ 3,182 $ 413,053 $ 115,824 I-66

87 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 $ 23,706 $ 157,827 $ 4,348 $ 627,818 $ 447,453 $ 286,897 $ 483, ,992 7,849-1, ,459 $ 23,706 $ 157,943 $ 12,340 $ 635,667 $ 447,453 $ 287,913 $ 652,327 $ 5,318 $ 4,679 $ 332,957 $ 104,975 $ 2,796 $ 199,491 $ 95, ,007 1, , ,319-5,318 4, , ,877 2, , , , ,264 (328,624) 528, ,657 (73,589) 551,556 18, ,264 (328,624) 528, ,657 (73,589) 551,556 $ 23,706 $ 157,943 $ 12,340 $ 635,667 $ 447,453 $ 287,913 $ 652,327 I-67

88 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING BALANCE SHEET (CONTINUED) NONMAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Airport North Four Wheeler Sears Felda Labelle Corners Road MSBU MSBU MSBU MSBU MSBU ASSETS Cash and cash equivalents $ 964,806 $ 284,093 $ 526,559 $ 45,468 $ 112,323 Prepaid expenses Receivables (net) , Total assets $ 965,195 $ 284,154 $ 527,015 $ 345,476 $ 112,835 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 4,374 $ 1,852 $ 12,122 $ 1,719 $ 1,648 Accrued liabilities Unearned revenue Other liabilities Total liabilities 4,374 1,852 12,122 1,719 1,648 Fund balances Restricted Assigned 960, , , , ,187 Total fund balances (deficits) 960, , , , ,187 Total liabilities and fund balances $ 965,195 $ 284,154 $ 527,015 $ 345,476 $ 112,835 I-68

89 Special Revenue Funds Clerk of Hooker's Phillips Circuit Court's Sheriff's Point Mosquito Road Sky Valley Building Property Modernization Gun Range Lighting Control MSBU MSBU Projects Appraiser Trust Fund Fund $ 8,537 $ 336,384 $ 3,697 $ 14,834 $ 41,473 $ 126,641 $ 203,215 $ 16, ,000-7,900 1, , $ 16,437 $ 337,500 $ 3,697 $ 14,834 $ 45,930 $ 126,641 $ 205,215 $ 16,350 $ 948 $ 60,779 $ - $ 1,002 $ 747 $ - $ 3,750 $ , , ,285-1,002 2,747-3, ,465-15, ,215 3,697 13,832 43, ,641-16,350 15, ,215 3,697 13,832 43, , ,465 16,350 $ 16,437 $ 337,500 $ 3,697 $ 14,834 $ 45,930 $ 126,641 $ 205,215 $ 16,350 I-69

90 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING BALANCE SHEET (CONTINUED) NONMAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Sheriff's Supervisor of Sheriff's Equitable Elections Training Sharing Sheriff's Federal Election Fund Program Fund Commissary Activities Fund ASSETS Cash and cash equivalents $ 3,246 $ 2,719 $ 280,782 $ 6,059 Prepaid expenses Receivables (net) ,551 - Total assets $ 3,246 $ 2,719 $ 292,333 $ 6,059 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ - $ - $ 5,508 $ - Accrued liabilities - - 4,377 - Unearned revenue ,039 Other liabilities Total liabilities - - 9,885 6,039 Fund balances Restricted , Assigned 3,246 2, Total fund balances (deficits) 3,246 2, , Total liabilities and fund balances $ 3,246 $ 2,719 $ 292,333 $ 6,059 I-70

91 Special Revenue Funds Total LaBelle Airglades Seven K Murray Non-Major Fines and Airport Airport Estates Road Governmental forfeitures Fund Fund MSBU MSBU Funds $ 407,907 $ 175,021 $ 108,917 $ 6,171 $ 9,143 $ 6,231, ,000 84,469 38, , ,103,465 $ 492,376 $ 213,404 $ 521,951 $ 6,171 $ 9,143 $ 7,337,247 $ 20,561 $ 12,480 $ 173,939 $ - $ - $ 1,056,269 2, , ,039 1,501 32,273 37, ,441 24,164 45, , ,664, , , , ,125 6,171 9,143 5,189, , , ,125 6,171 9,143 5,672,948 $ 492,376 $ 213,404 $ 521,951 $ 6,171 $ 9,143 $ 7,337,247 I-71

92 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Law Court Local Enforcement Section 8 Technology Affordable Emergency Trust Housing Fund Housing 911 REVENUES Intergovernmental $ - $ 172,462 $ - $ 249,747 $ 75,783 Taxes Charges for services - 2,566 38, ,218 Fines and forfeitures 11, Miscellaneous - 5, Total revenues 11, ,139 38, , ,701 EXPENDITURES Current General government , Court related Public safety 9, ,167 Physical environment Transportation Economic environment - 202, ,747 - Culture and recreation Human Services Capital outlay General government Physical environment Debt service Principal retirement Interest and fiscal charges Total expenditures 9, ,413 40, , ,167 Excess (deficiencies) of revenues over (under) expenditures 1,844 (22,274) (2,137) - 43,534 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 1,844 (22,274) (2,137) - 43,534 Fund balances - October 1, ,840 23,837 (2,581) 77,868 72,205 Restatements (5,253) Fund balances - October 1, 2014, as restated 34,840 23,837 (2,581) 72,615 72,205 Fund balances - September 30, 2015 $ 36,684 $ 1,563 $ (4,718) $ 72,615 $ 115,739 I-72

93 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 $ - $ - $ - $ - $ - $ - $ - 60,763 45, , , , , , , , ,083 4,252 15,902 6,394 60,763 46, , , , , , , , ,107 37, , , , ,825-9, ,228 15, , ,107 37, , , , , ,962 5,656 9,290 (72,999) 56,971 86,145 73,574 12, ,656 9,290 (72,999) 56,971 86,145 73,574 12,214 12, ,974 (255,625) 471, ,512 (143,090) 539, (4,073) - 12, ,974 (255,625) 471, ,512 (147,163) 539,342 $ 18,388 $ 153,264 $ (328,624) $ 528,790 $ 444,657 $ (73,589) $ 551,556 I-73

94 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Airport North Four Wheeler Sears Felda Labelle Corners Road MSBU MSBU MSBU MSBU MSBU REVENUES Intergovernmental $ - $ - $ - $ - $ - Taxes 93,855 22,895 48,194 17,204 96,688 Charges for services Fines and forfeitures Miscellaneous 8,652 2,374 4,780 3,177 1,462 Total revenues 102,507 25,269 52,974 20,381 98,150 EXPENDITURES Current General government Court related Public safety Physical environment 31,768 7,881 41,514 16,314 17,908 Transportation Economic environment Culture and recreation Human Services Capital outlay General government - 65, Physical environment Debt service Principal retirement ,569 Interest and fiscal charges ,066 Total expenditures 31,768 72,938 41,514 16, ,543 Excess (deficiencies) of revenues over (under) expenditures 70,739 (47,669) 11,460 4,067 (60,393) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances 70,739 (47,669) 11,460 4,067 (60,393) Fund balances - October 1, , , , , ,580 Restatements (724) Fund balances - October 1, 2014, as restated 890, , , , ,580 Fund balances - September 30, 2015 $ 960,821 $ 282,302 $ 514,893 $ 343,757 $ 111,187 I-74

95 Special Revenue Funds Clerk of Hooker's Phillips Sky Circuit Court's Sheriff's Point Mosquito Road Valley Building Property Modernization Gun Range Lighting Control MSBU MSBU Projects Appraiser Trust Fund Fund $ - $ 31,540 $ - $ - $ 25,000 $ - $ 121,814 $ - 11, ,979-13, ,677-8, , , , , ,621 81, , ,814 8, , , ,300 3, , ,098-8, , , ,098-8,647 45, , ,300 3, (129,417) 34 4,974 36,262 11,131 (91,486) 4, (25,000) (25,000) (129,417) 34 4,974 11,262 11,131 (91,486) 4,749 15, ,632 3,663 8,858 69, , ,951 11, (37,395) , ,632 3,663 8,858 31, , ,951 11,601 $ 15,489 $ 273,215 $ 3,697 $ 13,832 $ 43,183 $ 126,641 $ 201,465 $ 16,350 I-75

96 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS For the Fiscal Year Ended September 30, 2015 Special Revenue Funds Sheriff's Supervisor of Sheriff's Equitable Elections Training Sharing Sheriff's Federal Election Fund Program Fund Commissary Activities Fund REVENUES Intergovernmental $ - $ - $ - $ - Taxes Charges for services Fines and forfeitures Miscellaneous 6, , Total revenues 6, , EXPENDITURES Current General government 1, Court related Public safety ,546 - Physical environment Transportation Economic environment Culture and recreation Human Services Capital outlay General government Physical environment ,342 - Debt service Principal retirement Interest and fiscal charges Total expenditures 1,772-96,888 - Excess (deficiencies) of revenues over (under) expenditures 4, , OTHER FINANCING SOURCES (USES) Transfers in Transfers out (10,000) Total other financing sources (uses) (10,000) Net change in fund balances (5,200) 3 48, Fund balances - October 1, ,446 2, ,071 - Restatements Fund balances - October 1, 2014, as restated 8,446 2, ,071 - Fund balances - September 30, 2015 $ 3,246 $ 2,719 $ 282,448 $ 20 I-76

97 Special Revenue Funds Total LaBelle Airglades Seven K Murray Non-Major Fines and Airport Airport Estates Road Governmental Forfeitures Fund Fund MSBU MSBU Funds $ 14,708 $ 841,008 $ - $ - $ - $ 1,532, ,587 3,128, , ,948 1,931, ,214, , , , ,915 1, , ,093 1,395,652 2,255,371 1,580 9,587 9,020,642 41, , , , , ,589, , ,367 1,173, ,843, , , , , ,056, , ,984-36, ,813-6, , ,136 1,376,399 2,054, ,392, ,957 19, ,440 1,580 9, , (416,404) (451,404) (416,404) (451,404) (78,447) 19, ,440 1,580 9, , ,659 T 148, ,685 4,591-5,543, (47,445) 546, , ,685 4,591-5,496,499 $ 468,212 $ 167,707 $ 310,125 $ 6,171 $ 9,143 $ 5,672,948 I-77

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99 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION COMBINING SCHEDULE - BALANCE SHEET FIDUCIARY FUNDS As of September 30, 2015 Clerk of Tax Circuit Court Sheriff Collector Total ASSETS Cash and cash equivalents $ 2,839,193 $ 126,083 $ 578,800 $ 3,544,076 Receivables (net) 2, ,944 Total assets $ 2,842,137 $ 126,083 $ 578,800 $ 3,547,020 LIABILITIES Accounts payable $ 73,543 $ - $ - $ 73,543 Due to other constitutional officers ,335 37,335 Due to other governments 617,273 6, ,271 Due to individuals 2,092, ,826 58,338 2,263,587 Due to other funds 58,898 6,424-65,322 Deposits , ,962 Total liabilities $ 2,842,137 $ 126,083 $ 578,800 $ 3,547,020 I-78

100 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUNDS For the Fiscal Year Ended September 30, 2015 Beginning Ending Balance Additions Deletions Balance Clerk of Circuit Court ASSETS Cash and cash equivalents $ 1,021,007 $ 12,043,579 $ 10,225,393 $ 2,839,193 Accounts Receivable 3,113 5,653 5,822 2,944 Total assets $ 1,024,120 $ 12,049,232 $ 10,231,215 $ 2,842,137 LIABILITIES Accounts payable $ 27,476 $ 4,818,588 $ 4,772,521 $ 73,543 Due to other governments 922,560 8,495,014 8,800, ,273 Due to individuals 10,364 2,093,463 11,404 2,092,423 Due to other funds 63, , ,370 58,898 Total liabilities $ 1,024,120 $ 16,159,613 $ 14,341,596 $ 2,842,137 Sheriff ASSETS Cash and cash equivalents $ 101,250 $ 647,157 $ 622,324 $ 126,083 Total assets $ 101,250 $ 647,157 $ 622,324 $ 126,083 LIABILITIES Due to other governments $ 9,903 $ 46,270 $ 49,340 $ 6,833 Due to individuals 84, , , ,826 Due to other funds 6, , ,596 6,424 Total liabilities $ 101,250 $ 646,156 $ 621,323 $ 126,083 Tax Collector ASSETS Cash and cash equivalents $ 658,386 $ 60,449,789 $ 60,529,375 $ 578,800 Total assets $ 658,386 $ 60,449,789 $ 60,529,375 $ 578,800 LIABILITIES Due to other constitutional officers $ 143,806 $ 5,562,123 $ 5,668,594 $ 37,335 Due to other governments 147 5,192,795 5,192, Due to individuals 33, , ,201 58,338 Due to other funds - 6,343 6,343 - Deposits 480,637 52,688,893 52,686, ,962 Total liabilities $ 658,386 $ 64,017,897 $ 64,097,483 $ 578,800 I-79

101 Beginning Ending Balance Additions Deletions Balance TOTAL ASSETS Cash and cash equivalents $ 1,780,643 $ 73,140,525 $ 71,377,092 $ 3,544,076 Receivables (net) 3,113 5,653 5,822 2,944 Total assets $ 1,783,756 $ 73,146,178 $ 71,382,914 $ 3,547,020 LIABILITIES Accounts payable $ 27,476 $ 4,818,588 $ 4,772,521 $ 73,543 Due to other constitutional officers 143,806 5,562,123 5,668,594 37,335 Due to other governments 932,610 13,734,079 14,042, ,271 Due to individuals 129,051 3,144,528 1,009,992 2,263,587 Due to other funds 70, , ,309 65,322 Deposits 480,637 52,688,893 52,686, ,962 Total liabilities $ 1,783,756 $ 80,823,666 $ 79,060,402 $ 3,547,020 I-80

102 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Fiscal Year Ended September 30, 2015 Schedule of the County's Proportionate Share of Net Pension Plan Liability Florida Retirement System Pension Plan 6/30/2015 6/30/2014 County's proportion of the net pension liability % % County's proportionate share of the net pension liability $ 8,657,429 $ 3,917,027 County's covered-employee payroll $ 14,489,748 $ 13,530,942 County's proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability 59.75% 28.95% 92.00% 96.09% Note: Data was unvailable prior to 2014 Schedule of the County's Contributions to the Florida Retirement System Pension Plan Contractually required contribution $ 1,877,742 $ 1,701,137 Contributions in relation to the contractually required contribution 1,877,742 1,701,137 Contribution deficiency (excess) $ - $ - County's covered-employee payroll $ 14,489,748 $ 13,530,942 Contributions as a percentage of coveredemployee payroll 12.96% 12.57% Note: Data was unavailable prior to 2014 I-81

103 HENDRY COUNTY, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION Fiscal Year Ended September 30, 2015 Schedule of the County's Proportionate Share of Health Insurance Subsidy Plan Liability 6/30/2015 6/30/2014 County's proportion of the HIS Plan liability % % County's proportionate share of the HIS Plan liability $ 4,828,351 $ 4,356,955 County's covered-employee payroll $ 14,489,748 $ 13,530,942 County's proportionate share of the HIS Plan liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total HIS Plan liability 33.32% 32.20% 0.50% 0.99% Note: Data was unvailable prior to 2014 Schedule of the County's Contributions to the Health Insurance Subsidy Plan Contractually required contribution $ 196,215 $ 168,460 Contributions in relation to the contractually required contribution 196, ,460 Contribution deficiency (excess) $ - $ - County's covered-employee payroll $ 14,489,748 $ 13,530,942 Contributions as a percentage of coveredemployee payroll 1.35% 1.24% Note: Data was unavailable prior to 2014 I-82

104 366 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, 2015, 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 24, 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-83

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106 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Report of Independent Auditor s 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 Auditor General To the Honorable Board of County Commissioners of Hendry County, Florida: Report on Compliance for Each Major Federal Program and State Financial Assistance Project We have audited Hendry County, Florida s (the County ) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement and the requirements described in the State of Florida Department of Financial Services State Projects Compliance Supplement that could have a direct and material effect on each of the County s major federal programs and state financial assistance projects for the year ended September 30, The County s major federal programs and state financial assistance projects are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs and state financial assistance projects. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of the County s major federal programs and state financial assistance projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generallyaccepted 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter , Rules of the Auditor General. Those standards, OMB Circular A-133 and Chapter , Rules of the Auditor General, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state financial assistance project occurred. An audit includes examining, on a test basis, evidence about the County s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. I-85

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108 HENDRY COUNTY, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Fiscal Year Ended September 30, 2015 DEPARTMENT OF HOMELAND SECURITY FEDERAL AGENCY Pass-through entity CFDA Federal Federal Program - Project Name Number Contract / Grant Number Expenditures Passed through the Federal Emergency Management Agency Homeland Security Grant - Office of Domestic Preparedness Grant (ODP) DS-L $ 7,864 Emergence Management Preparedness & Assistance (EMPG) FG ,259 Emergence Management Preparedness & Assistance (EMPG) FG-5A ,163 7,864 57,422 TOTAL DEPARTMENT OF HOMELAND SECURITY 65,286 DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through State of Florida, Department of Revenue Title IV Child Support Enforcement COC26 81,492 TOTAL DEPARTMENT OF HEALTH AND HUMAN SERVICES FEDERAL AVIATION ADMINISTRATION Airport Improvement Program - Construct Replacement GA LaBelle Airport Apron-Design FAA# ,880 Construct Replacement GA LaBelle Airport Apron-Construction FAA# ,595 General Aviation Terminal Building-LaBelle Airport FAA# ,250 TOTAL FEDERAL AVIATION ADMINISTRATION DEPARTMENT OF JUSTICE - BUREAU OF JUSTICE ASSISTANCE 81, ,725 Passed through State of Florida Department of Law Enforcement Edward Byrne Memorial Justice Assistance Grant - Mobile Computing Phase IV JAGC HEND-2-R ,637 Truancy Court Grant JAGC HEND 3-R ,658 Multi Program Initiative Grant-Enhancing Jail Security DJ-BX ,057 Truancy Court V - Intervention Services DJ-BX ,365 AT&T Unlimited Mobile Data Hotspots for Police Use DJ-BX ,365 63,082 Passed through State of Florida Attorney General ARRA Recovery Act - Public Safety Partnership and Community Policing - COPS Hiring Recovery Program (CHRP) UMWX ,731 Bulletproof Vest Partnership Program N/A 6,712 State Criminal Alien Assistance Program (SCAAP) AP-BX ,961 Victims of Crime Act (VOCA) Grant V ,709 TOTAL DEPARTMENT OF JUSTICE 361,195 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Passed through State of Florida Department of Community Affairs Lower Income Housing Assistance Program_Section 8 Moderate Rehabilitation - Section 8 Voucher Program A ,462 TOTAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TOTAL FEDERAL AWARDS 172,462 $ 1,434,160 The notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule. I-87

109 HENDRY COUNTY, FLORIDA SCHEDULE OF STATE FINANCIAL ASSISTANCE For the Fiscal Year Ended September 30, 2015 STATE AGENCY CSFA State State Project - Project Name Number Grant / Contract Number Expenditures STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES Wireless 911 Emergency Telephone System $ 64,483 Wireless 911 Emergency Telephone System ,300 TOTAL STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES 75,783 STATE OF FLORIDA DEPARTMENT OF HEALTH Emergency Medical Services (EMS) Matching Awards - Emergency Medical Grant C3016 6,382 TOTAL STATE OF FLORIDA DEPARTMENT OF HEALTH 6,382 FLORIDA DEPARTMENT OF TRANSPORTATION Economic Development Transportation Projects - Road Fund CR835 Construction of 12" Wide Left and Right Turn Lane FM# ,432 Small County Road Assistance Program CR835 From 7.66 Miles South of US27 to 6.65 Miles South of US FM# ,499 CR78 Construction of Phase III FM# , ,173 Small County Outreach Program - CR835 From 7.66 Miles South of US27 to 6.65 Miles South of US FM# ,499 CR78 Construction of Phase III FM# ,654 CR78 Construction of Phase IV FM# ,026,883 CR78 From Slaughterhouse Rd to Old N. River Road FM# ,567 2,001,603 County Incentive Grant Program - Helms Road Extention Design Services From SR29 to SR FM# ,131 Helms Road Extention Construction From SR29 to SR FM# , ,078 Aviation Development Grants - LaBelle Land Acquisition FM# ,506 Airglades Airport-Design and Construct Entrance Road to Airport FM# ,435 Traffic Signal Maintence and Comepnsation Agreement FM# ,549 General Aviation Terminal Building-LaBelle Airport FM# Design for LaBelle Airport Construct Replace GA Aircraft FM# , ,143 TOTAL STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION 3,527,429 STATE OF FLORIDA HOUSING FINANCE CORPORATION State Housing Initiatives Partnership Program (SHIP) N/A 249,747 TOTAL STATE OF FLORIDA HOUSING FINANCE CORPORATION 249,747 STATE OF FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY Growth Management Implementation - Growth Manage Implement Technical Assistance-Concurrent PO114 25,000 TOTAL STATE OF FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY 25,000 STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION Statewide Surface Water Restoration and Wastewater Projects - Small County Solid Waste Grant SC 90,909 TOTAL STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION 90,909 I-88

110 HENDRY COUNTY, FLORIDA SCHEDULE OF STATE FINANCIAL ASSISTANCE - CONTINUED For the Fiscal Year Ended September 30, 2015 STATE AGENCY CSFA State State Project - Project Name Number Grant / Contract Number Expenditures STATE OF FLORIDA EXECUTIVE OFFICE OF THE GOVENOR Emergency Management Programs - Emergency Management Preparedness & Assistance Base Grant BG ,988 Emergency Management Preparedness & Assistance Base Grant BG ,104 TOTAL STATE OF FLORIDA EXECUTIVE OFFICE OF THE GOVENOR TOTAL STATE FINANCIAL ASSISTANCE $ 108,092 4,083,342 The notes to Schedules of Expenditures of Federal Awards and State Financial Assistance are an integral part of this schedule. I-89

111 HENDRY COUNTY, FLORIDA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE SEPTEMBER 30, 2015 NOTE 1 Summary of Significant Accounting Policies Basis of Presentation The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance include the federal and state activity of Hendry County, Florida (the County ). The County reporting entity is defined in Note 1 to the County s Basic Financial Statements for the fiscal year ended September 30, All federal financial assistance programs received directly from federal agencies, as well as federal financial assistance programs passed through other government agencies, are included in the schedule. Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards and the Schedule of State Financial Assistance is presented using the modified accrual basis of accounting, which is described in Note 1 to the County s Basic Financial Statements for the fiscal year ended September 30, NOTE 2 Contingencies Grant monies received by the County are for specific purposes and are subject to review by the grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon prior experience, the County does not believe that such disallowances, if any, would have a material effect on the financial position of the County. As of September 30, 2015, there were no material questioned or disallowed costs as a result of grant audits in process or completed of which management was aware. Any adjustments to grant funding are recorded in the year the adjustment occurs. I-90

112 HENDRY COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year ended September 30, 2015 Part I Summary of Auditor s Results 1. The Independent Auditor s Report on the financial statements expresses an unmodified opinion. 2. No significant deficiencies related to the audit of the financial statements are reported in the 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. 3. No instances of noncompliance material to the financial statements of the Hendry County, Florida were disclosed during the audit. 4. No significant deficiencies relating to the audit of major federal awards or state financial assistance projects are reported. 5. Report of Independent Auditor s 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 Auditor General expressed an unmodified opinion. 6. There were no audit findings relative to major federal awards programs for the Hendry County, Florida. 7. There were no audit findings relative to major state financial assistance projects for Hendry County, Florida. 8. The programs tested as major programs/projects included the following: Federal Programs: Name of Program CFDA Numbers FEDERAL AVIATION ADMINISTRATION Airport Improvement Program State Projects: Project Names CSFA Numbers STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION Aviation Development Grants Small County Outreach Program Small County Road Assistance Program I-91

113 HENDRY COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year ended September 30, 2015 Part I Summary of Auditor s Results (continued) 9. The dollar threshold used for distinguishing Type A programs/projects was $300,000 for federal programs and $300,000 for state financial assistance projects. 10. The County qualified as a low-risk auditee for Federal Single Audit purposes, as that term is defined in OMB Circular A-133. Part II Schedule of Financial Statement Findings This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance related to the financial statements that are required to be reported in accordance with Government Auditing Standards. There are no financial statement findings required to be reported in accordance with Government Auditing Standards. Part III Major Federal Awards Programs Findings and Questioned Costs This section identifies significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs, related to the audit of major federal programs, as required to be reported in accordance with Circular A-133 section.510. There are no findings or questioned costs required to be reported in accordance with Circular A-133 Section 510. I-92

114 HENDRY COUNTY, FLORIDA Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year ended September 30, 2015 Part IV Major State Financial Assistance Projects Findings and Questioned Costs This section identifies significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs, related to the audit of major state projects, as required to be reported in accordance with Chapter , Rules of the Auditor General Local Governmental Entity Audits. There are no findings or questioned costs required to be reported in accordance with Chapter , Rules of the Auditor General Local Governmental Entity Audits. Part V Summary Schedule of Prior Audit Findings There were no prior year audit findings as defined in Parts II, III and IV above. I-93

115 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Management Letter To the Honorable Board of County Commissioners of Hendry County, Florida: Report on the Financial Statements 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, 2015, which collectively comprise the County's basic financial statements and have issued our report thereon dated June 24, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations ; and Chapter , Rules of the Florida Auditor General. Other Reports and Schedule 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; and Report of Independent Accountant on Compliance with Local Government Investment Policies and E911 Requirements of Sections and , Florida Statutes. Disclosures in those reports and schedule, which are dated June 24, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding annual financial audit report. I-94

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117 June 24, Barlaara 5.?Butler flerk af fircuit [aurt, 1-fendi?J [aunty??(). '73ax 1760 l a'73elle,, 'Flllrida Jrelep~llne Tax Honorable Sherrill F. Norman, C.P. A. Auditor General P. 0. Box 1735 Tallahassee, Florida Re: Hendry County, Florida Dear Honorable Norman: Pursuant to Rule (1), this is our response to the auditor' s comments in the audit report for the fiscal year ending September 30, 2015, for Hendry County, Florida. Report On Internal Accounting Controls: Prior year's comments and recommendations which continue to apply: None Current year comments: None Independent Auditors Management Letter Prior year' s comments and recommendations which continue to apply: None Current year comments: None If you have any questions concerning or comments regarding these responses, please contact me at bsb ~;JL/~ Barbara S. Butler Clerk of Circuit Court & Comptroller Hendry County, Florida I-96

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119 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT September 30, 2015 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

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121 Independent Auditor's Report 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: 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, 2015, 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, 2015, 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. 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. II - 1

122 Auditor's Responsibility, continued 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, 2015 and the respective changes thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle As described in Note 3 to the special-purpose financial statements, effective October 1, 2014, the Clerk adopted the provisions of Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 15 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. II - 2

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124 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Balance Sheet - Governmental Funds September 30, 2015 General Fund Modernization Trust Fund Total ASSETS Cash $ 247,706 $ 203,215 $ 450,921 Accounts Receivable 3,049-3,049 Due from Other Funds 58,872-58,872 Due from Other Governments 25,147-25,147 Prepaid Expenses 3,052 2,000 5,052 Total Assets $ 337,826 $ 205,215 $ 543,041 LIABILITIES AND FUND BALANCES Liabilities Accounts Payable $ 375 $ 3,750 $ 4,125 Accrued Payroll 19,085-19,085 Due to BOCC 201, ,048 Due to Other Governments 117, ,318 Total Liabilities 337,826 3, ,576 Fund Balance Restricted - 201, ,465 Total Liabilities and Fund Balance $ 337,826 $ 205,215 $ 543,041 See accompanying notes. II - 4

125 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2015 Revenues General Fund Modernization Trust Fund Total Intergovernmental $ 81,491 $ 121,814 $ 203,305 Charges for Services 1,058,894-1,058,894 Miscellaneous 10,867-10,867 Total Revenues 1,151, ,814 1,273,066 Expenditures General Government 964, ,300 1,177,445 Court Related 1,034,331-1,034,331 Total Expenditures 1,998, ,300 2,211,776 Excess of revenues over (under) expenditures (847,224) (91,486) (938,710) Other financing sources (uses) Operating transfers in 1,042,417-1,042,417 Operating transfers out (195,193) - (195,193) Total other financing sources (uses) 847, ,224 Excess of revenues and other sources sources over (under) expenditures and other sources - (91,486) (91,486) Fund Balance - October 1, , ,951 Fund Balance - September 30, 2015 $ - $ 201,465 $ 201,465 See accompanying notes. II - 5

126 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Fiduciary Assets and Liabilities- Agency Funds September 30, 2015 Operating Fines and Christmas Trust Registry Forfeitures Club Total ASSETS Cash $ 314,121 $ 2,140,070 $ 375,416 $ 9,586 $ 2,839,193 Accounts Receivable Due from - Other Governments 2, ,865 Total Assets $ 317,036 $ 2,140,070 $ 375,445 $ 9,586 $ 2,842,137 LIABILITIES Accounts Payable $ 25,988 $ - $ 47,555 $ - $ 73,543 Due to Other Funds 29-58,869-58,898 Due to Other Governments 291,019 57, , ,273 Due to Individuals - 2,082,837-9,586 2,092,423 Total Liabilities $ 317,036 $ 2,140,070 $ 375,445 $ 9,586 $ 2,842,137 See accompanying notes. II - 6

127 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity 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. 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. The Public Records Modernization Trust fund is used to account revenues generated from the additional service charge on most recorded instruments as defined in Sections (12)(d) and (12)(e)1, F.S. The funds shall be used exclusively to fund court-related technology needs of the Clerk as defined in Section (1)(f)2 and (h), F.S. The excess of such revenues over expenditures for the fiscal year are retained by the Clerk in the fund. 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. II - 7

128 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Measurement Focus, Basis of Accounting and Financial Statement Presentation Governmental Funds 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. Budgetary Process 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. II - 8

129 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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, 2015, the Clerk had $92,335 in long-term compensated absences payable. This amount is reported in the government-wide financial statements of Hendry County, Florida. 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 revenues and expenditures or expenses during the reporting period. Actual results could differ from those estimates. Fund Balances Spendable fund balances are classified based on a hierarchy of the Clerk s ability to control the spending of these fund balances. Restricted fund balances are fund balance amounts that are constrained for specific purposes which are externally imposed by creditors, grantors, contributors, or laws or regulations or imposed by law through constitutional provisions or enabling legislation. As of September 30, 2015, the Clerk had $201,465 in restricted fund balance in the Modernization Trust Fund. II - 9

130 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The excess of such revenues over expenditures for the fiscal year are retained by the Clerk in the fund to fund court-related technology needs of the Clerk, as defined in Section (1)(f)2 and (h), F.S. Committed fund balances are fund balances constrained for specific purposes imposed by the Clerk s formal action of highest level of decision making authority. As of September 30, 2015, the Clerk had no committed fund balances. Assigned fund balances are fund balances are constrained by the Clerk's intent to be used for specific purposes, but which are neither restricted nor committed. As of September 30, 2015, the Clerk had no committed fund balances. Unassigned fund balances represent the residual positive fund balance within the General Fund, which has not been assigned to other funds and has not been restricted, committed or assigned. In funds other than the General Fund, unassigned fund balances are limited to negative residual balances. As of September 30, 2015, the Clerk had no unassigned fund balances because all excess revenues within the general fund are required to be remitted to the Board. New Accounting Standards Beginning with fiscal year 2014, the Clerk implemented GASB 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 instruments and service concession arrangements, respectively. None of these items affect the Clerk at this time. The other position of GASB Statement is nomenclature. Statement No. 64; Derivative Instruments: Application of Hedge Accounting Termination Provisions is not applicable to the Clerk. NOTE 2 - CASH AND CASH INVESTMENTS During the fiscal year, the Clerk maintained deposits in interest-bearing savings and checking accounts. At September 30, 2015, the bank balance of all accounts was $3,470,536 and the book balance of deposits was $3,289,579. 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. II - 10

131 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 3 - RETIREMENT PLAN Plan Description The Clerk of the Circuit Court's employees participate in the Florida Retirement System (FRS). As provided by Chapters 12I and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section , Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments (where applicable), and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July l, 2011, Regular class members who retire at or after age 62 with at least six years of credited service, or 30 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their fmal average compensation based on the five highest years of salary, for each year of credited service. Vested regular class members with less than 30 years of service may retire before age 62 and are entitled to a retirement benefit payable monthly also equal to 1.6% of their final average compensation for each year of credited service based on the five highest years of salary, with a 5% reduction for each year under age 62. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled on or after July 1, 2011, by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 or 33 years of service regardless of age. Also, the fmal average compensation for these members is based on the eight highest years of salary. Funding Policy All enrolled members of the FRS Pension Plan are required to contribute 3.0% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on statewide contribution rates. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular 7.37% and 7.26%; county elected officers 43.24% and 42.27%; senior management 21.14% and 21.43%; re-hired regular service 3.8% and 4.31%; and DROP participants 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Clerk of the Circuit Court contributed to the plan an amount equal to 10.59% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is II - 11

132 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 3 - RETIREMENT PLAN (CONTINUED) funded by required contributions from FRS participating employees as set forth by Florida Legislature, based on a percentage of gross compensation for all active FRS members. For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Clerk of the Circuit Court recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan and the defined contribution plan, amounting to $112,550, $16,078, and $13,642 respectively, for the fiscal year ended September 30, The Clerk of the Circuit Court's payments after June 30, 2015, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $21,381, and $4,987, respectively. The Clerk of the Circuit Court is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government-wide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - and amendment of GASE Statement No. 27, and GASE Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - and amendment of GASE Statement No. 68, effective October 1, The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida , or from the Web site NOTE 4 - GENERAL LONG-TERM DEBT The following changes in general long-term debt occurred during the year ended September 30, 2015: Long-term debt payable at October 1, 2014 Increase in accrued compensated absences Long-term debt payable at September 30, 2015 $ $ 84,440 7,895 92,335 General long-term debt is comprised of the noncurrent portion of compensated absences. Employees of the Clerk are entitled to paid annual leave, based on length of service and job classification. II - 12

133 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 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, 2015, the Clerk was charged $308,102. NOTE 6 - 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 7- OTHER POST EMPLOYMENT BENEFITS Plan Description In accordance with Section , Florida Statutes, because the Clerk provides medical plans to employees of the Clerk and their eligible dependents, the Clerk 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 - For employees enrolled in FRS prior to July 1, 2011, age 62, and 6 years of service or 30 years of service, regardless of age, is normal retirement, respectively. Employees may retire early at age 43 and 6 years of service. For employees enrolled in FRS on or after July 1, 2011, age 65, and 8 years of service or 33 years of service, regardless of age, is normal reitrement, respectively. Employees may retire early at age 43 and 8 years of service. Special Risk - For employees enrolled in FRS prior to July 1, 2011, age 55 and 6 years of service or 25 years of speical risk service, regardless, of age is normal retirement. Employees may retire early at age 36 and 6 years of service. For employees enrolled in FRS on ar after July 1, 2011, age 60 and 8 years of service or 30 years of special risk service, regardless of age, is normal retirement. Employees may retire early at at 36 and 8 years of service. II - 13

134 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements September 30, 2015 NOTE 7- OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Membership As of September 30, 2015, membership consisted of: Active Employees 30 Eligible Retirees - Covered Spouses - 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. Currently, the Clerk of Courts has no employees receiving benefits. Annual OPEB Costs and Net OPEB Obligation Hendry County had an actuarial valuation performed for the plan as of October 1, 2013 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 Clerk of Courts's annual OPEB cost for the fiscal year was set at $29,053, as the transition liability was set to zero as of September 30, The Clerk of Courts's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation from 2015 is as follows: Fiscal Year Ended Annual Cost of OPEB Employer Contributed % of Annual OPEB Cost Contributed Net OPEB Obligation September 30, 2015 $ 29,053 $ 7, % $ 148,554 The funded status of the plan as of September 30, 2015 was as follows: Actuarial Accrued Liability (AAL) Actuarial Value of Plan Assets Unfunded Actuarial Accrued Liability (AAL) Covered Payroll Ration of UAAL to Covered Payroll $ $ $ 203, ,549 1,014,732 20% II - 14

135 REQUIRED SUPPLEMENTARY INFORMATION

136 Revenues HENDRY COUNTY, FLORIDA 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, 2015 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Intergovernmental $ - $ - $ 81,491 $ 81,491 Charges for Services 1,089,066 1,034,519 1,058,894 24,375 Miscellaneous ,867 10,867 Total Revenues 1,089,066 1,034,519 1,151, ,733 Expenditures General Government Personal Services 761, , ,940 (145,523) Operating Expenses 281, ,000 57, ,795 Court Related Personal Services 946, , ,502 1,308 Operating Expenses 142, , ,829 (1,120) Total Expenditures 2,131,483 2,076,936 1,998,476 78,460 Excess of expenditures over revenues (1,042,417) (1,042,417) (847,224) 195,193 Other financing sources (uses) Operating transfers in 1,042,417 1,042,417 1,042,417 - Operating transfers out - - (195,193) (195,193) Total other financing sources (uses) 1,042,417 1,042, ,224 (195,193) Excess of revenues and other sources over (under) expenditures and other uses Fund Balance - October 1, Fund Balance - September 30, 2015 $ - $ - $ - $ - II - 15

137 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds For the fiscal year ended September 30, 2015 OPERATING TRUST Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 429,279 $ 4,932,632 $ 5,047,790 $ 314,121 Accounts Receivable 308 2,445 2, Due from Other Governments 2,805 3,083 3,023 2,865 Total Assets $ 432,392 $ 4,938,160 $ 5,053,516 $ 317,036 LIABILITIES Accounts Payable $ 27,476 $ 1,582,669 $ 1,584,157 $ 25,988 Due to Other Funds Due to Other Governments 404,916 4,832,607 4,946, ,019 Total Liabilities $ 432,392 $ 6,415,451 $ 6,530,807 $ 317,036 REGISTRY OF COURT ASSETS Cash $ 211,180 $ 4,853,093 $ 2,924,203 $ 2,140,070 Total Assets $ 211,180 $ 4,853,093 $ 2,924,203 $ 2,140,070 LIABILITIES Accounts Payable $ - $ 1,502,443 $ 1,502,443 $ - Due to Other Governments 211,180 1,348,596 1,502,543 57,233 Due to Individuals - 2,082,837-2,082,837 Total Liabilities $ 211,180 $ 4,933,876 $ 3,004,986 $ 2,140,070 II - 16

138 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds For the fiscal year ended September 30, 2015 CHRISTMAS CLUB Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 10,364 $ 10,626 $ 11,404 $ 9,586 Total Assets $ 10,364 $ 10,626 $ 11,404 $ 9,586 LIABILITIES Due to Individuals $ 10,364 $ 10,626 $ 11,404 $ 9,586 Total Assets $ 10,364 $ 10,626 $ 11,404 $ 9,586 FINES AND FORFEITURES ASSETS Cash $ 370,184 $ 2,247,228 $ 2,241,996 $ 375,416 Accounts receivable Total Assets $ 370,184 $ 2,247,353 $ 2,242,092 $ 375,445 LIABILITIES Accounts Payable $ - $ 1,733,476 $ 1,685,921 $ 47,555 Due to Other Funds 63, , ,224 58,869 Due to Other Governments 306,464 2,313,811 2,351, ,021 Total Liabilities $ 370,184 $ 4,799,660 $ 4,794,399 $ 375,445 II - 17

139 HENDRY COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Combining Statement of Changes in Assets and Liabilities - All Agency Funds For the fiscal year ended September 30, 2015 TOTAL - ALL AGENCY FUNDS Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 1,021,007 $ 12,043,579 $ 10,225,393 $ 2,839,193 Accounts Receivable 308 2,570 2, Due from Other Governments 2,805 3,083 3,023 2,865 Total Assets $ 1,024,120 $ 12,049,232 $ 10,231,215 $ 2,842,137 LIABILITIES Accounts Payable $ 27,476 $ 4,818,588 $ 4,772,521 $ 73,543 Due to Other Funds 63, , ,370 58,898 Due to Other Governments 922,560 8,495,014 8,800, ,273 Due to Individuals 10,364 2,093,463 11,404 2,092,423 Total Liabilities $ 1,024,120 $ 16,159,613 $ 14,341,596 $ 2,842,137 II - 18

140 366 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 the 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, 2015, 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 6, 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. II - 19

141

142 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Barbara S. Butler Hendry County Clerk of the Circuit Court LaBelle, Florida Report on the Financial Statements We have audited the special-purpose financial statements of the Hendry County, Florida, Clerk of the Circuit Court, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated June 6, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 6, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings and recommendations made in the preceding annual financial audit report. II - 21

143

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145 BARBARA S. BUTLER CLERK CIRCUIT COURT, HENDRY COUNTY P.O. BOX 1760 LABELLE, FLORIDA June 06, 2016 Sherrill F. Norman, 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;;;;k_cv. ~ Stephen W. Clark Finance Director Clerk of Circuit Court Hendry County, Florida II-24

146

147 HENDRY COUNTY, FLORIDA PROPERTY APPRAISER September 30, 2015 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

148

149 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report Honorable Phillip L. Pelletier Hendry County Property Appraiser LaBelle, Florida Report on the Financial Statements We have audited the accompanying special-purpose financial statements of the major fund and the aggregate remaining fund information of the Hendry County, Florida, Property Appraiser, (the "Property Appraiser") as of and for the fiscal year ended September 30, 2015, 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. 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. III-1

150 Auditor's Responsibility, continued 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 Appraiser. Additionally, the special-purpose financial statements present only the Property Appraiser 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 Property Appraiser in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle As described in Note 6 to the special-purpose financial statements, effective October 1, 2014, the Property Appriaser adopted the provisions of Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 15 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

151

152 HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Balance Sheet - Governmental Funds September 30, 2015 General Fund Special Revenue Fund Total Governmental Funds ASSETS Cash $ 48,514 $ 126,641 $ 175,155 Total Assets $ 48,514 $ 126,641 $ 175,155 LIABILITIES AND FUND EQUITY Liabilities Due to Board of County Commissioners $ 41,233 $ - $ 41,233 Accrued Wages 7,281-7,281 Total Liabilities 48,514-48,514 Fund Equity Fund Balance Assigned - 126, ,641 Total Liabilities and Fund Equity $ 48,514 $ 126,641 $ 175,155 III-4

153 HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2015 Revenues Special Total General Revenue Governmental Fund Fund Funds Charges for Services $ 1,228,483 $ 120,677 $ 1,349,160 Miscellaneous ,085 Total Revenues 1,229, ,131 1,350,245 Expenditures General Government Personal Services 985,447 86,800 1,072,247 Operating Expenditures 202,434 23, ,634 Total Expenditures 1,187, ,000 1,297,881 Excess of Revenues over Expenditures 41,233 11,131 52,364 Other financing (uses) sources Operating transfers out (41,233) - (41,233) Total other financing (uses) sources (41,233) - (41,233) Excess of revenues and other sources over (under) expenditures and other uses - 11,131 11,131 Fund balances - October 1, , ,510 Fund balances - September 30, 2015 $ - $ 126,641 $ 126,641 III-5

154 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity (a) Fund Accounting HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 The Property Appraiser is an elected Constitutional Officer of Hendry County (County), a political subdivision of the State of Florida. The position of Property Appraiser was established by Article VIII, Section 1 (d) of the State of Florida Constitution. Under Chapter 192, Florida Statutes, the Property Appraiser is charged with determining the just value of real and tangible personal property located within the County. The Property Appraiser functions as a Constitutional County Officer subject to the general oversight of the Florida Department of Revenue. The office receives compensation from several taxing authorities in the County, based on the budget approved by the Department of Revenue, as provided in Section , Florida Statutes. As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the Property Appraiser and its component units. Component units are entities for which the government is considered to be financially accountable. Financial accountability is determined on the basis of the Property Appraiser's ability to significantly influence operations, select the governing authority, and participate in fiscal management. Based on application of the criteria set forth by the Governmental Accounting Standards Board, management has determined that no component units exist which would require inclusion in these financial statements. The accounts of the Property Appraiser are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for using a separate set of self-balancing accounts which comprise its assets, liabilities, fund equities, revenues, and expenditures. The various funds are grouped by type in the financial statements. The Property Appraiser utilizes the following governmental funds: General Fund The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Property Appraiser. All general operating revenues which are not restricted or designated as to use by outside sources are recorded in the General Fund. Special Revenue Fund The Special Revenue Funds are used to account for proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. (b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation 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. III-6

155 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) (b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued) Budgetary Requirements HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 The modified accrual basis of accounting is followed by the General Fund and the Special Revenue Fund. Revenues are recognized when they become measurable and available as net current assets. Expenditures are generally recognized when the related fund liability is incurred, if measurable, except expenditures for debt service and other long-term obligations which are recognized when paid. Expenditures of the General Fund are controlled by appropriations in accordance with the budgetary requirements set forth in the Florida Statutes. The budgeted revenues and expenditures in the accompanying financial statements reflect all amendments approved by the State of Florida Department of Revenue. The General Fund budget is prepared on the modified accrual basis of accounting. The Property Appraiser follows these procedures in establishing the budgetary data reflected in the financial statements: On or before June 1 of each year the Property Appraiser shall, concurrently submit an annual budget to the Florida Department of Revenue and to the Board of County Commissioners. Budgetary control is established at the functional level. On or before August 15 the Department shall make its final budget amendments or changes to the budget and shall provide notice thereof to the Property Appraiser and the Board of County Commissioners. The budget for the General Fund is adopted on a basis consistent with generally accepted governmental accounting principles. A budget was not adopted for the Special Revenue Fund, as it is not required. 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 Property Appraiser. III-7

156 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) (c) Assets, Liabilities, and Equity Compensated Absences Estimates Fund Balances HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 The Property Appraiser'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 leave. The liability shown in the County's financial statement has been accrued in accordance with this criteria. At September 30, 2015, the Property Appraiser had $82,693 in long-term compensated absences payable. "Statement of Government Accounting Standards Board Number 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 County's basic financial statements has been accrued in accordance with this criteria. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Property Appraiser 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. Assigned Unassigned Assigned fund balances are constrained by the Property Appraiser's intent to be used for specific purposes, but are neither restricted nor committed. Fund balance that has not been reported in any other classification. When both assigned and unassigned resources are available for use, it is the Property Appraiser's policy to use assigned resources first, then unassigned resources as needed. NOTE 2 - CASH AND INVESTMENTS During the fiscal year, cash consisted of an interest-bearing bank account. The funds in the bank account were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer by financial institutions which comply with the requirements of Florida statutes and have been designated as qualified public depositories by the State Treasurer. At September 30, 2015, the book balance of deposits was $175,155 for the Property Appraiser and the bank balance was $278,344. III-8

157 NOTE 2 - CASH AND INVESTMENTS, (Continued) NOTE 3 - AMOUNTS DUE TO FUNDING ENTITIES AND EXCESS FUNDS NOTE 4 - GENERAL LONG-TERM DEBT Changes in General Long-Term Debt Changes in the general long-term debt of the Property Appraiser for the year ended September 30, 2015, are summarized below: Compensated Absences General long-term debt at 10/1/2014 $ 73,757 Increase in accrued compensated absences 8,936 General long-term debt at 9/30/2015 $ 82,693 NOTE 5 - GENERAL FIXED ASSETS NOTE 6 - RETIREMENT PLAN Plan Description HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 Florida Statutes authorize the Property Appraiser to invest in the Local Government Surplus Funds Trust Fund administered by the State Treasurer; negotiable direct obligations of or obligations unconditionally guaranteed by the U.S. Government; interest bearing time deposits or savings accounts in financial institutions located in Florida and organized under Federal or Florida laws. Substantial funding for the operations of the Property Appraiser is provided by the Hendry County Board of County Commissioners. The amount of such funding is estimated in the budgeting process and by Statute, any excess of revenues over expenditures which would otherwise exist is returned to the appropriate funding entity and is, therefore, reflected as a liability and an operating transfer out in the accompanying financial statements. Tangible personal property used by the Property Appraiser in his operations is shown in the statement of net position of the Board of County Commissioners. In addition, office space used in the Property Appraiser's operations is provided at no cost by the Board of County Commissioners. The Property Appraiser's employees participate in the Florida Retirement System (FRS). As provided by Chapters 12I and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section , Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. III-9

158 NOTE 6 - RETIREMENT PLAN, (Continued) Plan Description, (Continued) As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments (where applicable), and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. Funding Policy Funding Policy HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July l, 2011, Regular class members who retire at or after age 62 with at least six years of credited service, or 30 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their fmal average compensation based on the five highest years of salary, for each year of credited service. Vested regular class members with less than 30 years of service may retire before age 62 and are entitled to a retirement benefit payable monthly also equal to 1.6% of their final average compensation for each year of credited service based on the five highest years of salary, with a 5% reduction for each year under age 62. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled on or after July 1, 2011, by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 or 33 years of service regardless of age. Also, the fmal average compensation for these members is based on the eight highest years of salary. All enrolled members of the FRS Pension Plan are required to contribute 3.0% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on statewide contribution rates. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular 7.37% and 7.26%; county elected officers 43.24% and 42.27%; senior management 21.14% and 21.43%; re-hired regular service 3.8% and 4.31%; and DROP participants 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Property Appraiser contributed to the plan an amount equal to 8.89% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is funded by required contributions from FRS participating employees as set forth by Florida Legislature, based on a percentage of gross compensation for all active FRS members. III-10

159 NOTE 6 - RETIREMENT PLAN, (Continued) Funding Policy, (Continued) HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Property Appraiser recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan and the defined contribution plan, amounting to $44,589, $10,443 and $60,664, respectively, for the fiscal year ended September 30, The Property Appraiser's payments after June 30, 2015, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $13,436, and $3,400, respectively. The Property Appraiser is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government-wide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - and amendment of GASE Statement No. 27, and GASE Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - and amendment of GASE Statement No. 68, effective October 1, The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida , or from the Web site NOTE 7 - OTHER POST-EMPLOYMENT BENEFITS Plan Description In accordance with Section , Florida Statutes, because the Property Appraiser provides medical plans to employees of the Property Appraiser and their eligible dependents, the Property Appraiser 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. III-11

160 NOTE 7 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Eligibility for Insurance Coverage Depending on the class of employee the following eligibility rules apply: Membership As of September 30, 2015, membership consisted of: Active Employees 18 Eligible Retirees - Covered Spouses - Funding Policy HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 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. Regular Class and Elected Officials - For employees enrolled in FRS prior to July 1, 2011, age 62, and 6 years of service or 30 years of service, regardless of age, is normal retirement, respectively. Employees may retire early at age 43 and 6 years of service. For employees enrolled in FRS on or after July 1, 2011, age 65, and 8 years of service or 33 years of service, regardless of age, is normal reitrement, respectively. Employees may retire early at age 43 and 8 years of service. Special Risk - For employees enrolled in FRS prior to July 1, 2011, age 55 and 6 years of service or 25 years of speical risk service, regardless, of age is normal retirement. Employees may retire early at age 36 and 6 years of service. For employees enrolled in FRS on ar after July 1, 2011, age 60 and 8 years of service or 30 years of special risk service, regardless of age, is normal retirement. Employees may retire early at at 36 and 8 years of service. 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. Currently, the Property Appraiser has no employees receiving benefits. III-12

161 NOTE 7 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Annual OPEB Costs and Net OPEB Obligation HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 Hendry County had an actuarial valuation performed for the plan as of October 1, 2013 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 Property Appraiser's annual OPEB cost for the fiscal year was set at $15,865, as the transition liability was set to zero as of September 30, The Property Appraiser's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation from 2015 is as follows: Fiscal Year Ended September 30, 2015 Annual % of Annual OPEB Employer OPEB Cost Net OPEB Cost Contributed Contributed Obligation $ 15,865 $ 4, % $ 81,123 The funded status of the plan as of September 30, 2015 was as follows: NOTE 8 - RISK MANAGEMENT Actuarial Accrued Liability (AAL) $ 111,155 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 111,155 Covered Payroll $ 554,129 Ration of UAAL to Covered Payroll 20% The Property Appraiser participates in the County-wide insurance program. The Hendry County, Florida, Board of County Commissioners 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, worker's 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-party carriers. The fund is fully funded annually. The premiums for this coverage are paid by the various Constitutional Officers and Board of County Commissioners on a per employee coverage basis. For fiscal year ended September 30, 2015, the Property Appraiser was charged $164,048. III-13

162 HENDRY COUNTY, FLORIDA PROPERTY APPRAISER Notes to Financial Statements September 30, 2015 NOTE 9 - CONTINGENCIES The Property Appraiser is involved from time to time in certain routine litigation, the substance of which as either liabilities or recoveries, would not materially affect the financial position of the Property Appraiser. Much of the present litigation involves appraised value issues, which depending on the final resolution, effect fees earned by the Property Appraiser and/or the loss or recovery of legal fees. The Property Appraiser is not in a position at this time to predict the final outcome of the lawsuits and claims or the exact amount of costs and/or potential recovery. The Property Appraiser plans to vigorously contest these matters unless first settled. NOTE 10 - COMMITMENTS The Property Appraiser entered into a license and service agreement with True Automation Incorporated for the purchase, installation, and training of the new appraising software. The Property Appraiser disbursed an initial payment of $25,000 upon signing the agreement on 09/29/2011 and two additional payments of $61,000 on 09/18/2013 and 09/28/2015. Contract payments are tentatively scheduled as follows: Commitment to True Automation, Inc. Purchase Order 1 - Licensed Software, Implementation and Training Item Description Payment Due Payment Initial payment upon execution of signed agreement PAID September, 2012 $ 25,000 PACS software PAID September, ,000 Hardware and third-party software PAID September, ,000 Acceptance February, ,789 Total Purchase Order 1 213,789 Less: payments made (147,000) $ 66,789 Purchase Order 2 - Maintenance agreement Maintenance payment 1 January 1 $ 5,850 Maintenance payment 2 April 1 5,850 Maintenance payment 3 July 1 5,850 Maintenance payment 4 October 1 5,850 Total Purchase Order 2 23,400 Total Commitment to True Automation, Inc. $ 237,189 III-14

163 REQUIRED SUPPLEMENTARY INFORMATION

164 HENDRY COUNTY, FLORIDA PROPERTY APPRAISER GENERAL FUND Schedule of Revenues, Expendituress and Changes in Fund Balances- Budget and Actual For the Fiscal Year Ended September 30, 2015 Variance with Final Budget Original Budget Final Budget Actual Positive (Negative) Revenues Charges for Services $ 1,228,483 $ 1,228,483 $ 1,228,483 $ - Miscellaneous Total Revenues 1,228,483 1,228,483 1,229, Expenditures General Government Personal Services 999, , ,447 14,536 Operating Expenditures 163, , ,434 22,066 Non-Operating 65,000 65,000 61,000 4,000 Total Expenditures 1,228,483 1,228,483 1,187,881 40,602 Excess of revenues over expenditures ,233 41,233 Other financing sources (uses) Operating transfers out - - (41,233) (41,233) Total other financing sources (uses) - - (41,233) (41,233) Excess of revenues and other sources over (under) expenditures and other uses Fund balances - October 1, Fund balances - September 30, 2015 $ - $ - $ - $ - III-15

165 366 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 Phillip L. Pelletier Hendry County Property Appraiser 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 the major fund and the aggregate remaining fund information of the Hendry County, Florida, Property Appraiser, (the "Property Appraiser") as of and for the fiscal year ended September 30, 2015, and the related notes to the special-purpose financial statements, which collectively comprise the Property Appraiser's special-purpose financial statements, and have issued our report thereon dated June 6, Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Property Appraiser'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 Property Appraiser s internal control. Accordingly, we do not express an opinion on the effectiveness of the Property Appraiser 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. III-16

166

167 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Phillip L. Pelletier Hendry County Property Appraiser LaBelle, Florida Report on the Financial Statements We have audited the special-purpose financial statements of the Hendry County, Florida, Property Appraiser, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated June 6, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 6, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings and recommendations made in the preceding annual financial audit report. III-18

168

169

170 III-21

171 HENDRY COUNTY, FLORIDA SHERIFF September 30, 2015 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

172

173 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report Honorable Steve Whidden Hendry County Sheriff 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, Sheriff, (the "Sheriff") as of and for the fiscal year ended September 30, 2015, as listed in the table of contents. We also have audited the financial statements of each of the Sheriff's agency funds as of and for the fiscal year ended September 30, 2015, 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. Accordingly, we express no such opinion. IV-1

174 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 Sheriff. Additionally, the special-purpose financial statements present only the Sheriff 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 Sheriff 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 Sheriff as of September 30, 2015 and the respective changes thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle As described in Note 3 to the special-purpose financial statements, effective October 1, 2014, the Clerk adopted the provisions of Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 18 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. IV-2

175

176 HENDRY COUNTY, FLORIDA SHERIFF Balance Sheet - Governmental Funds September 30, 2015 General Commissary Non-Major Total ASSETS Cash $ 655,404 $ 280,782 $ 22,315 $ 958,501 Accounts Receivable - 5,127-5,127 Due from other Funds 4,377 6,424-10,801 Due from other Governments 60, ,723 Total Assets $ 720,504 $ 292,333 $ 22,315 $ 1,035,152 LIABILITIES AND FUND EQUITY Liabilities Accounts Payable $ 88,758 $ 5,508 $ - $ 94,266 Accrued Liabilities 560, ,382 Deferred Revenue 48, ,042 Due to other Funds - 4,377-4,377 Due to other Governments 23, ,322 Total Liabilities 720,504 9, ,389 Fund Equity Fund Balance Assigned ,315 22,315 Restricted - 282, ,448 Total Fund Equity - 282,448 22, ,763 Total Liabilities and Fund Equity $ 720,504 $ 292,333 $ 22,315 $ 1,035,152 See accompanying notes. IV-4

177 HENDRY COUNTY, FLORIDA SHERIFF Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2015 General Fund Non-Major Governmental Total Governmental Funds Commissary Revenues Intergovernmental $ 316,837 $ - $ - $ 316,837 Charges for Services 341,730-8, ,455 Fines and Forfeitures - - 6,562 6,562 Interest ,283 Commission - 144, ,850 Miscellaneous 43, ,872 Total Revenues 703, ,265 15, ,859 Expenditures Law Enforcement Personal Services 6,566, ,566,030 Operating Expenditures 1,464,222-5,763 1,469,985 Capital Outlay 497, ,521 Debt Service Principal 374, ,323 Interest 11, ,185 Corrections Personal Services 2,477, ,477,399 Operating Expenditures 613, ,973 Capital Outlay Judicial Personal Services 246, ,348 Commissary Personal Services - 54,565-54,565 Operating Expenditures - 31,981-31,981 Capital Outlay - 10,342-10,342 Total Expenditures 12,251,001 96,888 5,763 12,353,652 Excess of Revenues Over (Under) Expenditures (11,547,722) 48,377 9,552 (11,489,793) Proceeds from financing 376, ,714 Operating Transfers in 11,194, ,194,330 Operating Transfers out (23,322) - (10,000) (33,322) Total other Financing Sources (Uses) 11,547,722 - (10,000) 11,537,722 Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses - 48,377 (448) 47,929 Fund Balance - October 1, ,071 22, ,834 Fund Balance - September 30, 2015 $ - $ 282,448 $ 22,315 $ 304,763 See accompanying notes. IV-5

178 HENDRY COUNTY, FLORIDA SHERIFF Statement of Fiduciary Assets and Liabilities- Agency Funds September 30, 2015 Mounted Patrol Impound Fees Special Fund Relief Fund Employee Fund ASSETS Cash $ 99 $ 2,858 $ 50 $ 1,880 $ 22,966 Total Assets $ 99 $ 2,858 $ 50 $ 1,880 $ 22,966 LIABILITIES Due to Other Governments $ - $ 2,858 $ - $ - $ - Due to Other Funds Due to Individuals ,880 22,966 Total Liabilities $ 99 $ 2,858 $ 50 $ 1,880 $ 22,966 See accompanying notes. IV-6

179 HENDRY COUNTY, FLORIDA SHERIFF Statement of Fiduciary Assets and Liabilities- Agency Funds September 30, 2015 Suspense Fine and Cost Inmate Operating Account D.A.R.E Program Explorer Program ASSETS Cash $ 51,152 $ 50 $ 23,432 $ 10,885 $ 4,436 Total Assets $ 51,152 $ 50 $ 23,432 $ 10,885 $ 4,436 LIABILITIES Due to Other Governments $ - $ - $ 3,975 $ - $ - Due to Other Funds - - 6, Due to Individuals 51, ,033 10,885 4,436 Total Liabilities $ 51,152 $ 50 $ 23,432 $ 10,885 $ 4,436 See accompanying notes. IV-7

180 HENDRY COUNTY, FLORIDA SHERIFF Statement of Fiduciary Assets and Liabilities- Agency Funds September 30, 2015 Auxiliary Fund Total Fidicuary Funds ASSETS Cash $ 8,275 $ 126,083 Total Assets $ 8,275 $ 126,083 LIABILITIES Due to Other Governments $ - $ 6,833 Due to Other Funds - 6,424 Due to Individuals 8, ,826 Total Liabilities $ 8,275 $ 126,083 See accompanying notes. IV-8

181 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity (a) Fund Accounting Governmental Funds General Fund Special Revenue Funds HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 The Sheriff is an elected constitutional officer of Hendry County, a political subdivision of the State of Florida. The position of Sheriff was established by Article VIII, Section 1(d) of the Constitution of the State of Florida. The duties and responsibilities of the Sheriff are concerned with law enforcement, judicial process and corrections. The operations are financed by appropriations made by the Board of County Commissioners pursuant to the approved budget. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the Sheriff and its component units. Component units are entities for which the government is considered to be financially accountable. Financial accountability is determined on the basis of the Sheriff's ability to significantly influence operations, select the governing authority and participate in fiscal management. Based on the application of the criteria set forth by the Governmental Accounting Standards Board, management has determined that no component units exist which would require inclusion in these financial statements. The accounts of the Sheriff 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. The various funds are grouped by type in the financial statements. The Sheriff utilizes the following funds: The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Sheriff 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, are shown as operating transfers out. Special Revenue Funds are operating funds used to account for revenues (other than expendable trusts or capital projects), the use of which is restricted or designated. The Commissary Fund is used to account for the receipts and disbursements relating to the inmates of the Hendry County Jail. This fund is restricted to purchases of items for the benefit of the inmates. IV-9

182 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 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 balance (net current assets) is 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. Basis of Accounting 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. Budgetary Process HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 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. All governmental and agency funds are accounted for using the modified accrual basis of accounting. All revenues are recognized when they become measurable and available as net current position. Chapter 30, of the Florida Statutes, governs the preparation, adoption and administration process of the District's annual budget. A budget is only required to be prepared for the General Fund. The budget and amendments, if any, for the General Fund are required to be submitted to and approved by the Board of County Commissioners. The budget is prepared on the modified accrual basis. The level of control for appropriations is exercised at the functional level. As the Sheriff's Office does not have a legally adopted budget for the Commissary Special Revenue fund, a budgetary comparison for this fund is not presented. IV-10

183 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) 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 Sheriff. (c) Assets, Liabilities, and Equity Capital Assets Acquisitions of tangible personal property are recorded as expenditures at the time of purchase. These assets are reported to the Board of County Commissioners and are recorded in the County's basic financial statements. Compensated Absences It is the Sheriff's policy to permit employees to accumulate a limited amount of earned, but unused, sick and annual leave, which will be paid upon separation of service. Vacation is accrued as a liability when benefits are earned by the employee. The Sheriff uses the vesting method to accrue sick leave liability. The vesting method accrues sick leave liability for employees who are currently eligible to receive termination payments upon separation as well as those expected to become eligible in the future. As of September 30, 2015, the Sheriff had $1,062,000. in long-term compensated absences payable. This amount is reported in the government-wide financial statements of Hendry County, Florida. 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. Fund Balances HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 Spendable fund balances are classified based on a hierarchy of the Sheriff s ability to control the spending of these fund balances. Restricted fund balances are fund balance amounts that are constrained for specific purposes which are externally imposed by creditors, grantors, contributors, or laws or regulations or imposed by law through constitutional provisions or enabling legislation. As of September 30, 2015, the Sheriff had $282,448 in restricted cash in the Commissary Special Revenue. This amount is restricted to purchases of items for the benefit of the inmates at Hendry County Jail. IV-11

184 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) Estimates HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 Committed fund balances are fund balances constrained for specific purposes imposed by the Sheriff s formal action of highest level of decision making authority. As of September 30, 2015, the Sheriff had no committed fund balances. Assigned fund balances are fund balances intended to be used for specific purposes, but which are neither restricted nor committed. Unassigned fund balances represent the residual positive fund balance within the General Fund, which has not been assigned to other funds and has not been restricted, committed or assigned. In funds other than the General Fund, unassigned fund balances are limited to negative residual balances. As of September 30, 2015, the Sheriff had no unassigned fund balances because all excess revenues within the general fund are required to be remitted to the Board and there were no negative residual balances in the special revenue fund. When both assigned and unassigned resources are available for use, it is the Sheriff's policy to use assigned resources first, then unassigned resources as needed. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management of the Sheriff 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. NOTE 2 - CASH AND INVESTMENTS Cash At September, , the carrying amount of the Sheriff's deposits was $1,352,021 and the bank balance was $1,084,483. The Sheriff held petty cash on hand as of September 30, 2015 in the amount of $100. These deposits were entirely covered during the year and at year-end by federal depository insurance or by collateral pursuant to the Public Depository Act of the State of Florida (Florida Statute Chapter 280). All Sheriff depositories are banks designated as qualified depositories by the State Treasurer. Investments Florida Statutes authorize the Sheriff to invest in the Local Government Surplus Funds Trust Fund administered by the State Treasurer; negotiable direct obligations of or obligations unconditionally guaranteed by the U.S. Government; interest-bearing time deposits or savings accounts in financial institutions located in Florida and organized under Federal or Florida laws; securities of any open-end or closed-end management type investment company or investment trust registered under the Investment Act of 1940 provided the portfolio is limited to United States Government obligations. The Sheriff did not have any investments during the year or at year end. IV-12

185 NOTE 3 - GENERAL FIXED ASSETS HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 Beginning Ending Balance Balance Changes in general fixed assets are as follows: 10/1/2014 Increases Decreases 9/30/2015 Equipment $ 6,115,703 $ 567,577 $ (422,705) $ 6,260,575 Less: Accumulated Depreciation (4,457,874) (553,498) 419,109 (4,592,263) Total Equipment being depreciated, net $ 1,657,829 $ 14,079 $ (3,596) $ 1,668,312 NOTE 4 - COMMITMENTS Operating Leases On September 20, 2013, the 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, The balance at September 30, 2015 was $ 82,283 Total Operating Leases $ 82,283 The annual commitments requirement for operating leases at September 30, 2015, were as follows: Operating Lease - Commitments Fiscal Year(s) Principal Interest Total 2016 $ 41,891 $ 7,821 $ 49, ,392 7,610 48,002 $ 82,283 $ 15,431 $ 97,714 IV-13

186 HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 NOTE 5- LONG-TERM DEBT Capital Leases On August 15, 2013, the 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 $66,953. Final payment due September 15, The balance at September 30, 2015 was On September 20, 2013 the 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, The balance at September 30, 2015 was On January 7, 2015 the Sheriff entered into a leasing agreement for one 2015 Ford Interceptor SUV for $51,293 bearing interest at a rate of 6.50%, requiring quarterly payments of $3,666. Final payment due January 7, The balance at September 30, 2015 was On January 23, 2015 the Sheriff entered into a leasing agreement for van for the jail for $36,649 bearing interest at a rate of 6.50%, requiring quarterly payments of $2,620. Final payment due January 23, The balance at September 30, 2015 was On January 7, 2015 the Sheriff entered into a leasing agreement for eight police interceptor sedans for $324,959 bearing interest at a rate of 6.50%, requiring quarterly payments of $23,228. Final payment due January 7, The balance at September 30, 2015 was $ 133,186 94,027 45,581 32, ,772 TOTAL LONG-TERM DEBT - Capital Leases $ 594,133 The annual debt service requirements for capital leases at September 30, 2015, were as follows: Capital Leases Fiscal Year(s) Principal Interest Total 2016 $ 210,136 $ 37,846 $ 247, ,564 31, , ,814 8, , ,619 1,409 59,028 $ 594,133 $ 78,915 $ 673,048 IV-14

187 NOTE 5- LONG-TERM DEBT, (Continued) HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 Changes in long-term liabilities for the year ended September 30, 2015, was as follows: Beginning Ending Balance Balance Due Within 10/1/2014 Additions Reductions 9/30/2015 One Year Capital Leases $ 513,665 $ 412,901 $ (332,433) $ 594,133 $ 210,136 Other Post Employment Benefits 658,554 44, ,810 - Compensated absences 943, ,052-1,062,000 - $ 2,116,167 $ 575,209 $ (332,433) $ 2,358,943 $ 210,136 NOTE 6 - RETIREMENT PLAN Plan Description The Sheriff's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Service, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section , Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July l, 2011, Regular class members who retire at or after age 62 with at least six years of credited service, or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested regular class members with less than 30 years of service may retire before age 62 and are entitled to a retirement benefit payable monthly also equal to 1.6% of their final average compensation for each year of credited service based on the five highest years of salary, with a 5% reduction for each year under age 62. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled on or after July 1, 2011 by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 or 33 years of service regardless of age. Also, the final average compensation for these members is based on the eight highest years of salary. IV-15

188 NOTE 6 - RETIREMENT PLAN, (Continued) Funding Policy HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 All enrolled members of the FRS Pension Plan are required to contribute 3.0% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on statewide contribution rates. The employer contribution rates by job class for the periods from October 1, 2015 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular 7.37% and 7.26%; county elected officers 43.24% and 42.27%; senior management 21.14% and 21.43%; and DROP participants 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Sheriff contributed to the plan an amount equal to 15.5% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is funded by required contributions from FRS participating employees as set forth by Florida Legislature, based on a percentage of gross compensation for all active FRS members. For those members who elect participation in the Investment plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.) as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved instrument choices. Costs of administering the plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Sheriff recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan, and the defined contribution plan, amounting to $753,734, $85,638, and $223,585, respectively, for the fiscal year ended September 30, The Sheriff's payments after June 30, 2015, the measurement date used to determine net pension liability associated with the Pension Plan and the HIS Plan, amounted to $240,899 and $28,395, respectively. The Sheriff is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government-wide financial statements of the County, following requirements of GASB No. 68, Accounting and Financial Reporting for Pensions- an amendment of GASB No. 27, and GASB No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date- an amendment of GASB No. 68, effective October 1, IV-16

189 NOTE 6 - RETIREMENT PLAN, (Continued) HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida, P.O. Box 9000, Tallahassee, Florida , or from the Web site: NOTE 7 - CONTINGENT LIABILITIES The Sheriff, in accordance with the normal conduct of its affairs, is involved in various judgments, claims and litigations. It is expected that the final settlement of these matters will not materially affect the financial statements of the Sheriff. NOTE 8 - RELATED PARTY TRANSACTIONS The Sheriff is a constitutional county officer whose appropriations are approved by the Board of County Commissioners. The Board has agreed to provide certain operating expenditures for the Sheriff. The Board paid all property and casualty insurance and workers' compensation premiums for the Sheriff. NOTE 9 - RISK MANAGEMENT The Sheriff is exposed to various risk of loss related to torts; theft of, or damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Sheriff is a member of a public entity risk pool which is a cooperative group of governmental entities joining together to finance an exposure, liability, or risk. The pool provides coverage for, liability, public officials liability automobile physical damage, general liability, and automobile liability. The costs of the property and casualty insurance and workers' compensation are accounted for in the General Fund of the Board of County Commissioners. The Sheriff provides hospitalization and medical coverage through the Public Risk Management of Florida Group Health Trust. A loss fund is established to pay a self-insured retention amount of $50,000 per person. Any claims in excess of this limit are paid by aggregate and stop loss insurance. IV-17

190 NOTE 10 - OTHER POST-EMPLOYMENT BENEFITS Plan Description Eligibility for Insurance Coverage Depending on the class of employee the following eligibility rules apply: Membership As of September 30, 2015, membership consisted of: Active Employees 131 Eligible Retirees 8 Covered Spouses - Funding Policy HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 In accordance with Section , Florida Statutes, because the Sheriff provides medical plans to employees of the Sheriff and their eligible dependents, the Sheriff 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. 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. Regular Class and Elected Officials - For employees enrolled in FRS prior to July 1, 2011, age 62, and 6 years of service or 30 years of service, regardless of age, is normal retirement, respectively. Employees may retire early at age 43 and 6 years of service. For employees enrolled in FRS on or after July 1, 2011, age 65, and 8 years of service or 33 years of service, regardless of age, is normal reitrement, respectively. Employees may retire early at age 43 and 8 years of service. Special Risk - For employees enrolled in FRS prior to July 1, 2011, age 55 and 6 years of service or 25 years of speical risk service, regardless, of age is normal retirement. Employees may retire early at age 36 and 6 years of service. For employees enrolled in FRS on ar after July 1, 2011, age 60 and 8 years of service or 30 years of special risk service, regardless of age, is normal retirement. Employees may retire early at at 36 and 8 years of service. 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. Currently, the Sheriff has no employees receiving benefits. IV-18

191 NOTE 10 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Annual OPEB Costs and Net OPEB Obligation HENDRY COUNTY, FLORIDA SHERIFF Notes to Financial Statements September 30, 2015 Hendry County had an actuarial valuation performed for the plan as of October 1, 2013 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 Sheriff's annual OPEB cost for the fiscal year was set at $160,013, as the transition liability was set to zero as of September 30, The Sheriff's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation from 2015 is as follows: Fiscal Year Ended September 30, 2015 Annual % of Annual OPEB Employer OPEB Cost Net OPEB Cost Contributed Contributed Obligation $ 137,449 $ 35, % $ 702,810 The funded status of the plan as of September 30, 2015 was as follows: Actuarial Accrued Liability (AAL) $ 962,990 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 962,990 Covered Payroll $ 4,800,690 Ration of UAAL to Covered Payroll 20% IV-19

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193 REQUIRED SUPPLEMENTARY INFORMATION

194 HENDRY COUNTY, FLORIDA SHERIFF Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund, Non-GAAP Basis For the Fiscal Year Ended September 30, 2015 Original Budget Final Budget Variance with Final Budget Positive (Negative) Actual Revenues Intergovernmental $ - $ 352,046 $ 316,837 $ (35,209) Charges for Services - 306, ,730 35,709 Miscellaneous - 44,695 44, Total Revenues - 702, , Expenditures Law Enforcement Personal Services 6,391,263 6,596,310 6,566,030 30,280 Operating Expenditures 1,038,000 1,494,773 1,464,222 30,551 Capital Outlay 162, , ,807 (12,180) Debt Service 85, , ,508 (49,669) Contingency 30,000 23,826-23,826 Total Law Enforcement 7,706,348 8,559,375 8,536,567 22,808 Corrections Personal Services 2,392,327 2,477,398 2,477,399 (1) Operating Expenditures 801, , ,973 (8,019) Capital Outlay 28, Contingency 20,000 8,018-8,018 Total Corrections 3,242,027 3,091,370 3,091,372 (2) Judicial Personal Services 245, , ,348 (1) Total Judicial 245, , ,348 (1) Total Expenditures 11,194,330 11,897,092 11,874,287 22,805 Excess of Revenues Over (Under) Expenditures (11,194,330) (11,194,330) (11,171,008) 23,322 Other Financing Sources (Uses) Proceeds from Financing Operating Transfers in 11,194,330 11,194,330 11,194,330 - Operating Transfers out - - (23,322) (23,322) Total other Financing Sources (Uses) 11,194,330 11,194,330 11,171,008 (23,322) Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses Fund Balance - October 1, Fund Balance - September 30, 2015 $ - $ - $ - $ - Note- The Sheriff did not include in the budget, amounts borrowed and expended for the lease of vehicles in the amount of $376,714, as it was a non-cash transaction that did not require additional transfers in from the Hendry County Board of County Commissioners. The actual law enforcement capital outlay expense as indicated above in the amount of $120,807 in addition to the $376,714 non-budgeted amounts equals the total for law enforcement capital outlay of $497,521 as indicated in the Statement of Revenues, Expenditures, Changes in Fund Balance on page 5. IV-20

195 HENDRY COUNTY, FLORIDA SHERIFF Combining Balance Sheet Non-Major Governmental Funds September 30, 2015 ASSETS Training Fund Federal Equitable Sharing Program Fund Gun Range Total Cash $ 3,246 $ 2,719 $ 16,350 $ 22,315 Total assets $ 3,246 $ 2,719 $ 16,350 $ 22,315 FUND EQUITY Fund Equity Fund Balances Assigned $ 3,246 $ 2,719 $ 16,350 $ 22,315 Total Fund Equity $ 3,246 $ 2,719 $ 16,350 $ 22,315 IV-21

196 HENDRY COUNTY, FLORIDA SHERIFF Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Non-Major Governmental Funds For the Year Ended September 30, 2015 Training Fund Federal Equitable Sharing Program Fund Gun Range Total Revenues Charges for Services $ - $ - $ 8,725 $ 8,725 Collections 6, ,562 Interest Total Revenues 6, ,740 15,315 Expenditures Operating Expenses 1,772-3,991 5,763 Total Expenditures 1,772-3,991 5,763 Excess of Revenues Over (Under) Expenditures 4, ,749 9,552 Fund Balances - October 1, ,446 2,716 11,601 22,763 Transfers out (10,000) - - (10,000) Fund Balances - September 30, 2015 $ 3,246 $ 2,719 $ 16,350 $ 22,315 IV-22

197 HENDRY COUNTY, FLORIDA SHERIFF Combining Statement of Changes in Assets and Liabilities - Agency Funds For the Year Ended September 30, 2015 Balance, 10/01/14 Additions Deductions Balance, 9/30/15 Mounted Patrol Assets Cash $ 99 $ - $ - $ 99 Total assets $ 99 $ - $ - $ 99 Liabilities Due to Individuals $ 99 $ - $ - $ 99 Total Liabilities $ 99 $ - $ - $ 99 Impound Fees Assets Cash $ 1,737 $ 5,368 $ 4,247 $ 2,858 Total assets $ 1,737 $ 5,368 $ 4,247 $ 2,858 Liabilities Due to other Governments $ 1,737 $ 5,368 $ 4,247 $ 2,858 Total Liabilities $ 1,737 $ 5,368 $ 4,247 $ 2,858 Special Fund Assets Cash $ 101 $ 4,669 $ 4,720 $ 50 Total assets $ 101 $ 4,669 $ 4,720 $ 50 Liabilities Due to Individuals $ 101 $ 4,669 $ 4,720 $ 50 Total Liabilities $ 101 $ 4,669 $ 4,720 $ 50 IV-23

198 HENDRY COUNTY, FLORIDA SHERIFF Combining Statement of Changes in Assets and Liabilities - Agency Funds For the Year Ended September 30, 2015 Balance, 10/01/14 Additions Deductions Balance, 9/30/15 Relief Fund Assets Cash $ 1,878 $ 2 $ - $ 1,880 Total assets $ 1,878 $ 2 $ - $ 1,880 Liabilities Due to Individuals $ 1,878 $ 2 $ - $ 1,880 Total Liabilities $ 1,878 $ 2 $ - $ 1,880 Employee Flower Fund Assets Cash $ 13,011 $ 33,748 $ 23,793 $ 22,966 Total assets $ 13,011 $ 33,748 $ 23,793 $ 22,966 Liabilities Due to Individuals $ 13,011 $ 33,747 $ 23,792 $ 22,966 Total Liabilities $ 13,011 $ 33,747 $ 23,792 $ 22,966 Suspense Assets Cash $ 51,441 $ 123,591 $ 123,880 $ 51,152 Total assets $ 51,441 $ 123,591 $ 123,880 $ 51,152 Liabilities Due to Individuals $ 51,441 $ 123,591 $ 123,880 $ 51,152 Total Liabilities $ 51,441 $ 123,591 $ 123,880 $ 51,152 IV-24

199 HENDRY COUNTY, FLORIDA SHERIFF Combining Statement of Changes in Assets and Liabilities - Agency Funds For the Year Ended September 30, 2015 Balance, 10/01/14 Additions Deductions Balance, 9/30/15 Fine and Cost Assets Cash $ 50 $ - $ - $ 50 Total assets $ 50 $ - $ - $ 50 Liabilities Due to Individuals $ 50 $ - $ - $ 50 Total Liabilities $ 50 $ - $ - $ 50 Inmate Operating Assets Cash $ 20,569 $ 463,623 $ 460,760 $ 23,432 Total assets $ 20,569 $ 463,623 $ 460,760 $ 23,432 Liabilities Due to Other Funds $ 6,456 $ 116,564 $ 116,596 $ 6,424 Due to Other Governments 8,166 40,902 45,093 3,975 Due to Individuals 5, , ,071 13,033 Total Liabilities $ 20,569 $ 462,623 $ 459,760 $ 23,432 D.A.R.E. Program Assets Cash $ 3,427 $ 9,027 $ 1,569 $ 10,885 Total assets $ 3,427 $ 9,027 $ 1,569 $ 10,885 Liabilities Due to Individuals $ 3,427 $ 9,027 $ 1,569 $ 10,885 Total Liabilities $ 3,427 $ 9,027 $ 1,569 $ 10,885 IV-25

200 HENDRY COUNTY, FLORIDA SHERIFF Combining Statement of Changes in Assets and Liabilities - Agency Funds For the Year Ended September 30, 2015 Balance, 10/01/14 Additions Deductions Balance, 9/30/15 Explorer Program Assets Cash $ 670 $ 7,121 $ 3,355 $ 4,436 Total assets $ 670 $ 7,121 $ 3,355 $ 4,436 Liabilities Due to Individuals $ 670 7,121 3,355 $ 4,436 Total Liabilities $ 670 $ 7,121 $ 3,355 $ 4,436 Auxiliary Fund Assets Cash $ 8,267 $ 8 $ - $ 8,275 Total assets $ 8,267 $ 8 $ - $ 8,275 Liabilities Due to Individuals $ 8,267 $ 8 $ - $ 8,275 Total Liabilities $ 8,267 $ 8 $ - $ 8,275 Totals - Agency Funds Assets Cash $ 101,250 $ 647,157 $ 622,324 $ 126,083 Total assets $ 101,250 $ 647,157 $ 622,324 $ 126,083 Liabilities Due to Other Funds $ 6,456 $ 116,564 $ 116,596 $ 6,424 Due to Other Governments 9,903 46,270 49,340 6,833 Due to Individuals 84, , , ,826 Total Liabilities $ 101,250 $ 646,156 $ 621,323 $ 126,083 IV-26

201 366 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 Steve Whidden Hendry County Sheriff 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 the major fund and the aggregate remaining fund information of the Hendry County, Florida, Sheriff, (the "Sheriff") as of and for the fiscal year ended September 30, 2015, and the related notes to the special-purpose financial statements, which collectively comprise the Sheriff'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 Sheriff's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff s internal control. Accordingly, we do not express an opinion on the effectiveness of the Sheriff s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. IV-27

202

203 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Steve Whidden Hendry County Sheriff LaBelle, Florida Report on the Financial Statements We have audited the special-purpose financial statements of the Hendry County, Florida, Sheriff, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated June 20, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 20, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. IV-29

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205 Hendry County Sheriff Office Management Letter Fiscal Year Ended September 30, 2015 APPENDIX A- PRIOR YEAR FINDINGS AND RECOMMENDATIONS Prior Year Findings Finding Reference # Comment Budgetary Control Cleared X Current Year Status Partially Not Cleared Cleared IV-31

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209 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS September 30, 2015 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

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211 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report Honorable Brenda K. Hoots Hendry County Supervisor of Elections LaBelle, Florida Report on the Financial Statements We have audited the accompanying special-purpose financial statements of the major fund and the aggregate remaining fund information of the Hendry County, Florida, Supervisor of Elections, (the "Supervisor of Elections") as of and for the fiscal year ended September 30, 2015, 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. 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. V-1

212 Auditor's Responsibility, continued 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 Supervisor of Elections. Additionally, the special-purpose financial statements present only the Supervisor of Elections 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 Supervisor of Elections in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle As described in Note 5 to the financial statements, effective October 1, 2014, the District adopted the provisions of Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 13 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. V-2

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214 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Balance Sheet - Governmental Funds September 30, 2015 Governmental Funds General Fund Federal Election Activities Fund Total Governmental Funds ASSETS Cash $ 2,744 $ 6,059 $ 8,803 Prepaid expenses 19,931-19,931 Total assets $ 22,675 $ 6,059 $ 28,734 LIABILITIES AND FUND EQUITY Liabilities Due to the Board of County Commissioners $ 22,675 $ - $ 22,675 Unearned Revenue - 6,039 6,039 Total liabilities 22,675 6,039 28,714 Fund equity Fund balance Total fund equity Total liabilities and fund equity $ 22,675 $ 6,059 $ 28,734 V-4

215 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2015 General Fund Federal Election Activities Fund Total Governmental Funds Revenues Miscellaneous $ 5,140 $ - $ 5,140 Interest Total revenues 5, ,320 Expenditures Governmental expenditures 440, ,305 Excess of revenues under expenditures (435,005) 20 (434,985) Other financing sources (uses) Operating transfers in 457, ,680 Operating transfers out (22,675) - (22,675) Total other financing sources (uses) 435, ,005 Excess of revenues and other sources over (under) expenditures and other uses Fund balance - October 1, Fund balance - September 30, 2015 $ - $ 20 $ 20 V-5

216 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Reporting Entity The Supervisor of Elections is an elected Constitutional Officer of Hendry County ("County"), a political subdivision of the State of Florida. The position of Supervisor of Elections was established by Article VIII, Section 1 (d) of the State of Florida Constitution. The general powers and responsibilities of the Supervisor of Elections are specified in Chapters 97 through Florida Statutes. The Supervisor of Elections is charged with the conduct of elections within the County, except certain independent special district elections separately provided for by special acts. The operations are financed by appropriations made by the Board of County Commissioners pursuant to the approved budget. As required by accounting principles generally accepted in the United States of America, the financial statements of the reporting entity include those of the Supervisor of Elections and its component units. Component units are entities for which the government is considered to be financially accountable. Financial accountability is determined on the basis of the Supervisor of Election's ability to significantly influence operations, select the governing authority, and participate in fiscal management. Based on application of the criteria set forth by the Governmental Accounting Standards Board, management has determined that no component units exist which would require inclusion in these financial statements. Fund Accounting The accounts of the Supervisor of Elections are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for using a separate set of selfbalancing accounts which comprise its assets, liabilities, fund equities, revenues, and expenditures. General Fund The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Supervisor of Elections. All general operating revenues which are not restricted or designated as to use by outside sources are recorded in the General Fund. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. 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 timingof the measurements made, regardless of the measurement focus applied. V-6

217 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Basis of Accounting, (Continued) All governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Expenditures are generally recognized when the related fund liability is incurred, if measurable, except expenditures for debt service, and other long-term obligations which are recognized when paid. Budgetary Requirements Expenditures of the General Fund are controlled by appropriations in accordance with the budgetary requirements set forth in the Florida Statutes. The budgeted revenues and expenditures in the accompanying financial statements reflect all amendments approved by the Board of County Commissioners. The Supervisor of Elections follows these procedures in establishing the budgetary data reflected in the financial statements: 1. On or before June 1 of each year the Supervisor of Elections shall submit to the Board of County Commissioners a tentative budget for the ensuing fiscal year. Budgetary control is established at the fund level Public hearings are held by the Board to obtain taxpayer comments and possible adjustments by the Board. The Board of County Commissioners may amend, modify, increase, or reduce any or all items of expenditures in the proposed budget submitted by the Supervisor of Elections by giving written notices of its actions, after approval of the budget. 4. Prior to October 1, the budget is legally enacted by the Board. 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 monies are recorded in order to reserve that portion of the applicable appropriation, is not employed by the Supervisor of Elections. Compensated Absences It is the Supervisor of Election's policy to permit employees to accumulate a limited amount of earned, but unused, vacation and sick leave, which will be paid upon separation of service. Vacation is accrued as a liability when benefits are earned by the employee. The Supervisor of Elections uses the vesting method in accruing sick leave liability. The vesting method accrues sick leave liability for employees who are currently eligible to receive termination payments upon separation, as well as those expected to become eligible in the future. For the fiscal year ended September 30, 2015, the amount of accrued compensated absences was $12,540. V-7

218 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Compensated Absences, (Continued) "Statement of Government Accounting Standards Board Number 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 Board's financial statement has been accrued in accordance with this criteria. NOTE 2 - CASH AND INVESTMENTS During the fiscal year, cash consisted of interest-bearing bank accounts. The funds in the bank accounts were entirely covered by Federal Depository Insurance Corporation or by a collateral pool pledged to the State Treasurer by financial institutions which comply with the requirements of Florida statutes and have been designated as qualified public depositories by the State Treasurer. Florida Statutes authorize the Supervisor of Elections to invest in the Local Government Surplus Funds Trust Fund administered by the State Treasurer; negotiable direct obligations of or obligations unconditionally guaranteed by the U.S. Government; interest bearing time deposits or savings accounts in financial institutions located in Florida and organized under Federal or Florida laws. At September, , the carrying amount of the Supervisor of Elections' deposits was $8,803, the bank balance was $34,602. These deposits were entirely covered during the year and year-end by federal depository insurance or by collateral pursuant to the Florida Security for Public Deposits Act of the State of Florida (Florida Statutes Chapter 280). The banks used by the Supervisor are banks designated as qualified depositories by the State Treasurer. NOTE 3 - AMOUNT TO BE REMITTED TO BOARD OF COUNTY COMMISSIONERS Funding for the operations of the Supervisor of Elections, accounted for in the General Fund, is provided by the Hendry County Board of County Commissioners. The amount of such funding is estimated in the budgeting processand by Statute, any excess of revenues and transfers over expenditures in the General Fund are returned to the Board of County Commissioners. Such excess, if any, is reflected as an operating transfer out in the accompanying financial statements. NOTE 4 - GENERAL FIXED ASSETS Tangible personal property used by the Supervisor of Elections is shown in the statement of net position of the Board of County Commissioners. In addition, office space used in the Supervisor of Election's operations is provided at no cost by the Board of County Commissioners. V-8

219 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 NOTE 5 - RETIREMENT PLAN Plan Description The Supervisor of Election's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Service, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section , Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service, or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested regular class members with less than 30 years of service may retire before age 62 and are entitled to a retirement benefit payable monthly also equal to 1.6% of their final average compensation for each year of credited service based on the five highest years of salary, with a 5% reduction for each year under age 62. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled on or after July 1, 2011 by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 or 33 years of service regardless of age. Also, the final average compensation for these members is based on the eight highest years of salary. Funding Policy All enrolled members of the FRS Pension Plan are required to contribute 3.0% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on statewide contribution rates. The employer contribution rates by job class for the periods from October 1, 2015 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular 7.37% and 7.26%; county elected officers 43.24% and 42.27%; senior management 21.14% and 21.43%; and DROP participants 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Supervisor of Elections contributed to the plan an amount equal to 21.26% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. V-9

220 NOTE 5 - RETIREMENT PLAN, (Continued) NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS Plan Description HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 The HIS Plan is funded by required contributions from FRS participating employees as set forth by Florida Legislature, based on a percentage of gross compensation for all active FRS members. For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Supervisor of Elections does not participate in the Investment Plan. The Supervisor of Elections recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan and the HIS Plan amounting to $43,305, and $2,791, respectively, for the fiscal year ended September 30, The Supervisor of Elections's payments after June 30, 2015, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $11,468, and $932, respectively. The Supervisor of Elections is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the governmentwide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - and amendment of GASE Statement No. 27, and GASE Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - and amendment of GASE Statement No. 68, effective October 1, The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida , or from the Web site In accordance with Section , Florida Statutes, because the Supervisor of Elections provides medical plans to employees of the Supervisor of Elections and their eligible dependents, the Supervisor of Elections 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. V-10

221 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Eligibility for Insurance Coverage Depending on the class of employee the following eligibility rules apply: Membership As of September 30, 2015, membership consisted of: Active Employees 5 Eligible Retirees - Covered Spouses - Funding Policy HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 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. Regular Class and Elected Officials - For employees enrolled in FRS prior to July 1, 2011, age 62, and 6 years of service or 30 years of service, regardless of age, is normal retirement, respectively. Employees may retire early at age 43 and 6 years of service. For employees enrolled in FRS on or after July 1, 2011, age 65, and 8 years of service or 33 years of service, regardless of age, is normal reitrement, respectively. Employees may retire early at age 43 and 8 years of service. Special Risk - For employees enrolled in FRS prior to July 1, 2011, age 55 and 6 years of service or 25 years of speical risk service, regardless, of age is normal retirement. Employees may retire early at age 36 and 6 years of service. For employees enrolled in FRS on ar after July 1, 2011, age 60 and 8 years of service or 30 years of special risk service, regardless of age, is normal retirement. Employees may retire early at at 36 and 8 years of service. 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. Currently, the Supervisor of Elections has no employees receiving benefits. This space intentionally left blank. V-11

222 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Annual OPEB Costs and Net OPEB Obligation HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Notes to Financial Statements September 30, 2015 Hendry County had an actuarial valuation performed for the plan as of October 1, 2014 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 Supervisor of Elections's annual OPEB cost for the fiscal year was set at $5,111, as the transition liability was set to zero as of September 30, The Supervisor of Election's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation from 2015 is as follows: Fiscal Year Ended Annual OPEB Cost Employer contributed % of Annual OPEB Cost Contributed Net OPEB Obligation September 30, 2015 $ 5,111 $ 1, % $ 26,132 The funded status of the plan as of September 30, 2015 was as follows: Actuarial Accrued Liability (AAL) $ 35,806 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 35,806 Covered Payroll $ 178,499 Ration of UAAL to Covered Payroll 20% NOTE 7 - RISK MANAGEMENT The Supervisor of Elections participates in the County-wide insurance program. The Hendry County, Florida, Board of County Commissioners is a member of Public Risk Management (PRM), a local government liability risk pool. PRM administers insurance activities relating to property, general, automobile, public officials 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). The Fund is fully funded annually. The premiums for this coverage are paid by various constitutional officers and Board of County Commissioners. For fiscal year ended September 30, 2015, the Supervisor of Elections was charged $45,520. V-12

223 REQUIRED SUPPLEMENTARY INFORMATION

224 HENDRY COUNTY, FLORIDA SUPERVISOR OF ELECTIONS Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual For the Fiscal Year Ended September 30, 2015 Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Revenues Miscellaneous $ - $ - $ 5,140 $ 5,140 Interest Total revenues - - 5,300 5,300 Expenditures Governmental expenditures 457, , ,305 17,284 Excess of revenues over (under) expenditures (457,589) (457,589) (435,005) 22,584 Other financing sources (uses) Operating transfers in 457, , , Operating transfers out - - (22,675) (22,675) Total other financing sources (uses) 457, , ,005 (22,584) Excess of revenues and other sources over (under) expenditures and other uses $ - $ - - $ - Fund balance - October 1, Fund balance - September 30, 2015 $ - V-13

225 366 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 Brenda K. Hoots Hendry County Supervisor of Elections 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 the major fund and the aggregate remaining fund information of the Hendry County, Florida, Supervisor of Elections, (the "Supervisor of Elections") as of and for the fiscal year ended September 30, 2015, and the related notes to the special-purpose financial statements, which collectively comprise the Supervisor of Election's special-purpose financial statements, and have issued our report thereon dated June 7, Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Supervisor of Election'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 specialpurpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Supervisor of Election's internal control. Accordingly, we do not express an opinion on the effectiveness of the Supervisor of Election'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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. V-14

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227 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Brenda K. Hoots Hendry County Supervisor of Elections LaBelle, Florida Report on the Financial Statements We have audited the special-purpose financial statements of the Hendry County, Florida, Supervisor of Elections, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated June 7, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 7, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings and recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. V-16

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231 HENDRY COUNTY, FLORIDA TAX COLLECTOR September 30, 2015 SPECIAL PURPOSE FINANCIAL STATEMENTS, TOGETHER WITH REPORTS OF INDEPENDENT AUDITORS

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233 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Independent Auditor's Report Honorable Patrick B. Langford Hendry County Tax Collector LaBelle, Florida Report on the Financial Statements We have audited the accompanying special-purpose financial statements of the major fund and the aggregate remaining fund information of the Hendry County, Florida, Tax Collector, (the "Tax Collector") as of and for the fiscal year ended September 30, 2015, 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. 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. VI-1

234 Auditor's Responsibility, continued 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 Tax Collector. Additionally, the special-purpose financial statements present only the Tax Collector 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 Tax Collector in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter Change in Accounting Principle As described in Note 3 to the special-purpose financial statements, effective October 1, 2014, the Clerk adopted the provisions of Governmental Accounting Standards Board ( GASB ) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 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. VI-2

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236 HENDRY COUNTY, FLORIDA TAX COLLECTOR Balance Sheet - Governmental Funds September 30, 2015 General Fund ASSETS Cash $ 122,012 Due from other funds 51,499 Total Assets $ 173,511 LIABILITIES Accounts payable $ 17,461 Accrued payroll 24,119 Due to other governments 131,931 Total Liabilities $ 173,511 See accompanying notes. VI-4

237 HENDRY COUNTY, FLORIDA TAX COLLECTOR Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds For the Fiscal Year Ended September 30, 2015 Revenues General Fund Charges for Services $ 1,550,687 Miscellaneous 4,104 Total Revenues 1,554,791 Expenditures General Government Personal services 1,196,828 Operating expenses 217,435 Capital outlay 8,597 Total Expenditures 1,422,860 Excess of revenues over expenditures 131,931 Other financing sources (uses) Operating transfers out (131,931) Total other financing sources (uses) (131,931) Excess of revenues and other sources over (under) expenditures and other uses - Fund balance - October 1, Fund balance - September 30, 2015 $ - See accompanying notes. VI-5

238 HENDRY COUNTY, FLORIDA TAX COLLECTOR Statement of Fiduciary Assets and Liabilities - Agency Funds September 30, 2015 Agency Funds ASSETS Cash $ 578,800 Total Assets $ 578,800 LIABILITIES Due to Board of County Commissioners $ 37,335 Due to other governements 165 Due to individuals 58,338 Deposits 482,962 Total Liabilities $ 578,800 See accompanying notes. VI-6

239 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the more significant accounting principles and policies: Defining the Governmental Reporting Entity The Tax Collector, as an elected constitutional officer was established by the Constitution of the State of Florida, Article VIII, Section 1 (d). As such, the Tax Collector'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 Tax Collector's financial statements. Fund Accounting The accounts of the Tax Collector 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 Tax Collector: General Fund - The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Tax Collector, 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, are shown as operating transfers out. 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. Measurement Focus General Fund - The General Fund is 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 balance (net current assets) is 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. VI-7

240 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Agency 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. 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. Budgetary Process Chapter 195, Florida Statutes, governs the preparation, adoption and amendment process of the Tax Collector's annual budget. A budget is only required to be prepared for the General Fund. The Tax Collector's budget and amendments are prepared independently of the Board of County Commissioners and are approved by the State of Florida Department of Revenue. A copy of the approved budget is provided to the Board of County Commissioners. The budget for the General Fund is prepared on the modified accrual basis of accounting. The annual budget serves as the legal authorization for expenditures. 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 Tax Collector. Fixed 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 of the Board. Compensated Absences The Tax Collector'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 paid time off (PTO). VI-8

241 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Compensated Absences- (Continued) As of September 30, 2015, the Tax Collector had $61,515 in long-term compensated absences payable. This amount is reported in the government-wide financial statements of Hendry County, Florida. 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. NOTE 2 - CASH AND INVESTMENTS During the fiscal year, the Tax Collector maintained deposits in interest-bearing savings and checking accounts. At September 30, 2015, the bank balance of all accounts was $1,179,542, and the book balance of deposits was $695,382. The Tax Collector had $5,430 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 Tax Collector held no investments during the fiscal year. NOTE 3 - RETIREMENT PLAN Plan Description The Tax Collector's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Service, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section , Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. VI-9

242 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 3 - RETIREMENT PLAN, (Continued) Plan Description, (Continued) Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service, or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested regular class members with less than 30 years of service may retire before age 62 and are entitled to a retirement benefit payable monthly also equal to 1.6% of their final average compensation for each year of credited service based on the five highest years of salary, with a 5% reduction for each year under age 62. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled on or after July 1, 2011 by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 or 33 years of service regardless of age. Also, the final average compensation for these members is based on the eight highest years of salary. Funding Policy All enrolled members of the FRS Pension Plan are required to contribute 3.0% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on statewide contribution rates. The employer contribution rates by job class for the periods from October 1, 2015 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular 7.37% and 7.26%; county elected officers 43.24% and 42.27%; senior management 21.14% and 21.43%; and DROP participants 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Property Appraiser contributed to the plan an amount equal to 9.5% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is funded by required contributions from FRS participating employees as set forth by Florida Legislature, based on a percentage of gross compensation for all active FRS members. For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self-direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. VI-10

243 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 3 - RETIREMENT PLAN, (Continued) Funding Policy, (Continued) Costs of administering plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Tax Collector recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan and the defined contribution plan, amounting to $60,364, $10,151, and $7,154, respectively, for the fiscal year ended September 30, The Tax Collector's payments after June 30, 2015, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $19,975, and $3,052, respectively. The Tax Collector is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the governmentwide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - and amendment of GASE Statement No. 27, and GASE Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - and amendment of GASE Statement No. 68, effective October 1, The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida , or from the Web site NOTE 4 - GENERAL LONG-TERM DEBT The following changes in general long-term debt occurred during the year ended September 30, 2015: Long-term debt payable at October 1, 2014 $ 46,153 Increase in accrued compensated absences 15,362 Long-term debt payable at September 30, 2015 $ 61,515 General long-term debt is comprised of the following: Noncurrent portion of compensated absences Employees of the Tax Collector are entitled to paid leave time based on length of service and job classification. $ 61,515 VI-11

244 HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 NOTE 5 - CONTINGENCIES The Tax Collector 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 Tax Collector. NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS Plan Description In accordance with Section , Florida Statutes, because the Tax Collector provides medical plans to employees of the Tax Collector and their 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 - For employees enrolled in FRS prior to July 1, 2011, age 62, and 6 years of service or 30 years of service, regardless of age, is normal retirement, respectively. Employees may retire early at age 43 and 6 years of service. For employees enrolled in FRS on or after July 1, 2011, age 65, and 8 years of service or 33 years of service, regardless of age, is normal reitrement, respectively. Employees may retire early at age 43 and 8 years of service. Special Risk - For employees enrolled in FRS prior to July 1, 2011, age 55 and 6 years of service or 25 years of speical risk service, regardless, of age is normal retirement. Employees may retire early at age 36 and 6 years of service. For employees enrolled in FRS on ar after July 1, 2011, age 60 and 8 years of service or 30 years of special risk service, regardless of age, is normal retirement. Employees may retire early at at 36 and 8 years of service. Membership As of September 30, 2015, membership consisted of: Active Employees 19 Eligible Retirees - Covered Spouses - 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. Currently, the Tax Collector has no employees receiving benefits. VI-12

245 NOTE 6 - OTHER POST-EMPLOYMENT BENEFITS, (Continued) Annual OPEB Costs and Net OPEB Obligation HENDRY COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements September 30, 2015 Hendry County had an actuarial valuation performed for the plan as of October 1, 2014 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 Sheriff's annual OPEB cost for the fiscal year was set at $18,924 as the transition liability was set to zero as of September 30, The Tax Collecotr's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation from 2015 is as follows: Fiscal Year Ended September 30, 2015 Annual % of Annual OPEB Employer OPEB Cost Net OPEB Cost Contributed Contributed Obligation $ 18,924 $ 4, % $ 96,764 The funded status of the plan as of September 30, 2015 was as follows: Actuarial Accrued Liability (AAL) $ 132,586 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (AAL) $ 132,586 Covered Payroll $ 660,968 Ration of UAAL to Covered Payroll 20% NOTE 7 - RISK MANAGEMENT The Tax Collector participates in the County-wide insurance program. The Hendry County, Florida, Board of County Commissioners is a member of the Public Risk Management (PRM), a local government liability risk pool. PRM administers insurance activities relating to property, general, automobile, public official's liability, worker's 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-party carriers. The fund is fully funded annually. The premiums for this coverage are paid by the various Constitutional Officers and the Board of County Commissioners on a per employee coverage basis. For the fiscal year ended September 30, 2015, the Tax Collector was charged $257,725. VI-13

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249 HENDRY COUNTY, FLORIDA TAX COLLECTOR GENERAL FUND Schedule of Revenues, Expenses and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended September 30, 2015 Revenues Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Charges for Services $ 1,464,052 $ 1,514,392 $ 1,550,687 $ 36,295 Miscellaneous - - 4,104 4,104 Total Revenues 1,464,052 1,514,392 1,554,791 40,399 Expenditures General Government Personal services 1,203,450 1,231,992 1,196,828 35,164 Operating expenses 252, , ,435 56,365 Capital outlay 8,600 8,600 8,597 3 Total Expenditures 1,464,052 1,514,392 1,422,860 91,532 Excess of revenues over expenditures , ,931 Other financing sources (uses) Operating transfers out - - (131,931) (131,931) Total other financing sources (uses) - - (131,931) (131,931) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - October 1, Fund balance - September 30, 2015 $ - $ - $ - $ - VI-14

250 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Fiduciary Assets and Liabilities - Agency Funds September 30, 2015 TAX LABELLE CLEWISTON COLLECTION LABELLE DRIVERS DRIVERS ACCOUNT TAG LICENSE LICENSE ASSETS Cash $ 510,373 $ - $ - $ - Total Assets $ 510,373 $ - $ - $ - LIABILITIES Due to Board of County Commissioners $ - $ - $ - $ - Due to other governments Due to individuals 27, Due to other funds Deposits 482, Total Liabilities $ 510,373 $ - $ - $ - VI-15.1

251 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Fiduciary Assets and Liabilities - Agency Funds - Continued September 30, 2015 CLEWISTON SPORTS WASTE TAX SUNSHINE CHRISTMAS TAG FUND COLLECTION REDEMPTION FUND CLUB TOTAL $ - $ - $ 36,832 $ 27,868 $ 307 $ 3,420 $ 578,800 $ - $ - $ 36,832 $ 27,868 $ 307 $ 3,420 $ 578,800 $ - $ - $ 36,832 $ 503 $ - $ - $ 37, , ,420 58, ,962 $ - $ - $ 36,832 $ 27,868 $ 307 $ 3,420 $ 578,800 VI-15.2

252 Page 1 of 6 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 TAX COLLECTION FUND Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 498,473 $ 49,956,128 $ 49,944,228 $ 510,373 Total Assets $ 498,473 $ 49,956,128 $ 49,944,228 $ 510,373 LIABILITIES Due to Board of County Commissioners $ - $ - $ - $ - Due to other governments 147 4,027 4, Due to individuals 17,689 30,967 21,410 27,246 Deposits 480,637 52,688,893 52,686, ,962 Total Liabilities $ 498,473 $ 52,723,887 $ 52,711,987 $ 510,373 LABELLE TAG ASSETS Cash $ - $ 3,213,232 $ 3,213,232 $ - Total Assets $ - $ 3,213,232 $ 3,213,232 $ - LIABILITIES Due to Board of County Commissioners $ - $ 13,415 $ 13,415 $ - Due to other governments - 3,185,162 3,185,162 - Due to individuals - 8,880 8,880 - Due to other funds - 5,775 5,775 - Total Liabilities $ - $ 3,213,232 $ 3,213,232 $ - VI-16

253 Page 2 of 6 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 LABELLE DRIVERS LICENSE Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ - $ 17,650 $ 17,650 $ - Total Assets $ - $ 17,650 $ 17,650 $ - LIABILITIES Due to other governments $ - $ 17,650 $ 17,650 $ - Total Liabilities $ - $ 17,650 $ 17,650 $ - CLEWISTON DRIVERS LICENSE ASSETS Cash $ - $ 16,053 $ 16,053 $ - Total Assets $ - $ 16,053 $ 16,053 $ - LIABILITIES Due to other governments $ - $ 16,053 $ 16,053 $ - Total Liabilities $ - $ 16,053 $ 16,053 $ - VI-17

254 Page 3 of 6 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 CLEWISTON TAG Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ - $ 1,931,714 $ 1,931,714 $ - Total Assets $ - $ 1,931,714 $ 1,931,714 $ - LIABILITIES Due to Board of County Commissioners $ - $ 6,338 $ 6,338 $ - Due to other governments - 1,921,601 1,921,601 - Due to individuals - 4,530 4,530 - Total Liabilities $ - $ 1,932,469 $ 1,932,469 $ - SPORTS FUND ASSETS Cash $ - $ 48,870 $ 48,870 $ - Total Assets $ - $ 48,870 $ 48,870 $ - LIABILITIES Due to other governments - $ 48,302 $ 48,302 - Due to other funds Total Liabilities $ - $ 48,870 $ 48,870 $ - VI-18

255 Page 4 of 6 HENDRY COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 WASTE COLLECTION Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 59,097 $ 77,457 $ 99,722 $ 36,832 Total Assets $ 59,097 $ 77,457 $ 99,722 $ 36,832 LIABILITIES Due to Board of County Commissioners $ 59,097 $ 27,930 $ 50,195 $ 36,832 Total Liabilities $ 59,097 $ 27,930 $ 50,195 $ 36,832 TAX REDEMPTION ASSETS Cash $ 93,060 $ 5,185,812 $ 5,251,004 $ 27,868 Total Assets $ 93,060 $ 5,185,812 $ 5,251,004 $ 27,868 LIABILITIES Due to Board of County Commissioners $ 84,709 $ 5,514,440 $ 5,598,646 $ 503 Due to individuals 8, , ,479 27,365 Total Liabilities $ 93,060 $ 6,034,933 $ 6,100,125 $ 27,868 VI-19

256 Page 5 of 6 HENDRY COUNTY TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 SUNSHINE FUND Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 281 $ 928 $ 902 $ 307 Total Assets $ 281 $ 928 $ 902 $ 307 LIABILITIES Due to individuals $ 281 $ 928 $ 902 $ 307 Total Assets $ 281 $ 928 $ 902 $ 307 CHRISTMAS CLUB ASSETS Cash $ 7,475 $ 1,945 $ 6,000 $ 3,420 Total Assets $ 7,475 $ 1,945 $ 6,000 $ 3,420 LIABILITIES Due to individuals $ 7,475 $ 1,945 $ 6,000 $ 3,420 Total Assets $ 7,475 $ 1,945 $ 6,000 $ 3,420 VI-20

257 Page 6 of 6 HENDRY COUNTY TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities - All Agency Funds September 30, 2015 TOTAL - ALL AGENCY FUNDS Balance Balance October 1, September 30, 2014 Additions Deletions 2015 ASSETS Cash $ 658,386 $ 60,449,789 $ 60,529,375 $ 578,800 Total Assets $ 658,386 $ 60,449,789 $ 60,529,375 $ 578,800 LIABILITIES Due to Board of County Commissioners $ 143,806 $ 5,562,123 $ 5,668,594 $ 37,335 Due to other governments 147 5,192,795 5,192, Due to individuals 33, , ,201 58,338 Due to other funds - 6,343 6,343 - Deposits 480,637 52,688,893 52,686, ,962 Total Liabilities $ 658,386 $ 64,017,897 $ 64,097,483 $ 578,800 VI-21

258 366 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 Patrick B. Langford Hendry County Tax Collector 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 the major fund and the aggregate remaining fund information of the Hendry County, Florida, Tax Collector, (the "Tax Collector") as of and for the fiscal year ended September 30, 2015, and the related notes to the special-purpose financial statements, which collectively comprise the Tax Collector's special-purpose financial statements, and have issued our report thereon dated June 8, Internal Control Over Financial Reporting In planning and performing our audit of the special-purpose financial statements, we considered the Tax Collector'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 Tax Collector s internal control. Accordingly, we do not express an opinion on the effectiveness of the Tax Collector 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. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. VI-22

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260 366 East Olympia Avenue Punta Gorda, Florida Phone: Fax: Management Letter Honorable Patrick B. Langford Hendry County Tax Collector LaBelle, Florida Report on the Financial Statements We have audited the special-purpose financial statements of the Hendry County, Florida, Tax Collector, as of and for the fiscal year ended September 30, 2015, and have issued our report thereon dated June 8, Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reports and Schedule We have issued our Independent Auditor s Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 8, 2016, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no findings and recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. VI-24

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