CITY OF TARPON SPRINGS R EQUIRED A UDITOR C OMMUNICATIONS F ISCAL Y EAR E NDED S EPTEMBER 30, 2016 Presented by: Jeff Wolf, CPA Audit Manager
Deliverables and Reports • Required Communications Letter (See handout). • Independent Auditor’s Report (Pages B-1 & B-2) – Unmodified Report • Report on Internal Control and on Compliance and Other Matters (Pages F-1 & F-2) • Management Letter (Pages F-3 & F-4) – 1 Finding • Independent Accountant’s Report on Compliance (Page F-5) 2
FINANCIAL HIGHLIGHTS
General Fund (Pages B-18 & B-20) Total Assets $16.2M Total Liabilities and Deferred Inflows $1.4M Fund Balance: Non Spendable $0.4M Restricted 0.2M Committed 2.9M Assigned 2.5M Unassigned 8.8M Total Fund Balance $14.8M Unassigned FB as a % of Total 39.1% Expenditures and Transfers Out Net Change in Fund Balance ($0.9M) 4
General Fund Budget (Page B-22) Budget Actual Variance Resources: Beginning Fund Balance $ 15.7M $ 15.7M Total Revenues & 21.6M 21.6M $0.0M Transfers In Total Resources 37.3M 37.3M Total Expenditures and 23.8M 22.5M 1.3M Transfer Out Ending Fund Balance $ 13.5M $ 14.8M Net Change in Fund Balance ($ 2.2M) ($ 0.9M) $1.3M 5
Major Enterprise Funds (Pages B-24 & B-25) Sanitation Water & Sewer Total Assets $5.6M $101.4M Total Liabilities and Deferred Inflows 1.0M 36.9M Net Position: Net Investment in Capital Assets 0.9M 53.0M Restricted 0.8M 4.3M Unrestricted 2.9M 7.2M Total Net Position $4.6M $64.5M Total Operating Revenues $4.7M $14.5M Total Operating Expenses 4.3M 11.6M Operating Income (Loss) $0.4M $2.9M 6
Questions or Comments
March 13, 2017 City of Tarpon Springs City Commission Tarpon Springs, Florida We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Tarpon Springs, Florida (the “City”) as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon, dated March 13, 2017. Professional standards require that we provide you with the following information related to our audit. O UR R ESPONSIBILITY UNDER U.S. G ENERALLY A CCEPTED A UDITING S TANDARDS AND G OVERNMENT A UDITING S TANDARDS As stated in our engagement letter dated August 18, 2015, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. As part of our audit, we considered the internal control of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City’s compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. P LANNED S COPE AND T IMING OF THE A UDIT We performed the audit according to the planned scope and timing previously communicated to you in our planning communications letter dated October 25, 2016. S IGNIFICANT A UDIT F INDINGS Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2016. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred.
City of Tarpon Springs March 13, 2017 Page 2 Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The significant estimates affecting the City’s financial statements include the following liabilities: Compensated Absences, Other Post-Employment Benefits, and Net Pension Liability. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The following disclosures are considered significant: Note III-A – Deposits and Investments; Note III-F – Long Term Debt; Note IV-F – Other Post-Employment Benefits (OPEB); and Note IV-G – Employee Pension Plans. D IFFICULTIES E NCOUNTERED IN P ERFORMING THE A UDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. C ORRECTED AND U NCORRECTED M ISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. D ISAGREEMENTS WITH M ANAGEMENT For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. M ANAGEMENT R EPRESENTATIONS We have requested certain representations from management that are included in the manage- ment representation letter dated March 13, 2017. M ANAGEMENT C ONSULTATIONS WITH O THER I NDEPENDENT A CCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consul- tation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
City of Tarpon Springs March 13, 2017 Page 3 O THER A UDIT F INDINGS OR I SSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. We had one recommendation for improvement. The recommendation is provided for your review in our “Independent Auditor’s Management Letter.” The letter is part of the City’s Comprehensive Annual Financial Report (“CAFR”), as provided to you on March 13, 2017. O THER I NFORMATION IN D OCUMENTS C ONTAINING A UDITED F INANCIAL S TATEMENTS With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the U.S., the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. This information is intended solely for the use of the Commissioners and management of the City of Tarpon Springs, Florida and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, M OORE S TEPHENS L OVELACE , P.A. rjt Attachment
Summary of Uncorrected Misstatements City of Tarpon Springs September 30, 2016 Proposed Journal Entries To record capital outlay expense for City Hall Renovations through 9/30/16. 307-8603-519.62-00 OTHER GENERAL GOVT SERVICE / BUILDINGS $ 104,374.00 307-0000-202.00-00 CURRENT LIABILITIES / ACCOUNTS PAYABLE $ 104,374.00 Total $ 104,374.00 $ 104,374.00
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