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WALTON COUNTY, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
for the fiscal year ended
September 30, 2015
Prepared by the Office of the Clerk of Circuit Court and County Comptroller
WALTON COUNTY, FLORIDA
PRINCIPAL OFFICERS
BOARD OF COUNRY COMMISSIONERS
Bill Imfeld Chair – District 3 Cindy Meadows Vice-Chair – District 5 Bill Chapman Commissioner – District 1 Cecilia Jones Commissioner – District 2 Sara Comander Commissioner – District 4 Tax Collector Sheriff Rhonda Skipper Michael A. Adkinson, Jr. Property Appraiser Supervisor of Elections Patrick Pilcher Bobby Beasley
Clerk of the Circuit Court Alex Alford
INTRODUCTORY SECTION
TABLE OF CONTENTS
LETTER OF TRANSMITTAL
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
ORGANIZATIONAL CHART
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
II
I. Introductory Section
Letter of Transmittal 1 6
Certificate of Achievement For Excellence in Financial Reporting 7
Organizational Chart 8
II. Financial Section
Independent Auditors' Report 9 11
Management’s Discussion and Analysis 12 23
BASIC FINANCIAL STATEMENTS
Government Wide Financial Statements
Statement of Net Position 24 25
Statement of Activities 26
Funds Financial Statements
Balance Sheet – Governmental Funds 27
Reconciliation of the Balance Sheet of GovernmentalFunds to Statement of Net Position 28
Statement of Revenues, Expenditures and Changes inFund Balance Governmental Funds 29
Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 30
Statement of Revenues, Expenditures and Changes inFund Balance Budget and Actual
General Fund 31 – 33
County Transportation 34
Fine and Forfeiture 35
Tourist Development 36
Solid Waste Landfill 37
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
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Statement of Net Position – Proprietary Fund 38
Statement of Revenues, Expenses and Changes in Net Position –Proprietary Fund 39
Statement of Cash Flows – Proprietary Fund 40
Statement of Fiduciary Net Position – Agency Funds 41
Notes to Financial Statements 42 84
REQUIRED SUPPLEMENTARY INFORMATION
Post Employment Benefits Plan Schedule of Funding Progress 85
Schedule of Employer’s Proportionate Share of the Net Pension Liability –Florida Retirement Systems Pension Plan 86
Schedule of Employer Contributions – Florida Retirement Systems Pension Plan 87
Schedule of Employer’s Proportionate Share of the Net Pension Liability –Health Insurance Subsidy Program 88
Schedule of Employer Contributions – Health Insurance Subsidy Program 89
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Description of Nonmajor Governmental Funds 90 91
Combining Balance Sheet – Nonmajor Governmental Funds 92 96
Combining Statement of Revenues, Expenditures and Changesin Fund Balance – Nonmajor Governmental Funds 97 101
Schedules of Revenues, Expenditures and Changes in FundBalance Budget and Actual – Debt Service Fund, Capital ProjectsFund and Budgeted Nonmajor Governmental Funds
Nonmajor Governmental Funds:
Special Revenue Funds:
Mosquito Control 102
Housing and Urban Development 103
SHIP Grant 104
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
IIIIII
North Walton Mosquito Control 105
Imperial Lakes MSBU 106
Recreation Plat 107
Daughette MSBU 108
Sidewalk 109
Court Technology 110
Record Modernization 111
Local Option Gas Tax 112
Criminal Justice Education 113
Building Department 114
E 911 115
Court Fines 116
Crime Prevention Trust 117
Title IV D 118
Clerk’s Fine & Forfeiture 119
MSBU Various 120
Mossy Head Industrial Park Capital Projects Fund 121
Infrastructure Improvements Capital Projects Fund 122
Fiduciary Funds:
Description of Fiduciary Funds 123
Combining Statement of Fiduciary Net Position Agency Funds 124 125
Combining Statement of Changes in Assets and LiabilitiesAgency Funds 126 128
Capital Assets Used in the Operation of Governmental Funds
Capital Asset Schedules Description 129
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
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Schedule by Source 130
Schedule by Function and Activity 131
Schedule of Changes by Function and Activity 132
III. Statistical Section
Descriptions 133
Financial Statement Information
Government Wide Expenses and Revenues 134
General Governmental Expenditures by Function 135
General Governmental Revenues by Source 136
Schedule of Net Position and Changes in Net Position 137
Fund Balances, Governmental Funds 138
Changes in Fund Balance – Governmental Funds 139
Other Information
Property Tax Levies and Collections 140
Special Assessments Collections 141
Assessed and Estimated Actual Value of Taxable Property 142
Property Tax Rates – Direct and Overlapping Governments 143
Ratio of Outstanding Debt by Type 144
Ratio of Net General Bonded Debt to Assessed Value andNet Bonded Debt Per Capita 145
Special Assessment Bond Coverage – MSBU Driftwood Estates 146
Ratio of Annual Debt Service Expenditures of General BondedDebt to Total General Governmental Expenditures 147
Bond Coverage 148
Demographic Statistics 149
Operating Indicators by Function/Program 150
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
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Principal Employers 151
Principal Property Taxpayers 152
Property Value, Construction and Bank Deposits 153
Capital Assets by Function/Program 154
Full time Equivalent Government Wide Employees by Function 155
Schedule of Insurance in Force 156
IV. Compliance Section
Independent Auditors’ Reports 157 – 160
Schedule of Expenditures of Federal Awards and State FinancialAssistance 161 163
Notes to Schedule of Expenditures of Federal Awards and StateFinancial Assistance 164 165
Schedule of Findings and Questioned Costs 166 170
Summary Schedule of Prior Audit Findings for Federal Awards 171
Summary Schedule of Prior Audit Findings for State FinancialAssistance 172
Schedule of Receipts and Expenditures of Funds Related to theDeepwater Horizon Oil Spill 173
Independent Accountants’ Report on an Examination Conducted inAccordance with AICPA Professional Standards, Section 601, RegardingCompliance Requirements in Accordance with Chapter 10.550, Rulesof the Auditor General and Section 218.415, Florida Statutes 1742
Independent Accountants’ Report on an Examination Conducted inAccordance with AICPA Professional Standards, Section 601, RegardingCompliance Requirements in Accordance with Chapter 10.550, Rulesof the Auditor General and Sections 365.172(10) and 365.173(2)(d),Florida Statutes 175
Management Letter 176 180
Management’s Response and Corrective Action Plan 181 182
Walton County, FloridaComprehensive Annual Financial Report
Table of Contents
VIVI
V. Financial Statements and Compliance Reports For Constitutional Officers
Clerk of the Circuit Court 183 220
Property Appraiser 221 242
Tax Collector 243 271
Supervisor of Elections 272 297
Sheriff 298 331
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June 24, 2016
To the Honorable Members of the Board of County Commissioners and Citizens of Walton County:
We are pleased to present the Comprehensive Annual Financial Report (CAFR) of Walton County, Florida for the fiscal year ended September 30, 2015. This report was prepared in accordance with generally accepted accounting principles by the Clerk of Courts & County Comptroller. Responsibility for both the accuracy of the presented data, and the completeness and fairness of the presentation, including all disclosures, rests with the Clerk of Courts & County Comptroller as Chief Financial Officer of Walton County.
The Clerk of Courts & County Comptroller, through the Finance Department, is responsible for establishing and maintaining internal controls to provide reasonable, but not absolute assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, the reliability of financial records for preparing financial statements, and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and the evaluation of costs and benefits requires estimates and judgments by management. It is within this framework that we believe the County’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
We believe the data as presented is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the County as measured by the financial activity of its various funds, and that all disclosures necessary to enable the user of these financial statements to gain a thorough understanding of the County’s financial activity have been included.
Chapter 218.39 of the Florida Statutes requires a financial audit of all counties in the state be performed by independent certified public accountants. This requirement has been met for the fiscal year ended September 30, 2015 and the independent auditors’ report has been included in the financial section of this report. In addition to meeting the requirements set forth in state statutes, the audit was also designed to meet the requirements of the federal 1996 Single Audit Act Amendments and the related OMB Circular A-133. The standards governing single audit engagements require the independent auditor to report on the government’s internal controls and compliance with legal requirements with special emphasis on the administration of federal awards. Information related to the single audit, including schedules of federal awards and state financial assistance and independent auditors’ reports on the internal control structure and compliance with requirements applicable to federal financial assistance, are included in the compliance section of this report.
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Governmental accounting and auditing principles require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in combination with it. Walton County’s MD&A can be found immediately following the independent auditors’ report.
County Organization. Walton County encompasses 1,066 square miles with a population of 60,687. There are three incorporated cities within Walton County: DeFuniak Springs, Freeport, and Paxton.
The County provides a number of services to its citizens, including police and fire protection, emergency medical services, health and social services, and cultural and recreation programs. Walton County operates under a commission/administrator form of government with a governing board consisting of five county commissioners who are elected by the citizens of Walton County from at-large districts for staggered four-year terms. Each commission member must meet district residency requirements. In addition to the Board of County Commissioners, there are five elected constitutional officers: The Clerk of the Circuit Court & County Comptroller, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector. The Walton County Board of County Commissioners exercises varying degrees of budgetary control, but not administrative control, over the activities of the constitutional officers. The Property Appraiser, Sheriff, and Supervisor of Elections operate their respective offices as budget officers with funding provided by the Board of County Commissioners in the form of operating subsidies. In return, each budget officer is responsible for the collection of revenues within their jurisdictional area, and for the subsequent remittance of such collection to the Board. The Clerk of Courts & County Comptroller and the Tax Collector operate as fee officers. Fee officers are authorized to retain revenues generated within their offices for the purpose of defraying the cost of operations. All excess fees available at the end of the fiscal year are remitted back to the Board of County Commissioners, except for the excess fees received by the court system which are remitted to the Florida Department of Revenue.
Formal budgetary integration is employed as a management control device during the year. Constitutional officers funded by the Board and all county departments must submit their budget requests to the Office of Management and Budget (OMB) by June 1st of each year. After budget workshops are conducted with each department and constitutional officers, a proposed budget is submitted to the public by Board resolution and public hearings are held to obtain comments from the citizenry. A last public hearing is then held and the final budget is adopted. Walton County follows the laws of Florida regarding the control, adoption and amendment of the budget during each fiscal year; however, the County Administrator approves all departmental budgetary changes by means of a signed budget transfer form. The Board of County Commissioners approves all motions made for inter-divisional transfers and increases in the total budget for a division that occurs due to unanticipated grants or after a public hearing for special expenditures that need to be made from reserves.
Local Economy. Located in the Panhandle of Florida, tourism and its related industries continue to fuel the local economy; however, the County realizes the need to broaden economic opportunities by attracting more diversified businesses and jobs. While the majority of Walton County citizens are employed in the service or government sector, the need for employment diversity has never been more critical than it is now. The opening of the Mossy Head Industrial Park in 2013-14 has added to our employment base and offers our citizens more employment options. Several tenants have or will open a location in the industrial park, including Love’s Travel Stops and Country stores, Empire Truck Sales, and Southern Tire Mart. Ultimately, Walton County’s high quality of living serves as a great attraction for both individuals and their families. Our commitment to responsible growth furthers that opportunity.
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While the economy continues to grow at a modest rate, there were some bright spots from our local economy. The September 2015 unemployment rate for Walton County was 4.5% which is 10% below the federal and state unemployment rate.
The beaches of South Walton are an integral part of the local economy generating approximately $568 million in local income annually according to research conducted for the Walton County Tourist Development Council (TDC). Visitors to Walton County are primarily drawn here by our world class beaches and by the abundance of choices in both retail and dining. The number of visitors to our area has continued to increase over the years, tourist development taxes (TDT) collected for 2015 topped the $20 million mark for the first time. This was achieved despite the fact that the tax rate dropped 11.1% to 4% on October 1, 2014. The increase in collections can be attributed to aggressive marketing of the destination by the TDC and an increase in enforcement activities by the office of the Walton County Clerk of Courts. We expect TDT collections in 2016 to be slightly higher as the economy continues to improve and fuel prices remain low.
In the last decade, the real estate market has been our hardest hit sector. However, there are signs that real estate market has begun to stabilize. Real property values dropped 0.05% in 2012, increased 4.86% in 2013, increased 9.51% in 2014, and increased 11.72% in 2015. Overall, real property values have decreased 14.12% in the last ten years. We expect an increase in 2016 as the economy begins to level off and home inventories begin to move. The biggest concern for our citizenry in recent times has been the rate of foreclosure. Over the last year, foreclosure case filings in Walton County dropped by 34% from 2015. We anticipate an increase in 2016.
Long-term financial planning. Walton County has obtained 315 acres of land in the Mossy Head area that is in a prime location that bordering Interstate 10 to the south and State Road 285 and US Highway 90 to the north. Additionally, the CSX rail line has a main track which runs along the entire northern boundary. The site has sufficient land to accommodate larger operations which few sites within a fifty mile radius have available. The intended use of this property has been to develop a mixed-use commercial/industrial park and to supply employment opportunities for the substantial population growth that is predicted for the northern part of the county. Specific businesses that will be targeted include manufacturing and distribution, and research and development companies.
In 2014, Love’s Truck Stops became the first company to purchase and open a business in the Mossy Head Industrial Park. Subsequently, several other business have invested in the property at the site including Brigman Properties, Empire Truck Service and Sales, and Southern Tire Mart. Walton County will continue to target specific businesses to include manufacturing and distribution, and research and development companies.
Full development of the commerce park cannot occur without sufficient facilities to treat and dispose/reuse the wastewater generated by the occupants. In fiscal year 2014, a project was completed connecting an underutilized package plant at the Dixie RV Superstore, southwest of the Industrial Park, to the underutilized package plant at the Mossy Head School, northeast of the Park. Water and wastewater infrastructure traverses the Park and allows for wastewater flows to be shifted back and forth between the two package plants providing additional capacity and allow current and prospective tenants to access water and wastewater infrastructure up to a certain capacity.
In 2014, the State of Florida approved a budget appropriation that will greatly benefit the marketability of the Industrial Park. The $3 million was appropriated for infrastructure costs at the site including roadway infrastructure and associated storm-water management facilities,
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expansion of water and wastewater infrastructure, underground utilities for the site, and a landscaped entrance area into the Park. Additionally, a 250,000 gallon per day packaged concrete wastewater treatment facility was constructed at the park. As the current wastewater system reaches capacity, the new facility will allow Walton County to link Mossy Head Industrial Park to the existing water sewer system and serve the Mossy Head Industrial Park, Mossy Head Elementary School, residential areas and commercial facilities in the Mossy Head area.
Ultimately, development of this park will diversify the County’s economic base from the tourism oriented jobs in the southern part of the county and provide employment opportunities that will improve the standard of living for all residents of Walton County.
Relevant financial policies. For fiscal year 2015 (2014 millage rate), the Walton County Board of County Commissioners (Board) adopted a budget that showed no increase in the general county millage rate. The Board’s adopted millage rate of 3.556 mills is a decrease of 28.35% from the 2004 general county millage rate.
The Board moved quickly to control spending during the 2015 budgeting process due to a slight increase in projected revenues. Several departments are still being looked at for consolidation and a hiring freeze continues from past years on a limited basis. Additionally, merit increases were eliminated. The 2016 budget will continue the trend of past budgets with minimal growth projected in both revenues and expenses.
The Walton County Investment Committee monitors the County’s investment portfolio in accordance with the County’s written investment policy. Investment earnings are used to offset any projected revenue shortfalls in the budget. In 2015, Walton County’s investment portfolio had a rate of return of 0.54%.
In 2012, the State of Florida Department of Transportation (FLDOT) offered Walton County $102 million if the County contributed $75 million for the four-laning of the Clyde B. Wells Bridge on US Highway 331. Additionally, the FLDOT agreed to four-lane the rest of US Highway 331 to Interstate 10 if the $75 million match was made. The Board of County Commissioners decided to hold a referendum on increasing the sales tax in Walton County by a half-cent. In May of 2012, the voters of Walton County approved the half-cent sales tax increase. Funding was then secured for the match and the monies were transferred to the State of Florida.
After receiving bids much lower than expected for the bridge construction, the State of Florida refunded $50 million to Walton County. These monies were immediately used to pay down the $75 million loan and the remaining $25 million was refinanced at a much lower rate. In 2015, the State of Florida refunded an additional $7,227,657 which when combined with sales tax collections enabled Walton County to pay off the loan on August 26, 2015. The half-cent sales tax was allowed to sunset on December 31, 2015.
Major initiatives. The four-laning of U.S. Highway 331 has been a priority of the County Commissioners for a number of years. Safety concerns are paramount as this roadway is the only north-south hurricane evacuation route in Southern Walton County. However, due to the high cost of construction, the project will be completed in segments. The first segment expanded U.S. Highway 331 to four lanes between the U.S. Highway 98 intersection and the southern end of the Clyde B. Wells Bridge at Choctawhatchee Bay. Safety and drainage improvements, new sidewalks and bicycle lanes, and new traffic signals were also included in this project. Total cost of this segment of the project was $21 million. Funding for this 2.093 mile segment was provided by the Florida Department of Transportation.
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Segment two is the construction of a two-lane addition to the Clyde B. Wells Bridge over Choctawhatchee Bay. Construction began in February of 2014 with an estimated completion date of March 2018. Total cost of this segment is projected to be $118 million. Funding for this 2.274 mile addition will be provided by multiple sources. Walton County contributed $17.8 million to this project through a bank financing arrangement and the remaining $100 million will be provided by the Florida Department of Transportation.
Segment three is the construction of two additional lanes from just north of the Clyde B. Wells Bridge to just south of State Road 20. Construction is scheduled to begin this year and should be completed in 2015. Total cost of this segment is projected to be over $100 million which also includes design, right-of-way acquisition and mitigation expenses. Funding for this 4.697 mile segment will be provided by the Florida Department of Transportation.
Segment four totaling 4.961 miles is the construction of two additional lanes from State Road 20 to Owl’s Head Road. The timetable for final construction of this segment has yet to be determined. Funding for this segment will be provided by the Florida Department of Transportation.
Segment five totaling 4.204 miles is the construction of two additional lanes from Owl’s Head Road to Edgewood Circle. This project will be constructed in two phases with the first phase completed in 2013 and the second phase to begin construction in 2014. Total cost of this segment is projected to be over $70 million which also includes design, right-of-way acquisition and mitigation expenses. Walton County was awarded a Local Agency Participation Grant which funded $6.924 million of the construction cost with a local match of $2.672 million. The remaining funding will be provided by the Florida Department of Transportation.
Segment six totaling 4.673 miles is the construction of two additional lanes from Edgewood Circle to Interstate 10. Total cost of this segment is projected to be over $90 million which would include design, right-of way acquisition and mitigation expenses. The timetable for construction of this segment has yet to be determined but funding will be provided by the Florida Department of Transportation.
Due to the widening of U.S. Highway 331, the United Fire station building and property was sold in 2014 to the FLDOT for $500,000. Construction then began on a new fire station located three miles south of the original building on a five acre parcel being sub-let from the FLDOT for $300 per year through 2049. Construction of the new United Fire Station was completed in the spring of 2015. The only building construction planned for 2016 is an 1800 square foot addition to the county administration building slated to be completed in the summer of 2016.
In 2009, the permitting process began on the restoration of the 12.9 mile stretch of beaches at Seagrove, Blue Mountain, Inlet, and Dune Allen. The permitting process for this federal project can take several years to complete and is anticipated to begin in 2016 or 2017. The approximate cost of this restoration is estimated to be between $60 and $70 million. The restoration will be paid for with tourist development taxes and federal and state funds should they become available.
Awards. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Walton County, Florida for its comprehensive annual financial report for the fiscal year ended September 30, 2014. This was the fourteenth consecutive year that Walton County has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual
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financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgements. This Comprehensive Annual Financial Report is a result of the tremendous effort and dedication given by the Finance Department of the Clerk of Courts & County Comptroller of Walton County. Your hard work is evident in this report. Thank you!
We would also like to thank the staff of the Office of Management and Budget for their cooperation and assistance during this process.
Finally, we would like to thank the accounting firm of Carr, Riggs & Ingram, LLC and specifically Hilton Galloway and Keith Hundley for their contribution to the publication of this document.
Alex AlfordClerk of Courts & County Comptroller
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Walton County, FloridaOrganizational Chart
Board of County
Commissioners
County Attorney
CountyAdministrator
Deputy County Administrator (Operations)
Public Safety
Probation Emergency Response
Risk Management and Safety
Public Works
Public Works Department Shop/Fleet
Facilities Maintenance Landfill
Environmental Soil Conservation
Mosquito Control
Community Development
Building Planning and Development
CodeCompliance
Parks and Recreation
Deputy County Administrator
(Administration)
Administration and
BCC SupportHR
Public Information Technology
Finance/OMB Purchasing
Grants GIS/IT
Library Extension Services
Discretionary MSBU’s
HUD Veterans
TouristDevelopment
Director
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
COMBINING AND INDIVIDUAL FUND STATEMENTS
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INDEPENDENT AUDITORS' REPORT
Honorable Members of theBoard of County CommissionersWalton County, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, thediscretely presented component unit, each major fund, the aggregate remaining fund information,and the proprietary and fiduciary fund types of Walton County, Florida (the “County”), as of and forthe year ended September 30, 2015, and the related notes to the financial statements, whichcollectively 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 statementsin accordance with accounting principles generally accepted in the United States of America; thisincludes the design, implementation, and maintenance of internal control relevant to thepreparation 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. Weconducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures 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, whetherdue to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we expressno such opinion. An audit also includes evaluating the appropriateness of accounting policies usedand the reasonableness of significant accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, the discretely presented componentunit, each major fund, the aggregate remaining fund information, the proprietary fund type and thefiduciary fund type of the County, as of September 30, 2015 and the respective changes in financialposition and where applicable, cash flows thereof, and the respective budgetary comparison for theGeneral Fund, County Transportation Fund, Fine and Forfeiture Fund, Tourist Development Fundand Solid Waste Landfill Fund thereof for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.
Emphasis of a Matter
Change in Accounting Principle
As discussed in note 1 to the financial statements, the Board adopted the provisions ofGovernmental Accounting Standards Board (GASB) Statement No. 68, Accounting and FinancialReporting for Pensions an amendment to GASB Statement No. 27, GASB Statement No. 69,Government Combinations and Disposals of Government Operations, and GASB Statement No. 71,Pension Transition for Contributions Made Subsequent to the Measurement Date an amendmentof GASB Statements No. 68, during the year ended September 30, 2015. Our opinion is notmodified with respect to these matters.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that themanagement’s discussion and analysis, on pages 12 through 23, post employment benefits planschedule of funding progress on page 85, schedule of employer’s proportionate share of the netpension liability – Florida Retirement Systems Pension Plan, schedule of employer contributions –Florida Retirement Systems Pension Plan, schedule of employer’s proportionate share of the netpension liability – Health Insurance Subsidy Program and schedule of employer contributions –Health Insurance Subsidy Program, on pages 86 through 89, be presented to supplement the basicfinancial statements. Such information, although not a part of the basic financial statements, isrequired by the Governmental Accounting Standards Board, who considers it to be an essential partof financial reporting for placing the basic financial statements in an appropriate operational,economic, or historical context. We have applied certain limited procedures to the requiredsupplementary information in accordance with auditing standards generally accepted in the UnitedStates of America, which consisted of inquiries of management about the methods of preparing theinformation and comparing the information for consistency with management’s responses to ourinquiries, the basic financial statements, and other knowledge we obtained during our audit of thebasic financial statements. We do not express an opinion or provide any assurance on theinformation because the limited procedures do not provide us with sufficient evidence to expressan opinion or provide any assurance.
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Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the County’s basic financial statements. The introductory section, combiningand individual non major fund financial statements and schedules, capital assets used in theoperation of governmental funds schedules and statistical sections are presented for purposes ofadditional analysis and are not a required part of the basic financial statements. The accompanyingschedule of expenditures of federal awards and state financial assistance is presented for purposesof additional analysis as required by the U.S. Office of Management and Budget Circular A 133,Audits of States, Local Governments and Non Profit Organizations, and the Florida Single Audit Act;and the schedule of receipts and expenditures of funds related to the Deepwater Horizon oil spill isrequired by Chapter 10.550, Local Governmental Audits, Rules of the Auditor General of the State ofFlorida, and neither schedule is a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules, capital assetsused in the operation of governmental funds schedules, the schedule of expenditures of federalawards and state financial assistance, and the schedule of receipts and expenditures of fundsrelated to the Deepwater Horizon oil spill are the responsibility of management and were derivedfrom and relate directly to the underlying accounting and other records used to prepare the basicfinancial statements. Such information has been subjected to the auditing procedures applied in theaudit of the basic financial statements and certain additional procedures, including comparing andreconciling such information directly to the underlying accounting and other records used toprepare the basic financial statements or to the basic financial statements themselves, and otheradditional procedures in accordance with auditing standards generally accepted in the UnitedStates of America. In our opinion, the combining and individual nonmajor fund financial statementsand schedules, capital assets used in the operation of governmental funds schedules, the scheduleof expenditures of federal awards and state financial assistance, and the schedule of receipts andexpenditures of funds related to the Deepwater Horizon oil spill are fairly stated in all materialrespects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, accordingly, we do not express an opinionor provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 24,2016 on our consideration of the County’s internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts, and grant agreements andother matters. The purpose of that report is to describe the scope of our testing of internal controlover financial reporting and compliance and the results of that testing, and not to provide anopinion on internal control over financial reporting or on compliance. That report is an integral partof an audit performed in accordance with Government Auditing Standards in considering theCounty’s internal control over financial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.Certified Public AccountantsJune 24, 2016
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Management’s Discussion and Analysis
The County’s management discussion and analysis presents an overview of the County’s financialactivities for the two fiscal years ended September 30, 2014 and September 30, 2015. Please readit in conjunction with the Letter of Transmittal, beginning on page 1, and the County’s financialstatements.
Financial Highlights
In fiscal year 2015, Walton County implemented Governmental Accounting Standards BoardStatement 68, “Accounting and Financial Reporting for Pensions.” Accordingly, the 2014amounts presented have been restated, resulting in a decrease in the ending fiscal year2014 net position from governmental activities of $37,086,830.
Walton County’s primary government assets exceeded liabilities (net position) by$254,156,237 for fiscal year 2015 as compared to $215,217,911 for fiscal year 2014, asrestated. Unrestricted net position may be used to meet the County’s ongoing obligationsto citizens and creditors. Walton County’s unrestricted net position at September 30, 2015,amounted to $49,593,608, an increase of $44,253,128.
The County’s total primary government net position for the 2015 fiscal year increased$38,938,326 over fiscal year 2014, as restated.
The County’s governmental funds reported a combined ending fund balance of$120,031,595 at September 30, 2015, an increase of $13,864,161 in comparison with theprior year.
At September 30, 2015, the General Fund balance was $21,883,492 (of which $15,603,519was unassigned), an increase of $1,279,994 from 2014.
The County’s outstanding notes payable and other long term debt decreased by$11,108,501 during fiscal year 2015.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the County’s basic financialstatements. The County’s basic financial statements consist of government wide financialstatements, fund financial statements, and notes to the financial statements. This report alsocontains additional supplementary information following the basic financial statements themselves.
Government wide Financial Statements
Government wide financial statements, which consist of the Statement of Net Position and theStatement of Activities, are designed to provide readers with a broad overview of the County’sfinances in a manner similar to a private sector business. The Statement of Net Position presentsinformation on the County’s assets plus deferred outflows less its liabilities and deferred inflows atSeptember 30, 2015. The difference between these assets and deferred outflows and liabilities anddeferred inflows is reported as net position. Over time, increases or decreases in net position may
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serve as a useful indicator of whether the financial position of the County is improving ordeteriorating.
The Statement of Activities presents information showing how the County’s net position changedduring the fiscal year. All changes in net position are reported as soon as the underlying eventgiving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues andexpenses are reported in this statement for some items that will only result in cash flows in futurefiscal periods (such as uncollected taxes or earned but unused vacation leave).
Governmental activities of the County include general government, public safety, physicalenvironment, transportation, economic environment, human services, culture and recreation, andinterest on long term debt.
The government wide financial statements include both the County itself (known as the primarygovernment) and Florida Community Services Corporation, a legally separate component unitformed to acquire and improve existing water distribution facilities in southern Walton County.
The government wide financial statements begin on page 24.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have beensegregated for specific activities or objectives. The County, like other state and local governments,uses fund accounting to ensure and demonstrate compliance with finance related legalrequirements. All funds of the County can be divided into three categories: governmental,proprietary (internal service), and fiduciary funds.
Governmental Funds
Governmental funds account for essentially the same functions reported as governmental activitiesin the government wide financial statements. However, unlike the government wide financialstatements, governmental fund financial statements focus on near term inflows and outflows ofspendable resources, as well as on balances of spendable resources available at the end of the fiscalyear. Such information may be useful in evaluating a government’s near term financingrequirements.
Because the focus of governmental funds is narrower than that of government wide financialstatements, it is useful to compare the information presented for governmental activities in thegovernment wide financial statements. By doing so, readers may better understand the long termimpact of the government’s near term financing decisions. Both the governmental fund balancesheet and the governmental fund statement of revenues, expenditures, and changes in fundbalances provide reconciliation to facilitate this comparison between governmental funds andgovernmental activities.
The County maintains 42 individual governmental funds. Information is presented separately in thegovernmental funds balance sheet and in the governmental funds statement of revenues,expenditures, and changes in fund balances for the General, County Transportation, Fine andForfeiture, Tourist Development Council, Solid Waste Landfill, Debt Service, and Capital Projects
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funds, all of which are considered to be major funds. Data from the other 35 governmental fundsare combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the supplementaryinformation section of this report.
The County adopts an annual appropriated budget for each of its governmental funds. A budgetarycomparison statement has been provided for the major funds to demonstrate budgetarycompliance.
The government funds financial statements begin on page 27.
Proprietary Funds
The County maintains and presents one type of proprietary fund, an internal service fund, startingon page 38.
The County uses the internal service fund to report funded and accrued compensated absences.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside thegovernment. Fiduciary funds are not included in the government wide financial statementsbecause the resources of these funds are not available to support the County’s own operations.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the dataprovided in the government wide and fund financial statements. The notes to the financialstatements can be found beginning on page 42 of this report.
Other Information
This report presents certain required supplementary information on pages 85 to 89 concerningWalton County’s progress in funding its obligation to provide pensions and other post employmentbenefits to its employees.
Government Wide Financial Analysis
Comparative data for fiscal years ending September 30, 2015 and 2014 are shown below:
Net Position Governmental Activities
For the fiscal year ended September 30, 2014(1) 2015
AssetsCurrent and other assets $ 119,686,701 $ 135,420,073Capital assets 197,802,171 211,847,873
Total assets 317,488,872 347,267,946
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Deferred Outflows of Resources 4,668,802 18,247,008
LiabilitiesLong term liabilities outstanding 66,285,222 80,214,492Other liabilities 20,011,222 14,019,774
Total liabilities 86,296,444 94,234,266
Deferred Inflows of Resources 20,643,319 17,124,451
Net PositionNet investment in capital assets 183,054,531 185,573,714Restricted 26,822,900 18,988,915Unrestricted 5,340,480 49,593,608
Total net position $ 215,217,911 $ 254,156,237
(1) Certain balance sheet items have been restated due to the implementation of GASB 68.
As noted earlier, net position may serve over time as a useful indicator of a government’s financialposition. The overall financial position of the County continued to improve in both fiscal years 2015and 2014, excluding the impact of the implementation of GASB 68. The net position for fiscal yearsending September 30, 2015 and 2014, as restated, increased $38,938,326 and $37,086,830,respectively.
At September 30, 2015, the County’s unrestricted net position increased by $44,253,128.Unrestricted net position is comprised of County resources that may be used to meet ongoingobligations to citizens and creditors. The increase in unrestricted net position is principally theresult of pension expense related to the implementation of the Governmental AccountingStandards Board’s Statement 68, “Accounting and Financial Reporting for Pensions.”
An additional portion of the County’s net position (12% at September 30, 2014 and 7% atSeptember 30, 2015) represents resources that are dedicated or subject to external restrictions onhow they may be used. The overall dollar decrease in restricted net position was $7,833,985 forfiscal year 2015. One key part of the change was a decrease of $4,426,536 in net position restrictedfor debt service due to the early payoff of the loan for Walton County’s portion of the State ofFlorida project to four lane the Choctawhatchee Bay Bridge. Savings realized by the State uponawarding the construction project were refunded against the County’s portion of the cost during2015. This refund, along with higher than projected collections of the half cent sales tax enacted tofund this project allowed the project loan to be repaid in full during 2015. Also, 2015 saw adecrease of $2,309,843 in net position for general government primarily due to the modification ofand payments made for the City of Freeport water and sewer line of credit with Walton County.
The County’s investment in capital assets such as land, buildings, and equipment, as a percentage ofnet position, amounts to 85% and 73% at September 30, 2014 and 2015, respectively, and accountsfor the largest portion of the County’s net position. These asset values are presented less anyoutstanding debt related to the acquisition and accumulated depreciation of those assets. TheCounty uses capital assets to provide services to the citizens and consequently these assets are not
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available for future spending. Although the investment in capital assets is reported net of relateddebt, it should be noted that the resources needed to repay this debt must be provided from othersources since the capital assets themselves cannot be used to liquidate these liabilities.
Changes in Net Position Governmental Activities
September 30, 2014(1) 2015
RevenuesProgram revenue:Charges for services $ 8,092,365 $ 10,471,312Operating grants and contributions 3,877,757 4,349,574Capital grants and contributions 8,043,617 14,218,252General revenues:Property taxes 39,934,572 44,521,882Other taxes 59,875,695 64,188,914Other 7,787,064 8,887,811
Total revenues 127,611,070 146,637,745
ExpensesGeneral government 21,492,257 25,430,143Public safety 37,774,222 39,889,287Physical environment 9,566,044 11,190,946Transportation 27,124,508 15,552,252Economic environment 14,789,508 15,889,294Human services 2,226,393 1,874,924Culture/recreation 1,378,960 4,029,171Interest on long term debt 1,136,315 1,071,059
Total expenses 115,488,207 114,927,076
Excess (deficiency) before special items 12,122,863 31,710,669
Special item 10,370,000 7,227,657
Increase in net position 22,492,863 38,938,326
Beginning net position, as restated 192,725,048 215,217,911
Ending net position $ 215,217,911 $ 254,156,237
(1)Fiscal year 2014 expenses have been restated due to the implementation of GASB 68.
Cash and cash equivalents increased $15,666,796, primarily due to the refinancing of debt whichincluded an addition of $10,000,000 in fiscal year 2015 to notes payable to be used primarily for theconstruction of a Sports Complex in Walton County.
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A comparison of current unrestricted assets as compared to current unrestricted liabilities can be agood indication of the County’s ability to meet its current and existing operational responsibilities.
The ratio for both years is as follows:
Comparison of Current Unrestricted Assets and Liabilities – Governmental Activities
September 30, 2014 2015
Current unrestricted assets $ 112,250,563 $ 131,424,422Current unrestricted liabilities 20,011,222 16,805,602
Ratio of current assets to current liabilities 5.61 7.82
The County continues to maintain healthy ratios as noted above which indicates more thanadequate cash flows to Walton County.
Governmental Activities
Governmental activities increased Walton County’s net position by $38,938,326 in 2015. Keyelements of this increase are as follows:
Total revenues were up $15,884,332, or 11.5% from the prior year, primarily due to an increase inproperty taxes ($4,587,310), other taxes ($4,313,219), capital grants and contributions($6,174,635), and charges for services ($2,378,947). These increases were offset by a decrease of$3,142,343 in the amount attributable to special Items in 2015 vs. 2014. The 2014 special revenueitem was related to the receipt of settlement funds for the Deepwater Horizon litigation. For 2015,the special revenue item consisted of a refund from the State of Florida amounting to $7,227,657refund for savings below the State’s anticipated cost of four laning the Choctawhatchee Bay Bridge,as noted earlier. Capital grants and contributions primarily consisted of state and federal grants forroads and bridges and state grant funding for the infrastructure and wastewater treatment plant atNorthwest Florida Commerce Park in Mossy Head. The increase in charges for services can beattributed mostly to payments made to the Sheriff’s Office for housing other state and localinmates.
Expenses totaled $114,927,076, representing an overall 0.5% decrease. The largest increases werein general government ($3,937,886), public safety ($2,115,065), physical environment ($1,624,902),economic environment ($1,099,786), and culture/recreation ($2,650,211). These increases wereoffset by a decrease in transportation of $11,572,256, which can be attributed to an increase inoperating expenditures in 2015 offset by a decrease in capitalized expenditures from 2014 to 2015.
Financial Analysis of the County’s Funds
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance withfinance related legal requirements.
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Governmental Funds
The focus of the County’s governmental funds is to provide information on near term inflows,outflows and balances of spendable resources. Such information is useful in assessing the County’sfinancing requirements. In particular, unassigned fund balance may serve as a useful measure of agovernment’s net resources available for spending at the end of the fiscal year.
The County’s governmental funds reported combined ending fund balances of $106,167,557 at theend of fiscal year 2014 and $120,031,595 at the end of fiscal year 2015. These were increases overthe prior year of $23,441,713 for fiscal year 2014 and $13,864,038 for fiscal year 2015. Theunassigned General Fund balances of $12,559,627 at September 30, 2014 and $15,603,519 atSeptember 30, 2015 were available for spending at the County’s discretion. Governmental fundsheld restricted, committed, or assigned amounts totaling $103,118,918 in 2015 to reflect thevarious constraints placed on those resources for future use, as well as $1,309,158 for nonspendable amounts reflecting items such as inventory and prepaid items.
Major Fund InformationCounty Fine and Tourist
General Fund Transportation Forfeiture Development
Fiscal Year 2015Revenues and other sources 39,209,079$ 29,389,333$ 26,684,167$ 21,426,486$Expenditures and other uses 37,929,085 29,429,954 26,437,649 14,838,215
Increase (decrease) in fundbalance 1,279,994$ (40,621)$ 246,518$ 6,588,271$
Fiscal Year 2014Revenues and other sources 42,548,112$ 23,045,464$ 23,570,293$ 26,944,223$Expenditures and other uses 39,707,394 22,730,338 22,976,484 14,247,712
Increase (decrease) in fundbalance 2,840,718$ 315,126$ 593,809$ 12,696,511$
Solid CapitalWaste Landfill Debt Service Projects
Fiscal Year 2015Revenues and other sources 19,021,752$ 16,758,341$ 29,371,629$Expenditures and other uses 18,788,244 21,184,877 22,577,283
Increase (decrease) in fundbalance 233,508$ (4,426,536)$ 6,794,346$
Fiscal Year 2014Revenues and other sources 16,874,976$ 8,756,206$ 3,830,027$Expenditures and other uses 17,337,284 4,710,630 2,604,407
Increase (decrease) in fundbalance (462,308)$ 4,045,576$ 1,225,620$
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General Fund
The General Fund is the chief operating fund of the County. It accounts for many of the County’score services, such as planning, recreation, library services, and fire rescue services. At September30, 2015, the total fund balance in the General Fund was $21,883,492 of which $15,603,519 wasunassigned. As a measure of the General Fund’s liquidity, it may be useful to compare bothunassigned fund balance and total fund balance to total fund expenditures. Unassigned fundbalance represents 47.40% of total 2015 expenditures, while total fund balance is 66.48% of thesame amount. For fiscal year 2014, unassigned fund balance represented 37.42% of totalexpenditures, while total fund balance was 61.38% of the same amount. The increase in unassignedfund balance to total fund expenditures in fiscal year 2015 can be attributed to an adjustment madeto nonspendable fund balance resulting from the modification and repayment of the City ofFreeport water and sewer line of credit with Walton County.
As detailed in Note 13 to the financial statements, $6,279,973 of the General Fund was nonspendable, restricted, committed, or assigned at September 30, 2015 to reflect prepaid items,inventory, receivables, budget commitments, and judicially controlled funds. At September 30,2014, this amount was $8,043,871. This decrease was primarily due to the adjustment referred toin the previous paragraph which reclassified $1,837,030 in nonspendable fund balance tounassigned upon modification and repayment of the City of Freeport water and sewer line of credit.For fiscal year 2014, $3,913,134 was assigned for use in the General Fund’s 2015 budget and$20,510 assigned for carry forward to complete capital projects. For fiscal year 2015, $2,419,153was assigned for the 2016 budget and $1,871,305 was assigned for carry forward to completecapital projects.
Other Major Governmental Funds
The major governmental funds table also discloses information regarding the other six majorgovernmental funds of the County.
The County Transportation Fund accounts for ad valorem, motor fuel taxes, and various grants tofinance road and bridge construction and maintenance. State statutes govern how these funds areto be used. 2015 saw an increase in intergovernmental revenues from State and Federal grantfunding, funding transferred into the County Transportation Fund from the General Fund to replacemachinery and equipment, and revenues from surplus equipment sales of aging machinery andequipment during the year. These increases were offset by a decrease in Proportionate Fair Sharerevenues recognized during 2015 and unrealized losses on the County Transportation Funds’ shareof long term investments. Operating expenditures increased $6,572,616 during 2015, mostly due towork completed on grant projects during the year and increased expenditures for capital machineryand equipment.
The Fine and Forfeiture Fund accounts for ad valorem, fines and forfeitures, special assessments,and various grants used to finance law enforcement. The increased revenues in fiscal 2015 can beattributed to a higher ad valorem allocation in fiscal year 2015 over 2014 and increased revenuesfrom housing Escambia County inmates following the flooding of the Escambia County Jail CentralBooking and Detention Facility in 2014. Increased expenditures can be attributed to operation andmaintenance of the jail facilities to house the additional inmates, and to the operation of theCorrections and Animal Control departments. During fiscal year 2014, the Corrections and Animal
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Control Departments transferred from the Board of County Commissioners to the Sheriff’s Office.The increase in 2015 expenditures also reflects the first full year of operations of these twodepartments under the Sheriff’s Office.
The Tourist Development Council (TDC) Fund accounts for the local option tourist development taxarising from activities related to the tourist industry. Its use is governed by State statute forpromotion of the tourism industry and beach maintenance and renourishment. At the end of fiscal2014, the half cent Tourist Development Tax committed for emerging markets was allowed tosunset. The remaining portion of fund balance committed to this initiative will be utilized forcontinued expansion of the target tourism market. Even with this decrease in the tax rate (from4.5% in fiscal year 2014 down to 4% in fiscal year 2015), overall revenues from the TouristDevelopment Tax still increased slightly, reflecting the County’s continued tourism growth.Operating costs increased slightly over fiscal year 2014, resulting in the addition of $6,588,271 tothe TDC’s restricted fund balance. These funds are not available for the County to use for generalgovernment operation.
The Solid Waste Landfill Fund utilizes a one cent small county sales tax to pay for operation of alandfill and provide garbage and yard debris collection to County residences. Revenues from thissales tax increased $1,575,634 for fiscal year 2015 as a result of both overall growth and increasedtourism in the County. Revenues also increased due to a transfer in from the General Fund formachinery and equipment purchases for the Landfill during fiscal year 2015. Expendituresincreased during fiscal year 2015 due to an increase in the purchase of machinery and equipmentduring the year and increased contractual solid waste disposal costs. The balance of the fund isrestricted, committed or assigned to fund remaining costs on capital projects, acquisition of land forlandfill expansion, landfill closure costs, economic development and road paving.
Within the Solid Waste Landfill Fund, deposits are made to the fund’s other cash and cashequivalents account for the purpose of complying with federal and state laws and regulationsrelated to funding the minimum estimated landfill closure and past closure costs. This requires theCounty to annually deposit funds in an interest bearing account for the purpose of funding thesecosts. This amount is shown as a restricted asset within the fund and was $1,152,779 at September30, 2014. This was increased to $1,154,692 at September 30, 2015.
The Debt Service Fund accounts for the ½ cent sales tax enacted to repay the debt incurred for theCounty’s portion of the State of Florida’s construction project to four lane the Choctawhatchee BayBridge. Increased revenues can be attributed to the return of $7,227,657 from the State of Floridarepresenting the return of funds by the State of Florida related to the Choctawhatchee Bay Bridgeconstruction project as previously discussed. The increase in debt service expenditures during 2015can be attributed to the early payoff of the 331 bridge loan during fiscal year 2015, with theremaining fund balance consisting of surplus collections to be utilized for improvements to thebridge and approaches as allowed by the referendum ballot language and County ordinanceenacting the sales tax.
The Capital Projects Fund is used to account for financial resources used for the acquisition orconstruction of major capital facilities, other than those financed by proprietary operations. Theincreased revenues and expenditures in fiscal year 2015 were primarily due to the refinancing ofthe existing Capital Projects Line of Credit and addition of $10,000,000 to the principal amount forthe purchase of property and construction of a Sports Complex in Walton County. Property for
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this project was purchased and design of the Sports Complex was begun in 2015. The net increasein fund balance primarily represents the remaining funds for construction of the Sports Complex.
General Fund Budgetary Highlights
Differences between the General Fund’s fiscal year 2015 original budget and final amended budgetwere an increase of $1,460,770 to Board of County Commissioner accounts. They can besummarized as follows:
$471,407 rolled forward from fiscal year 2014 for grants and projects not completed in FY 2014$334,524 for new grants and additions to capital projects received in FY 2015$316,530 received from the City of Freeport for remaining FY 15 costs after the transfer ofFreeport Fire Department to Walton County Fire Rescue$43,200 received from Greater Driftwood Estates Homeowners Association, Inc. and DriftwoodEstates Phase II Homeowners Association, Inc. as part of a cost sharing agreement with WaltonCounty for improvements to Driftwood Park$120,000 in unanticipated revenues from an increase in Planning Department fees$145,009 received from the SHIP Housing fund for prior years’ SHIP program administrativefees$10,000 brought forward from Court Innovations reserves for Mortgage Foreclosure casemanagement services$20,000 brought forward from Court Facilities Trust Fund reserves for repairs to the DeFuniakSprings Courthouse air conditioning system$100 received as a donation for the Summer Reading Program
Actual General Fund expenditures were $1,811,326 less than budgeted. The primary components ofthat difference consisted of an $843,702 reduction in personnel costs due to the delayed filling ofvacancies and $674,640 of grants and minor capital projects not completed, and $262,589budgeted but unspent on state mandated health programs.
Actual General Fund revenues were $3,272,920 more than budgeted. Per the Statement ofRevenues, Expenditures and Changes in Fund Balance, taxes received were $502,589 less thanbudgeted. Those taxes consist of Ad Valorem taxes and the Communications Services Tax. Thestatement does not consider the 5% discount ($841,578) allowance included principally for theearly prepayment of ad valorem taxes. When netted against that budgeted allowance, there isactually $338,989 more revenue than budgeted.
Intergovernmental revenues are reported as $1,109,594 greater than budgeted. This is primarilyattributable to the receipt of $878,897 more in Local Government Half Cent Sales Tax revenue and$354,226 more in State of Florida Revenue Sharing distributions than budgeted.
Revenues for Charges for Services were $376,076 greater than budgeted projections. The primaryfactors resulting in this overage were an excess in planning fees amounting to $251,192 overbudget, ambulance fee collections of $87,245 more than the budgeted amount, and fire MSBU feesof $42,100 over the projected budget.
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Investment Earnings are reported to have been $255,714 short of projections. This primarilyrepresents unrealized losses on the investment of fund balances held throughout 2015.
Miscellaneous revenues exceeded projections by $2,458,465. This mostly consists of a surplus of$959,329 for fees in excess of expenditures returned by the Constitutional Officers, $250,343 insurplus land and equipment sales during fiscal year 2015, and $569,387 from Florida Blue forWalton County’s share of Florida Blue’s prior year health insurance profits on the Walton Countyaccount, and charges for services generated by the Constitutional Offices.
Capital Asset and Debt Administration
The County’s investment in capital assets for its governmental activities as of September 30, 2014amounted to $197,802,171 (net of accumulated depreciation) and at September 30, 2015amounted to $211,847,873. This investment includes capital assets subject to depreciation, such asinfrastructure, buildings, and equipment as well as capital assets not subject to depreciation such asland and construction in progress. The total increase in the County’s investment in capital assetsfor the current fiscal year was 7%.
The most significant capital asset for the County during fiscal year 2015 was infrastructure, with$2,477,917 added during the current year. Additions primarily consisted of the Mossy HeadWastewater Treatment plant, infrastructure completed at the Northwest Florida Commerce Park,and road paving completed in 2015. Construction in progress at September 30, 2015 consistedmostly of $20,350,053 for road and bridge projects, $247,718 for the Landfill building, and $126,518for a Sheriff’s Substation at the Northwest Florida Commerce Park. The net increase in equipmentof $3,623,919 is reflective of continuing efforts to replace Sheriff’s office vehicles and Public Worksequipment that were delayed for several years during the periods of lower ad valorem and salesand gas tax revenues from 2009 through 2012.
Capital Assets (Net of Depreciation)
September 30, 2014 2015
Land $ 48,448,198 $ 50,947,114Buildings 51,405,601 51,610,673Infrastructure 60,923,745 63,401,662Improvements other than buildings 16,139,897 14,131,540Construction in progress 14,022,083 21,270,318Equipment 6,862,647 10,486,566
Total $ 197,802,171 $ 211,847,873
Additional information on the County’s capital assets can be found in Note 7 on page 62 of thisreport.
Long Term Debt
As reflected in Note 8 to the financial statements, the County had $25,500,941 in notes payable atSeptember 30, 2015, of which $1,578,500 is due for repayment during fiscal year 2016.
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September 30, 2014 2015
Notes payableUS 331 Choctawhatchee Bridge Loan $ 20,691,482 $Capital Projects Line of Credit 14,865,329 25,290,415Beach Renourishment Loan 1,052,631 210,526
Total $ 36,609,442 $ 25,500,941
The County’s outstanding notes payable decreased in fiscal year 2015 by $11,108,501, or 30%. Thedecrease was attributable to a combination of two events. First, the capital projects notes wererefinanced to include an additional $10,000,000 in principal for the purchase of property andconstruction of a Sports Complex in Walton County. Second, the Choctawhatchee Bay Bridge loannoted earlier was paid in full during fiscal year 2015. The remaining decreases during the currentyear were attributable to normal debt service principal reductions.
Additional information on the County’s long term debt can be found in Note 8 on page 64 of thisreport.
Economic Factors and Next Year’s Budget and Rates
The unemployment rate for the County at September 30, 2015 was 4.5 percent, slightly up from 3.9percent at September 30, 2014.
Overall building permit activity continued to improve for fiscal year 2015, with 2,324 total permitsissued, including 1,155 residential permits. 2,320 permits, including 1,113 residential, were issuedfor fiscal year 2014. These figures reflect both new housing starts and commercial constructionduring the County’s fiscal year.
Walton County’s population increased 1.5% from the fiscal year ending September 30, 2014, to atotal population of 60,687.
The general ad valorem tax rate for fiscal year 2015 increased to 3.6363 mills. The additional .08mil added in FY 15 was allocated to a Capital Projects fund to be utilized for County wideinfrastructure improvements. The upcoming 2016 fiscal year tax rate remains unchanged at the2015 rate of 3.6363 mills.
Total balance brought forward into the original fiscal year 2014 budget was $10,118,994.$2,710,003 was brought forward in the General Fund and $7,408,991 from all other funds.$12,377,938 was brought forward into the original fiscal year 2015 budget, with $3,885,000brought forward from the General Fund and $8,492,938 from all other funds.
Request for Information
This financial report is designed to present users with a general overview of the County’s financesand to demonstrate the County’s accountability. If you have questions concerning any of theinformation provided in this report or need additional financial information, contact the County’sFinance Director at 176 Montgomery Circle, DeFuniak Springs, Florida 32435, or the FinanceDirector for the Clerk of the Court, P.O. Box 1260, DeFuniak Springs, Florida 32435. Additionalinformation can be found on the County’s web site: http://www.co.walton.fl.us.
Walton County, FloridaStatement of Net Position
September 30, 2015
See accompanying notes to financial statements.24
PrimaryGovernmentGovernmental ComponentActivities Unit
AssetsCurrent assets
Cash and cash equivalents 63,122,119$ 11,702,857$Cash designated for construction 15,864,882Investments 53,020,170 15,006,053Accounts receivable, net 2,241,811 1,919,233Accounts receivable developer agreements, net 709,724Due from other governments 12,231,968Inventory 638,028 3,347,364Prepaid items 170,326 19,238Restricted assets:Cash and cash equivalents 2,582,450Assessments receivable 899,772
Total current assets 134,906,644 48,569,351
Noncurrent assetsRestricted cashDebt service fund 5,186,245Renewal and replacement fund 922,829Customer's deposits 1,674,958
Accounts receivable developer agreements, net 567,779Loans receivable 513,429Deposits 11,330Land and other nondepreciable assets 72,217,432 13,099,301Capital assets, net of depreciation 139,630,441 135,027,308
Total noncurrent assets 212,361,302 156,489,750
Total assets 347,267,946 205,059,101
Deferred Outflows of ResourcesDeferred outflows related to pension 18,247,008Deferred losses on debt refundings 302,513
Total deferred outflows of resources 18,247,008 302,513
Continued
Walton County, FloridaStatement of Net Position Continued
September 30, 2015
See accompanying notes to financial statements.25
Primary GovernmentGovernmental ComponentActivities Unit
LiabilitiesCurrent liabilities
Accounts payable 5,537,331$ 125,956$Accrued liabilities 2,621,422 107,284Accrued interest payable 210,051Due to other governments 1,574,094Due to individuals 41,069Deposits 2,393,309Unearned revenue 1,642,498Landfill closure costs 93,174Compensated absences 875,401Payable from restricted assets:Accrued interest payable 578,935Bonds payable 1,647,000
Capital lease obligations 238,753Notes payable 1,578,500Total current liabilities 16,805,602 2,459,175
Noncurrent liabilitiesCustomer deposits 1,674,958Notes payable 23,922,441Capital lease obligations 534,466Bonds payable 29,999,445Obligation for deferred compensation 589,817Net pension liability 35,960,020Other post employment benefit obligation 9,699,000Landfill closure cost 4,587,126Compensated absences 2,725,611 204,739Total noncurrent liabilities 77,428,664 32,468,959
Total liabilities 94,234,266 34,928,134Deferred Inflows of ResourcesDeferred inflows related to pension 17,124,451
Net PositionNet investment in capital assets 185,573,714 116,782,675Restricted for:Debt service 3,531,053 6,109,074Capital projects 2,044,676General government 1,664,480Public safety 2,133,933Transportation 8,646,500Economic environment 586,004Human services 382,269
Unrestricted 49,593,608 47,541,731
Total net position 254,156,237$ 170,433,480$
Walton County, FloridaStatement of Activities
For the Year Ended September 30, 2015
See accompanying notes to financial statements.
Program
Chargesfor
Functions/Programs Expenses Services
Primary GovernmentGovernmental Activities:General government 25,430,143$ 3,336,621$Public safety 39,889,287 6,030,010Physical environment 11,190,946 963,849Transportation 15,552,252Economic environment 15,889,294 111,103Human services 1,874,924 10,800Culture/recreation 4,029,171 18,929Interest on long term debt 1,071,059
Total primary government 114,927,076$ 10,471,312$
Component UnitFlorida Community Services Corporation 22,160,028$ 24,625,926$
General RevenuesProperty taxesGasoline taxesSales taxTourist development taxOther taxesInvestment earnings (losses)MiscellaneousGain on disposition of equipment
Special ItemContractual obligation State of Florida
Total general revenues
Change in net position
Total Net Position beginningPrior period adjustment
Net Position beginning, as restated
Total Net Position ending
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PrimaryOperating Capital GovernmentGrants and Grants and Governmental Component
Contributions Contributions Activities Unit
532,446$ 2,994,727$ (18,566,349)$ $1,762,567 108,030 (31,988,680)
79,429 (10,147,668)6,377 10,969,034 (4,576,841)
1,923,283 33,961 (13,820,947)26,615 (1,837,509)18,857 112,500 (3,878,885)
(1,071,059)
4,349,574$ 14,218,252$ (85,887,938)
$ 1,102,811$ 3,568,709
44,521,8825,167,916
36,548,31120,146,2642,326,423595,163 16,915
6,359,971 689,8211,932,677 275,395
7,227,657
124,826,264 982,131
38,938,326 4,550,840
252,304,741 165,882,640(37,086,830)
215,217,911 165,882,640
254,156,237$ 170,433,480$
Net (Expense) Revenues andChanges in Net PositionRevenues
Walton County, FloridaBalance Sheet
Governmental FundsSeptember 30, 2015
See accompanying notes to financial statements.
County Fine and TouristGeneral Transportation Forfeiture Development
AssetsCash and cash equivalents 10,844,211$ 4,859,058$ 1,637,619$ 28,766,165$Investments 12,100,238 3,991,430 462,202 23,629,545Accounts receivable, net 270,885 248 1,686 1,936,175Due from other governments 1,721,392 4,386,228 500,409Due from other funds 176 110,385 3,964Inventory 167,778 470,250Prepaid items 147,510 819 21,350Restricted assets:Cash and cash equivalentsAssessments receivable
Loans receivable 513,429
Total assets 25,765,619$ 13,818,418$ 2,605,880$ 54,353,235$
LiabilitiesAccounts payable 1,688,069$ 1,045,436$ 524,772$ 1,261,896$Accrued liabilities 1,503,293 310,236 460,189 70,110Due to other governments 98,879 41,609Due to individualsDeposits 466,047 1,918,876 8,386Due to other funds 1,010 92,309 5,385Unearned revenue 124,829 1,511,692
Total liabilities 3,882,127 4,827,849 1,077,270 1,345,777
Fund BalanceNonspendable 816,015 471,069 21,550Restricted 1,173,500 8,519,500 1,528,610Committed 27,978,564Assigned 4,290,458 25,007,344Unassigned:General fund 15,603,519
Total fund balance 21,883,492 8,990,569 1,528,610 53,007,458
Total liabilities, deferredinflows of resources andfund balance 25,765,619$ 13,818,418$ 2,605,880$ 54,353,235$
27
Solid Other TotalWaste Debt Capital Governmental GovernmentalLandfill Service Projects Funds Funds
3,699,993$ $ 4,794,048$ 7,842,165$ 62,443,259$3,039,327 1,172,819 3,938,028 4,686,581 53,020,170
2,332 30,485 2,241,8112,179,594 930,476 2,513,869 12,231,968
92,428 206,953638,028
524 170,203
1,154,692 1,427,758 2,582,450899,772 899,772
513,429
10,075,938$ 3,531,053$ 8,732,076$ 16,065,824$ 134,948,043$
568,495$ $ 40,542$ 408,121$ 5,537,331$21,330 256,264 2,621,422
1,212,975 220,503 1,573,96641,069 41,069
2,393,309108,377 207,081905,749 2,542,270
1,802,800 40,542 1,940,083 14,916,448
524 1,309,1581,154,692 3,531,053 3,252,446 19,159,801709,686 7,135,920 35,824,170
6,408,760 8,691,534 3,736,851 48,134,947
15,603,519
8,273,138 3,531,053 8,691,534 14,125,741 120,031,595
10,075,938$ 3,531,053$ 8,732,076$ 16,065,824$ 134,948,043$
Walton County, FloridaReconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net PositionSeptember 30, 2015
See accompanying notes to financial statements.28
Differences in amounts reported for governmental activities in the Statement of Net Position:
Fund balances Total governmental funds 120,031,595$
899,772
211,847,873
Deferred outflows related to pension 18,247,008Deferred inflows related to pension (17,124,451)Notes payable (25,500,941)Capital lease obligations (773,219)Accrued interest payable (210,051)Landfill closure costs (4,680,300)Net pension liability (35,960,020)Other post employment benefit obligations (9,699,000)
(2,922,029) (78,623,003)
Net position of governmental activities 254,156,237$
Compensated absences, net of Internal ServiceFund, $678,860
Assessments receivable are not available to pay current periodexpenditures and therefore are deferred in the governmentalfunds.
Capital assets used in government activities are not financialresources and therefore are not reported at the fund level.
Certain liabilities are not due and payable in the current periodand therefore are not reported in the funds.
Walton County, FloridaStatement of Revenues, Expenditures and Changes in Fund Balance
Governmental FundsFor the Year Ended September 30, 2015
See accompanying notes to financial statements.
County Fine and TouristGeneral Transportation Forfeiture Development
RevenuesTaxes 16,657,953$ 3,633,573$ 23,605,848$ 20,146,264$Licenses and permits 277,030 1,000Intergovernmental 11,880,665 13,363,940 864,894 33,961Charges for services 3,399,576 2,050,681 15,788Fines and forfeitures 42,058 58,863Investment earnings (loss) 129,286 37,108 26,717 249,562Miscellaneous 4,408,877 1,486,089 76,164 980,911
Total revenue 36,795,445 18,520,710 26,684,167 21,426,486
ExpendituresCurrent
General government 19,275,380Public safety 10,104,450 26,337,649Physical environment 380,237Transportation 29,429,954Economic environment 257,446 13,966,687Human services 1,692,504Culture/recreation 1,016,592
Capital projectsDebt servicePrincipal 187,695 100,000 842,105Interest 1,549 29,423
Total expenditures 32,915,853 29,429,954 26,437,649 14,838,215
Excess Revenue Over (Under)Expenditures 3,879,592 (10,909,244) 246,518 6,588,271
Other Financing Sources (Uses)Transfers in 2,395,009 10,868,623Transfers out (5,013,232)Issuance of debt 18,625
Total other financing sources(uses) (2,599,598) 10,868,623
Special itemContractual obligation State of FL
Net change in fund balance 1,279,994 (40,621) 246,518 6,588,271
Fund Balance beginning 20,603,498 9,031,190 1,282,092 46,419,187
Fund Balance ending 21,883,492$ 8,990,569$ 1,528,610$ 53,007,458$
29
Solid Other TotalWaste Debt Capital Governmental GovernmentalLandfill Service Projects Funds Funds
17,838,177$ 9,502,598$ $ 3,841,688$ 95,226,101$2,251,990 2,530,020
79,429 9,361,161 35,584,050151,509 1,518,904 7,136,458
552,633 653,55438,756 28,086 38,867 46,780 595,162253,411 2,145,384 9,350,836
18,361,282 9,530,684 38,867 19,718,540 151,076,181
76,453 8,699,793 28,051,6262,297,806 38,739,905
10,189,621 96,708 10,666,56629,429,954
2,260,833 16,484,9661,091,787 2,784,291
2,409,019 116,283 3,541,8942,280,287 2,280,287
20,691,482 16,574,913 38,396,195416,942 634,704 1,082,618
10,189,621 21,184,877 21,898,923 14,563,210 171,458,302
8,171,661 (11,654,193) (21,860,056) 5,155,330 (20,382,121)
660,470 2,332,762 678,360 16,935,224(8,598,623) (678,360) (2,645,009) (16,935,224)
27,000,000 27,018,625
(7,938,153) 28,654,402 (1,966,649) 27,018,625
7,227,657 7,227,657233,508 (4,426,536) 6,794,346 3,188,681 13,864,161
8,039,630 7,957,589 1,897,188 10,937,060 106,167,434
8,273,138$ 3,531,053$ 8,691,534$ 14,125,741$ 120,031,595$
Walton County, FloridaReconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balance of Governmental Fundsto the Statement of Activities
For the Year Ended September 30, 2015
See accompanying notes to financial statements.30
Differences in amounts reported for governmental activities in the Statement of Activities:
Net change in fund balances total governmental funds 13,864,161$
27,280,988
(13,220,363)
(14,923)
(27,018,625)
38,524,226
(49,570)
11,561
(954,519)
2,249,367
(1,415,000)
(318,977)
Change in net position of governmental activities 38,938,326$
Accrued landfill closure/post closure costs do no require the use ofcurrent financial resources and therefore are not reported asexpenditures in the governmental funds.
Assessment revenue is not collected for several months after year endand is deferred in the governmental funds.
Accrued interest expense reported in the Statement of Activities doesnot require the use of current financial resources and therefore is notreported in governmental funds.
Compensated absences reported in the Statement of Activities do notrequire the use of current financial resources and therefore are notreported as expenditures in the governmental funds.
Proceeds from the issuance of debt are reported as an other financingsource in governmental funds but as an increase of long term liabilitiesin the Statement of Net Position.
Capital outlay, reported as expenditures in governmental funds, areshown as capital assets in the Statement of Net Position.
Depreciation expense on governmental capital assets is included in thegovernmental activities in the Statement of Activities.
Book value of assets sold or disposed of reported in the Statement ofActivities
Repayment of long term debt is reported as an expenditure ingovernmental funds but as a reduction of long term liabilities in theStatement of Net Position.
Accrued other post employment benefits do not require the use ofcurrent financial resources and therefore are not reported asexpenditures in the governmental funds.
Deferred outlfows related to pension liability, deferred inflows relatedto pension liability and changes in net pension liability do not require theuse of current financial resources and therefore are not reported as
Walton County, FloridaGeneral Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
See accompanying notes to financial statements.31
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 17,160,542$ 17,160,542$ 16,657,953$ (502,589)$Licenses and permits 204,000 204,000 277,030 73,030Intergovernmental 10,135,274 10,771,071 11,880,665 1,109,594Charges for services 2,903,500 3,023,500 3,399,576 376,076Fines and forfeitures 28,000 28,000 42,058 14,058Investment earnings (losses) 385,000 385,000 129,286 (255,714)Miscellaneous 1,450,582 1,950,412 4,408,877 2,458,465
Total revenues 32,266,898 33,522,525 36,795,445 3,272,920
Expenditures Board of County Commissioners (BCC)CurrentGeneral GovernmentBoard of County Commissioners 4,997,763 5,928,543 5,849,397 79,146Comptroller 2,352,744 2,352,744 2,352,744Clerk of Court circuit court 209,854 209,854 194,350 15,504Clerk of Court county court 70,140 70,140 68,125 2,015Court technology 180,900 180,900 85,955 94,945GIS information services 560,044 488,267 453,054 35,213Property Appraiser 222,200 222,200 199,613 22,587Supervisor of Elections 724,678 724,678 698,635 26,043Human resources 424,886 424,886 330,554 94,332Legal services 575,321 575,321 575,827 (506)State Attorney/Public Defender 85,040 85,040 85,486 (446)Growth management andcomprehensive planning 1,735,608 2,136,941 1,788,119 348,822
County administrator 970,396 970,396 913,035 57,361Financial and administrativeservices 836,027 836,027 696,597 139,430
Total general government (BCC) 13,945,601 15,205,937 14,291,491 914,446
Continued
Walton County, FloridaGeneral Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual Continued
For the Year Ended September 30, 2015
See accompanying notes to financial statements.32
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
Public SafetyFire coordination 9,449,382 9,767,912 9,230,558 537,354Parole and probation 360,570 360,570 346,184 14,386Animal control 126 (126)Emergency operations center 294,507 342,565 306,274 36,291Emergency medical services 8,703 4,348 4,355Medical examiner 216,960 216,960 216,960
Total public safety 10,321,419 10,696,710 10,104,450 592,260
Physical EnvironmentExtension service 330,998 330,998 298,112 32,886Natural resource conservationservice 92,373 92,373 82,125 10,248
Total physical environment 423,371 423,371 380,237 43,134
Economic EnvironmentEconomic development 140,206 140,206 140,206Veteran services 124,158 124,158 117,240 6,918
Total economic environment 264,364 264,364 257,446 6,918
Human ServicesHealth department 1,870,520 1,870,520 1,610,127 260,393Community service 18,676 18,676 18,676Mental health 24,469 14,063 14,063Welfare 20,344 30,750 36,419 (5,669)Developmental disabilities 13,219 13,219 13,219
Total human services 1,947,228 1,947,228 1,692,504 254,724
Cultural and RecreationLibrary 843,638 864,485 795,409 69,076Parks and recreation 226,440 318,157 221,183 96,974
Total cultural and recreation 1,070,078 1,182,642 1,016,592 166,050
Continued
Walton County, FloridaGeneral Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual Continued
For the Year Ended September 30, 2015
See accompanying notes to financial statements.33
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
Reserved for Contingencies 400,000 23,038 23,038
Debt ServicePrincipal 187,695 (187,695)Interest 1,549 (1,549)
Total debt service 189,244 (189,244)
Total expenditures by BCC 28,372,061 29,743,290 27,931,964 1,811,326
General Government Constitutional OfficersClerk of the Courts 702,310 (702,310)Property Appraiser 1,879,138 1,879,138 1,709,174 169,964Tax Collector 2,378,651 2,385,430 2,572,405 (186,975)
Total expenditures by generalgovernment constitutionalofficers 4,257,789 4,264,568 4,983,889 (719,321)
Total expenditures 32,629,850 34,007,858 32,915,853 1,092,005.
Excess Revenues Over (Under)Expenditures (362,952) (485,333) 3,879,592 4,364,925
Other Financing Sources (Uses)Transfers in 2,250,000 2,395,009 2,395,009Transfers out (4,930,470) (5,013,232) (5,013,232)Issuance of debt 18,625 18,625
Total other financing sources (2,680,470) (2,618,223) (2,599,598) 18,625
Net change in fund balance (3,043,422) (3,103,556) 1,279,994 4,383,550
Fund Balance beginning 20,603,498 20,603,498 20,603,498
Fund Balance ending 17,560,076$ 17,499,942$ 21,883,492$ 4,383,550$
Walton County, FloridaCounty Transportation Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
See accompanying notes to financial statements.34
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 3,753,708$ 3,753,708$ 3,633,573$ (120,135)$Intergovernmental 2,312,237 25,677,031 13,363,940 (12,313,091)Investment earnings (losses) 215,071 215,071 37,108 (177,963)Miscellaneous 1,103,252 1,612,744 1,486,089 (126,655)
Total revenues 7,384,268 31,258,554 18,520,710 (12,737,844)
ExpendituresCurrentTransportation 20,710,291 48,563,653 29,429,954 19,133,699
Excess Revenues Over (Under)Expenditures (13,326,023) (17,305,099) (10,909,244) 6,395,855
Other Financing SourcesTransfers in 10,868,623 10,868,623 10,868,623
Net change in fund balance (2,457,400) (6,436,476) (40,621) 6,395,855
Fund Balance beginning 9,031,190 9,031,190 9,031,190
Fund Balance ending 6,573,790$ 2,594,714$ 8,990,569$ 6,395,855$
Walton County, FloridaFine and Forfeiture Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
See accompanying notes to financial statements.35
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 24,331,778$ 24,331,778$ 23,605,848$ (725,930)$Licenses and permits 1,000 1,000Intergovernmental 307,500 453,680 864,894 411,214Charges for services 250,000 2,209,658 2,050,681 (158,977)Fine and forfeitures 60,000 60,000 58,863 (1,137)Investment earnings 58,493 58,493 26,717 (31,776)Miscellaneous 282,000 60,201 76,164 15,963
Total revenues 25,289,771 27,173,810 26,684,167 (489,643)
ExpendituresCurrentPublic safetySheriff department 24,563,182 26,727,221 26,337,649 389,572
Debt servicePrincipal 100,000 (100,000)
Total expenditures 24,563,182 26,727,221 26,437,649 289,572
Excess Revenues Over (Under)Expenditures 726,589 446,589 246,518 (200,071)
Other Financing Sources (Uses)Transfers in 280,000 (280,000)
Net change in fund balance 726,589 726,589 246,518 (480,071)
Fund Balance beginning 1,282,092 1,282,092 1,282,092
Fund Balance ending 2,008,681$ 2,008,681$ 1,528,610$ (480,071)$
Walton County, FloridaTourist Development Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
See accompanying notes to financial statements.36
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 16,890,000$ 16,890,000$ 20,146,264$ 3,256,264$Intergovernmental 33,961 33,961Charges for services 15,788 15,788Investment earnings 226,983 226,983 249,562 22,579Miscellaneous 1,330,984 1,330,984 980,911 (350,073)
Total revenues 18,447,967 18,447,967 21,426,486 2,978,519
ExpendituresCurrentEconomic environmentTourist development 18,406,092 23,066,376 13,966,687 9,099,689
Debt servicePrincipal 842,106 842,106 842,105 1Interest 49,769 49,769 29,423 20,346
Total expenditures 19,297,967 23,958,251 14,838,215 9,120,036
Excess Revenues Over (Under)Expenditures (850,000) (5,510,284) 6,588,271 12,098,555
Fund Balance beginning 46,419,187 46,419,187 46,419,187
Fund Balance ending 45,569,187$ 40,908,903$ 53,007,458$ 12,098,555$
Walton County, FloridaSolid Waste Landfill Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
See accompanying notes to financial statements.37
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 16,051,000$ 16,051,000$ 17,838,177$ 1,787,177$Intergovernmental 90,909 79,429 (11,480)Charges for services 100,000 100,000 151,509 51,509Investment earnings 80,373 80,373 38,756 (41,617)Miscellaneous 260,000 260,000 253,411 (6,589)
Total revenues 16,491,373 16,582,282 18,361,282 1,779,000
ExpendituresCurrentPhysical environmentGarbage and solid waste 10,859,220 11,701,438 10,189,621 1,511,817
Excess Revenues OverExpenditures 5,632,153 4,880,844 8,171,661 3,290,817
Other Financing Sources (Uses)Transfer in 660,470 660,470 660,470Transfers out (8,598,623) (8,598,623) (8,598,623)
Total other financing sources (uses) (7,938,153) (7,938,153) (7,938,153)
Net change in fund balance (2,306,000) (3,057,309) 233,508 3,290,817
Fund Balance beginning 8,039,630 8,039,630 8,039,630
Fund Balance ending 5,733,630$ 4,982,321$ 8,273,138$ 3,290,817$
Walton County, FloridaStatement of Net Position
Proprietary FundSeptember 30, 2015
See accompanying notes to financial statements.38
GovernmentalActivities
Internal ServiceFund
AssetsCash and cash equivalents 678,860$
LiabilitiesCurrent liabilitiesAccrued compensated absences 103,876
Non current liabilitiesAccrued compensated absences 574,984
Total liabilities 678,860
Net Position $
Walton County, FloridaStatement of Revenues, Expenses and Changes in Net Position
Proprietary FundFor the Year Ended September 30, 2015
See accompanying notes to financial statements.39
GovernmentalActivities
Internal ServiceFund
Operating RevenuesCharges for services 100,568$
ExpensesPersonal services 100,568
Change in net position
$Net Position ending
Net Position beginning
Walton County, FloridaStatement of Cash Flows
Proprietary FundFor the Year Ended September 30, 2015
See accompanying notes to financial statements.40
GovernmentalActivities
Internal ServiceFund
Cash Provided by (Used in) Operating ActivitiesPayments on compensated absences liability (65,774)$Funding of compensated absences liability 100,568
Net increase in cash and cash equivalents 34,794
Cash and cash equivalents at the beginning of the year 644,066
Cash and cash equivalents at the end of the year 678,860$
Reconciliation of Change in Net Position to CashProvided by Operating Activities
Change in net position $
Increase in liabilities:Compensated absences payable 34,794
34,794$Cash Provided by (Used in) Operating Activities
Walton County, FloridaStatement of Fiduciary Net Position
September 30, 2015
See accompanying notes to financial statements.41
AgencyFunds
AssetsCash 4,604,173$Receivables, net 1,976
Total assets 4,606,149$
LiabilitiesDue to other governments 1,088,105$Deposits 2,638,797Due to individuals 879,247
Total liabilities 4,606,149$
Walton County, Florida
Notes to Financial Statements_____________________________________________________________________
42
NOTE
1 Summary of Significant Accounting Policies
2 Stewardship, Compliance, and Accountability
3 Cash, Cash Equivalents and Investments
4 Receivables
5 Interfund Activity
6 Restricted Assets
7 Capital Assets
8 Long Term Debt
9 Revenues Pledged
10 Deferred Outflows of Resources
11 Recognition of Landfill Closure and Post Closure Costs
12 Net Position
13 Fund Balance
14 Employee Retirement System
15 Post Employee Benefits Other Than Pension
16 Commitments and Contingencies
17 Risk Management
18 Litigation
19 Prior Period Adjustment
20 Subsequent Events
21 Special Items
Walton County, Florida
Notes to Financial Statements_____________________________________________________________________
43
The financial statements of Walton County, Florida (the County) have been prepared in conformitywith generally accepted accounting principles (GAAP) as applied to government units in accordancewith the Governmental Accounting Standards Board (GASB). The GASB is the acceptedstandard setting body for establishing governmental accounting and financial reporting principles.The following notes to the financial statements are an integral part of the County's basic financialstatements.
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The County is a political subdivision of the State of Florida created pursuant to Article VIII of theState Constitution with geographical boundaries as established in Florida Statutes Chapter 7.66. Itis guided by an elected Board of County Commissioners (the Board) which is governed by statestatutes. In addition to the members of the Board, there are five elected Constitutional Officers:Tax Collector, Property Appraiser, Clerk of the Circuit Court, Sheriff, and Supervisor of Elections.The operations of the County as a whole, including the constitutional officers, have been combinedin these financial statements.
As required by accounting principles generally accepted in the United States of America, thesefinancial statements present the government and its component units, entities for which thegovernment is considered to be financially accountable. A discretely presented component unit,Florida Community Services Corporation of Walton County (FCSC) which has a February 28 yearend, is reported in a separate column in the financial statements to emphasize it is legally separatefrom the government.
Discretely Presented Component Unit
Florida Community Services Corporation of Walton County (FCSC) was organized under the laws ofthe State of Florida on August 7, 1985. FCSC was incorporated as a non profit corporation understate law. On November 26, 1985, the Board by Ordinance 85 15 rescinded the Public ServiceCommission's jurisdiction over FCSC and transferred regulatory authority, including utility rateapproval, to the Board. FCSC was formed to acquire and improve existing water distributionfacilities in the southern part of the County for incorporation into a county regional utility systemand to construct a regional sewage collection treatment and disposal facility and watertransmission, storage and distribution system, exclusively for the benefit of the primarygovernment. To fulfill its purpose, FCSC has issued revenue bonds pledging its property andrevenues to secure the payment of such bonds. After the bonds have been fully paid, FCSC withoutconsideration will transfer all of its assets to the County. FCSC retains all revenue generated by thesystem to provide for debt service and maintaining the system. The Corporation is reported as aproprietary fund type. Because rate or fee changes that affect revenues are approved by the Boardthereby allowing the primary government to significantly influence the day to day operations ofFCSC, the financial statements of FCSC are included in the basic financial statements of the Countyas a component unit.
Walton County, Florida
Notes to Financial Statements_____________________________________________________________________
44
Complete financial statements of the component unit can be obtained directly from itsadministrative office listed below:
Florida Community Services Corporation of Walton County4432 Highway 98 EastSanta Rosa Beach, Florida 32459
Government Wide and Fund Financial Statements
The basic financial statements consist of the government wide financial statements and fundfinancial statements. Government wide financial statements include a Statement of Net Positionand a Statement of Activities. These statements report on the government as a whole, both theprimary government and its component unit, and provide a consolidated financial picture of thegovernment. As part of the consolidation process, inter fund activities, with the exception of interfund services provided and used, are eliminated to avoid distorted financial results. Fiduciary fundsof the government are also eliminated from this presentation since these resources are notavailable for general government funding purposes. The Statement of Net Position reports allfinancial and capital resources of the County’s governmental activities. It is presented in a netposition format (assets plus deferred outflows of resources less liabilities less deferred inflows ofresources equal net position) and shown with three components: net investment in capital assets,restricted net position and unrestricted net position. The Statement of Activities reports functionalcategories of programs provided by the County, and demonstrates how and to what degree thoseprograms are supported by specific revenue.
Program revenues are classified into three categories: charges for services, operating grants andcontributions, and capital grants and contributions. Charges for services refer to direct recoveryfrom customers for services rendered. Grants and contributions refer to revenues restricted forspecific programs whose use may be restricted further to operational or capital items. The generalrevenue section displays revenue collected that help support all functions of government andcontribute to the change in the net assets for the fiscal year.
The fund financial statements follow and report additional and detailed information about theCounty’s operations for major funds individually and nonmajor funds in the aggregate forgovernmental, proprietary and fiduciary funds. Reconciliation is provided that converts the resultsof governmental fund accounting to the government wide presentations. The preparation offinancial statements in conformity with generally accepted accounting principles, as applicable togovernmental units, requires management to make use of estimates that affect the reportedamounts in the financial statements. Actual results could differ from estimates.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government wide financial statements, as well as the fund financial statements for theproprietary fund, are reported using the economic resources measurement focus and the accrualbasis of accounting. Revenues are recognized in the period in which they are earned and expensesare recognized in the period incurred. Operating revenues for proprietary operations generallyresult from charges for services related to the funding of compensated absences for the Clerk of the
Walton County, Florida
Notes to Financial Statements_____________________________________________________________________
45
Courts and the Supervisor of Elections. Operating expenses for the proprietary fund consists ofcosts related to providing the funding of compensated absences for the Clerk of the Courts and theSupervisor of Elections. These costs include compensated absence expense and all related fringecosts. All other revenue and expenses not meeting these definitions are reported as non operatingrevenues and expenses. Property taxes are recognized as revenue in the year for which they arelevied. Grants are recognized as revenue upon completion of the grant requirements.
All governmental fund financial statements are reported using a current financial resourcesmeasurement focus on a modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized in the accounting period in which they become bothmeasurable and available to finance expenditures of the current period. Available means collectiblewithin the current period or soon enough thereafter to be used to pay liabilities of the currentperiod, considered to be sixty days for property taxes and ninety days for all other revenue.
Expenditures are recorded when the related fund liabilities are incurred. Exceptions to this generalrule include: (1) accumulated sick pay and accumulated vacation pay, which are not recorded asexpenditures; (2) prepaid insurance and similar items, which are reported only on the balance sheetand do not affect expenditures; and (3) principal and interest on long term debt, which arerecognized when due. Budgets for governmental funds are also prepared on the modified accrualbasis.
In applying the susceptibility to accrual concept to intergovernmental revenues, the legal andcontractual requirements of the numerous individual programs are used as guidance. There are,however, essentially two types of these revenues. In one, monies must be expended for thespecific purpose or project before any amounts will be paid to the County; therefore, revenues arerecognized based upon the expenditures recorded. In the other, monies are virtually unrestrictedas to purpose of expenditure and substantially irrevocable; i.e., revocable only for failure to complywith prescribed compliance requirements, such as with equal employment opportunity. Theseresources are reflected as revenues at the time of receipt or earlier if they meet the availabilitycriterion.
Licenses and permits, charges for services, and miscellaneous revenues (except investmentearnings) are recorded as revenues when received in cash, because they are generally notmeasurable until actually received. Investment earnings and most fines and forfeitures arerecorded as earned since they are measurable and available.
When both restricted and unrestricted resources are available for use, it is the government’s policyto use restricted resources first, then unrestricted resources as they are needed.
The accounting policies and the presentation of the financial report of the County have beendesigned to conform to generally accepted accounting principles (GAAP) as applicable togovernmental units, in accordance with the Governmental Accounting Standards Board (GASB).
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The following are reported as major governmental funds:
General Fund – This fund is established to account for resources devoted to financing thegeneral services that the County performs for its citizens. General tax revenues and othersources of revenue used to finance the fundamental operations of the County are included inthis fund. The fund is charged with all costs of operating the government for which a separatefund has not been established.
County Transportation Special Revenue Fund – To account for ad valorem, motor fuel taxes,state revenue sharing and various grant funds designated to finance highway and roadconstruction and maintenance.
Fine and Forfeiture Special Revenue Fund – To account for ad valorem taxes, fines, forfeitures,grants, expenditures and transfers to the Walton County Sheriff’s Department (Sheriff)necessary to carry out the obligations of the office of Sheriff as detailed in Florida StatutesChapter 30.15.
Tourist Development Council Special Revenue Fund – To account for grants and the localoption tourist development tax related to the tourist industry. Fund activity is designated forthe promotion of tourism and beach renourishment in the County.
Solid Waste Landfill Special Revenue Fund – To account for one cent County surtax, stategrants, landfill fees, and scrap sales designated for the operation of the landfill.
Debt Service Fund – To account for the accumulation of resources and debt service on theCounty’s 2013 half cent sales surtax note.
Capital Projects Fund – To account for financial resources used for the acquisition orconstruction of major capital facilities, other than those financed by proprietary operations.
The County also reports the following fund types:
Internal Service Fund (a proprietary fund) – Used to report funded and accrued compensatedabsences.
Agency Funds – To account for assets held by the County in a trustee capacity or as an agent forindividuals, other governmental units and/or funds. Agency Funds are custodial in nature anddo not involve measurement of results of operations. These funds are accounted for on theaccrual basis of accounting. Used to account for licenses, tags, and property taxes collected andremitted to other taxing authorities; funds held in general agency trust, juror and witnessadvances, for compliance with court orders, child support, and inmate cash bonds; andunclaimed tax deed sales.
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Budgetary Accounting
Basis of Budgetary Accounting Annual budgets for governmental fund types that are legallyrequired to prepare an annual budget are adopted on a basis consistent with GAAP. Allappropriations lapse at year end.
The following special revenue funds are not budgeted and budget information is not presented:Inmate Canteen (Sheriff), Special Law Enforcement, Preservation, State Law Enforcement Trust,Abandoned Property, Marijuana Eradication, Federal Forfeiture Sharing, Drug Control, LawEnforcement Education, Law Enforcement Automation, Domestic Violence Trust, Crime PreventionTrust, Aviation and Traffic and Parking Enforcement.
Board of County Commissioners Pursuant to Chapter 129, Florida Statues, General BudgetPolicies, the following procedures are followed by the Board in establishing, adopting and maintaining the operating budget.
Prior to July 15, the Director of the Office of Management and Budget and the Clerk of the CircuitCourt, as ex officio Clerk of the Board, submits to the Board a tentative budget for the fiscal yearcommencing the following October 1.
Taxpayers are informed of the proposed budget and tentative millage rates through legaladvertising. Public hearings are held to elicit taxpayer comments.
Prior to September 30, the budget is legally adopted through passage of a resolution for the fiscalyear beginning October 1.
The Board, at any time within a fiscal year, may amend a budget for that year as follows:
Appropriations for expenditures in any fund may be decreased and other appropriations in thesame fund correspondingly increased by motion recorded in the minutes, provided that thetotal of the appropriations of the fund are not changed. The Board, however, has establishedprocedures by which the designated budget officer and heads of departments may authorizecertain interdepartmental budget amendments, provided that the total appropriations of thedepartment are not changed.
Florida Statute 129, Section 7, as amended in 1978, provides that only expenditures in excess oftotal fund budgets are unlawful. However, because the Board acts on all budget changesbetween departments, the lower of fund or department becomes the level of control.
Appropriations from the reserve for contingencies may be made to increase the appropriationfor any particular expenditure in the same fund, or to create an appropriation in the fund forany lawful purpose, but no expenditures shall be charged directly to the reserve forcontingencies.
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A receipt of a nature or from a source not anticipated in the budget and received for a particularpurpose, including but not limited to grants, donations, gifts, or reimbursements for damages,may, by resolution of the Board recorded in its minutes, be appropriated and expended for thatpurpose, in addition to the appropriations and expenditures provided for in the budget. Suchreceipts and appropriations shall be added to the budget of the proper fund.
Supplemental appropriations funded from sources not described above, require public hearingsand action by the Board in the same manner as adopting the original budget.
Clerk of the Court – Florida Statutes Chapter 218.35 and 218.36 governs the preparation, adoptionand administration of the Clerk of the Circuit Court’s annual budget. The Clerk establishes anannual balanced budget which clearly reflects the revenues available to the office and the functionsfor which the money is to be expended.
The Clerk of the Circuit Court, functioning in the capacity as Clerk of the Circuit and County Courtsand as Clerk of the Board, prepares a budget in two parts:
The budget relating to the state court system (Circuit and County) is filed with and approved bythe Florida Clerk of the Court Operations Corporation; and
The budget approved by the Board for funds necessary to perform those duties of Clerk of theBoard, County Auditor, and Custodian or Treasurer of all County funds and other County relatedduties.
The Comptroller and Clerk of Court Departments within the Clerk's office such as Finance and MISthat deal primarily or exclusively with the County are budgeted with appropriations from the Board.The fees generated by the various non court departments of the Clerk of Circuit Court are used topay operating expenditures of that department. All excess fees are remitted to the Board at yearend.
Sheriff Florida Statutes Chapter 30.49 and 129.03 governs the preparation, adoption andadministration of the Sheriff's annual budget. By June 1 each year, the Sheriff shall certify to theBoard a proposed budget of expenditures for carrying out the duties of his office for the ensuingfiscal year. No later than August 1 of each year, the Board shall approve the Sheriff's budget. TheSheriff’s budget is funded primarily from property taxes maintained in the Fine and Forfeiture Fund.
Tax Collector and Property Appraiser Florida Statutes Chapter 195.087 details the preparation,adoption and administration of the budgets of the Tax Collector and Property Appraiser. On orbefore a legally designated date each year, the Tax Collector and the Property Appraiser shallsubmit to the Florida Department of Revenue a budget for the ensuing fiscal year. A copy of suchbudget shall be furnished at the same time to the Board. Final approval of the budgets is given bythe Florida Department of Revenue.
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Supervisor of Elections Florida Statutes Chapter details the preparation, adoption and administration of the budget of the Supervisor of Elections. The Supervisor of Elections works incooperation with the Board to establish an annual budget for his office. The Supervisor of Electionsbudget is funded from the Board’s General Fund.
Cash, Cash Equivalents, and Pooled Cash Investments
Cash, cash equivalents, and pooled cash investments represents cash on hand as well as demanddeposits, and certificates of deposit with original maturities of three months or less. This policyapplies to the primary government and its component unit.
Investments
As governed by Florida Statute 218 and the County’s investment policy, the County is authorized toinvest available surplus funds to the extent noted in the following:
1. Local Government Surplus Funds Trust Fund Investment Pool (the SBA), the StateInvestment Pool administered by the Florida State Board of Administration – 50%
2. Florida Local Government Investment Trust (FLGIT) administered by the Florida Associationof Court Clerks and the Florida Association of Counties – 50%
3. Securities and Exchange Commission registered money market funds with the highest creditquality rating from a nationally recognized rating agency – 50%
4. Savings and Certificates of Deposit in state qualified public depositories – 50%
5. Direct obligations of the U.S. Treasury – 100%
6. Public funds checking – 100%
7. U.S. Government Instrumentality Debt (i.e. Federal Farm Credit Bureau) – 50%
8. High grade Corporate debt, including Eurodollar notes and bonds – 50%
9. Mortgaged back securities – 50%
10. State and Local Taxable and/or Tax exempt debt – 50%
11. Equities – 20%
12. Income Trusts – 20%
13. Mutual Funds – 20%
Investments are stated at fair value in accordance with GASB Statement No. 31. U.S. Treasury notesand U.S. agency and instrumentalities obligations are valued at quoted market. The reported valueof the Local Government Surplus Funds Trust Fund Investment Pool’s Prime account (“Prime”) is
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shown at share value as it meets the criteria to be “2A 7 Like” at September 30. The LocalGovernment Investment Pool Fund B does not meet the requirements of a SEC 2a7 like fund; and isvalued using a fair value factor. The Florida Local Government Investment Trust (“FLGIT”) reportsall share information at Net Asset Value (NAV) and reflects fair value.
The County invests funds throughout the year in the Prime account, administered by the StateBoard of Administration (“SBA”), under the regulatory oversight of the State of Florida. Throughoutthe year and as of September 30, 2015, the SBA contained certain floating and variable ratesecurities which were indexed based on the prime rate and/or one and three month LIBOR rates.These investments were purchased to add relative value to its portfolio. There is a risk of loss ofinterest on the investments if there are changes in the underlying indexed base. These investmentsrepresented 36% of the SBA’s Prime account at September 30, 2015.
The County also invests throughout the year in the FLGIT, a public entity investment trust organizedunder the laws of the State of Florida. FLGIT is based on current net asset value, variations in valueof these assets is determined on a daily basis in the FLGIT portfolio. At September 30, 2015, theFLGIT portfolio included certain asset backed securities, corporate securities and mortgage backedsecurities. These securities amounted to 18%, 27% and 5% respectively of the FLGIT InvestmentTrust portfolio. The asset backed securities and mortgage backed securities have an average creditquality rating of AAAf as rated by Standard and Poor’s.
The County’s investments and portfolio allocation is determined by an investment committeecomprised of the Clerk of Court (the Clerk) or his designee, the Board of County Commissioners’Finance Director or her designee, and two other advisors, one to be named by the Clerk and one bythe Boards’ Finance Director.
The Portfolio of investments is maintained by the Clerk who provides a portfolio report quarterly(or more often if requested) to the Board. The report provides a breakdown of the portfolio as wellas overall performance. Investments for the County, as well as for its component unit, are reportedat fair value.
Receivables and Unbilled Revenue
Estimated unbilled revenues in the component unit statements are accrued at year end by prorating actual subsequent billings.
Allowance for Doubtful Accounts
The component unit provides for doubtful accounts based on analysis of individual accounts. Forcustomer accounts, an allowance is created for accounts that are 120 days past due. For developerreceivables, an allowance has been created for the full amount of all past due developerreceivables.
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Inventories and Prepaid Items
Inventories are stated at cost determined by the first in, first out cost method. The County uses theconsumption method of accounting for inventories. Payment for goods and services applicable tofuture period are recorded as prepaid items in both government wide and fund financialstatements.
Interfund Loans and Transfers
Activities between funds that are representative of lending/borrowing arrangements outstanding atthe end of the fiscal year are referred to as either “due to/from other funds” (i.e., the currentportion of inter fund loans) or “advances to/from other funds” (i.e., the non current portion ofinter fund loans). All other outstanding balances between funds are reported as “due to/fromother funds.”
Restricted Assets
The debt service fund, solid waste landfill fund, and component unit, based on certain bondcovenants and regulations, are required to establish and maintain prescribed amounts of resources(consisting of cash and temporary investments) that can be used only to service outstanding debtand landfill closure cost.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads,bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems) arereported in the applicable governmental activities columns in the government wide financialstatements. Additions to capital assets are recorded at cost at the time of purchase. Gifts orcontributions are recorded at fair market value at the time received.
The County maintains a $5,000 threshold for additions to equipment and a $25,000 threshold foradditions to land, buildings, infrastructure and other capital assets. The County also maintains afixed asset listing for all tangible personal property equal to or greater than $1,000 as required byFlorida Statute 274 and Florida Administrative Code Sections 69(i) 73.002 and 69(i) 73.006.
Depreciation has been provided using the straight line method. The estimated useful lives of thevarious classes of depreciable capital assets are as follows:
Asset Years
Buildings 30 40Building improvements 30 40System infrastructure 20Vehicles 5Equipment 5 7Improvements other than buildings 20
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Bond Premiums, Discounts and Issuance Costs
Bond premiums and discounts are deferred and amortized as a component of interest expense overthe remaining useful life of the related debt. Debt issuance costs are considered outflows ofresources in the period incurred and accordingly, are expensed at the time of debt issuance.
Unamortized Bond Insurance
Unamortized debt expense related to bond insurance is amortized by using the outstandingprincipal method over the life of the related debt and is recorded as unamortized bond insurance.Other bond issuing costs are expensed when incurred. In the fund financial statements,governmental fund types recognize bond issuance costs during the current period as debt serviceexpenditures.
Losses on Refunding
Losses on refunding resulting from differences between the costs incurred to refund debt and thecarrying value of the refunded debt at the time of refunding are deferred and amortized on thestraight line basis over the shorter of the term of the new debt or the refunded debt. Unamortizedlosses on refunding are presented as deferred outflows of resources within the Statement of NetPosition. The County reported no losses on refunding. The component unit reported a loss onrefunding and is presented on the statement of net position as a deferred outflow of resources.
Compensated Absences
It is the County's policy to allow employees to accumulate unused sick leave and vacation benefits.For the fiscal year ended September 30, 2015, for all governmental fund types, the liability relatingto such vested unused vacation and sick leave to the extent of certain maximum hours is recordedin the accompanying financial statements. Expenditures for compensated absences ingovernmental funds are those paid during the current fiscal year and the amount unpaid at the endof the reporting period that normally would be liquidated with expendable available financialresources.
Accumulated annual and sick leave is accrued when incurred in the government wide andproprietary fund financial statements. A liability for these amounts is reported in governmentalfund only if they have matured, for example, as a result of employee resignations and retirements.Compensated absences of the component unit were recorded on the accrual basis as noncurrentliabilities.
Lease Obligations
Capital lease obligations are stated at the original fair market value of leased assets capitalized, lesspayments since the inception of the lease discounted at the implicit rate of interest in the lease.
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Also, in the year an asset is acquired by capital lease, the expenditure for the asset and theoffsetting amount of the financing source are reflected in the fund financial statements in theStatement of Revenues, Expenditures and Changes in Fund Balances. Capital lease obligations ofproprietary funds and governmental activities in the government wide financial statements arereported as depreciable assets and lease obligations payable. The County has elected not to utilizeany operating leases and all such leases were expired as of September 30, 2014.
Long Term Liabilities
For long term liabilities, only that portion expected to be financed from expendable availablefinancial resources is reported as a fund liability of a governmental fund. All long term liabilities arereported in the government wide financial statement of net position.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section fordeferred outflows of resources. This separate financial statement element, deferred outflows ofresources, represents a consumption of net position that applies to a future period and so will notbe recognized as an outflow of resources (expense/expenditure) until then. The County haddeferred outflows at year end related to various actuarial assumption changes and valuationsrelated to the County’s portion of the Florida Retirement System Pension Plan and Retiree HealthInsurance Subsidy Program annual valuations, and retirement contribution payments made by theCounty after the valuation date of the Florida Retirement System’s latest valuation but before theend of the County’s fiscal year.
In addition to liabilities, the statement of net position will sometimes report a separate section fordeferred inflows of resources. This separate financial statement element, deferred inflows ofresources, represents an acquisition of net position that applies to a future period and so will not berecognized as an inflow of resources (revenue) until that time. The only such item at year endconsists of various actuarial assumption changes and valuations related to the County’s portion ofthe Florida Retirement System Pension Plan and Retiree Health Insurance Subsidy Program annualvaluations. These amounts are recognized as inflows of resources in the period that they becomeavailable.
Net Position/Fund Equity
Net position is reported on the government wide financial statements and is required to beclassified for accounting and reporting purposes into the following net asset categories:
Net investment in capital assets Capital assets, net of accumulated depreciation andoutstanding principal balances of debt attributable to the acquisition, construction, orimprovement of those assets. Any significant unspent proceeds at year end related to capitalassets are reported as restricted funds.
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Restricted – Constraints imposed on net position by external creditors, grantors, contributors,laws or regulations of other governments, or law through constitutional provision or enablinglegislation.
Unrestricted – Net position that is not subject to externally imposed stipulations. Unrestrictednet position may be designated for specific purposes by action of the Board.
Fund equity is reported in the fund financial statement in two major categories: nonspendable andspendable.
Fund balance is classified as follows:
Nonspendable – Amounts that cannot be spent because they are either not spendable in formor they are legally or contractually required to be maintained intact.
Restricted – Amounts that can be spent only for purposes stipulated by external parties,constitutional provision or enabling legislation.
Committed – Amounts constrained for a specific purpose by the Board.
Assigned – Includes spendable fund balance amounts established by the Board of CountyCommissioners (resolution) that are intended to be used for specific purposes and are neitherconsidered restricted or committed.
Unassigned – Unassigned fund balance is the residual classification for the general fund. Thisclassification represents fund balance that is spendable and that has not been restricted,committed, or assigned to specific purposes within the general fund. Unassigned fund balancemay also include negative balances for any governmental fund if expenditures exceed amountsrestricted, committed, or assigned for those specific purposes.
The authority to establish, modify or rescind a committed or assigned fund balance rests with theBoard and these actions are accomplished through an adopted resolution. When both restrictedand unrestricted resources are available for use, it is the government’s policy to use restrictedresources first, then unrestricted resources as they are needed. When expenditures are incurredfor purposes for which amounts in any of the unrestricted fund balance classifications could beused, it is the County’s policy to use committed funds first, then assigned, and finally unassigned.
Property Taxes
Property taxes in the County are levied by the Board. The millage levies are determined on thebasis of estimates of revenue needs and the total taxable valuations within the jurisdiction of theBoard. No aggregate ad valorem tax millage in excess of 10 mills on the dollar is levied againstproperty of the County as specified in Florida Statue 200.071.
Each year the total taxable valuation is established by the County Property Appraiser and the list ofproperty assessments is submitted to the State Department of Revenue for approval. Taxes,assessed as of January 1 of each year, are due and payable on November 1 of each year or as soon
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thereafter as the assessment roll is opened for collection. Pursuant to Florida Law, all owners ofproperty have the responsibility of ascertaining the amount due and paying it before April 1 of theyear following the year in which the tax was assessed.
2015 property tax calendar:Lien date January 1, 2014Levy date November 1, 2014Tax bills mailed November 1, 2014
Collection dates November 30, 2014: 4% discountThrough January 2, 2015: 3% discountThrough January 31, 2015: 2% discountThrough February 28, 2015: 1% discount
Delinquent date April 1, 2015Tax sale 2014 delinquent property taxes on or before June 1, 2015
Management Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could vary from estimates used.
Recent Accounting Pronouncements
In fiscal year 2015, the County adopted the following new statements of financial reporting issuedby the Governmental Accounting Standards Board:
GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment ofGASB Statement No. 27. This statement establishes new requirements for governments toreport at the government wide reporting level a “net pension liability” for the unfunded portionof its pension plan. Governments that maintain their own pension plans (either single employeror agent multi employer) will report a liability for the difference between the total pensionliability calculated in accordance with GASB Statement 67 and the amount held in the pensiontrust fund. Governments that participate in a cost sharing plan will report a liability for their“proportionate share” of the net pension liability of the entire system.
Historically, governments have only been required to report a net pension obligation to theextent that they have not met the annual required contribution (ARC) in any given year. Uponimplementation on this standard, governments will be required to report a net pension liabilitybased on the current funded status of their pension plans. The adoption of this statementresulted in a restatement of the County’s 2014 government wide financial statements netposition in the amount of ($37,086,830) to reflect the reporting of net pension liabilities anddeferred inflows of resources and deferred outflows of resources. Changes in this liability fromyear to year will largely be reflected on the statement of activities, though certain amounts willbe deferred and amortized over varying periods.
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GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to theMeasurement Date – an amendment of GASB Statement No. 68. This statement amends GASBStatement No. 68 to require that, at transition, a government recognize a beginning deferredoutflow of resources for its pension contributions, if any, made subsequent to themeasurement date of the beginning pension liability.
In fiscal year 2016, the County will adopt the following new statements of financial reporting issuedby the Governmental Accounting Standards Board:
GASB Statement No. 72, Fair Value Measurement and Application. This Statement requires theCounty to use valuation techniques which are appropriate under the circumstances and areeither a market approach, a cost approach or an income approach. Statement No. 72establishes a hierarchy of inputs used to measure fair value consisting of three levels. Level 1inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs areinputs, other than quoted prices included within Level 1, that are observable for the asset orliability, either directly or indirectly. Level 3 inputs are unobservable inputs, such asmanagement’s assumption of the default rate among underlying mortgages of a mortgagebacked security. Statement No. 72 also contains note disclosure requirements regarding thehierarchy of valuation inputs and valuation techniques that was used for the fair valuemeasurements.
NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
During the fiscal year 2015, there were supplemental appropriations of $89,583,655 or 64 percentof the original budget. The following items represent the major additional appropriations:
General FundVarious projects in work and capital projects 183,799$Various operating costs 751,401Various federal and state grants 525,570
Special Revenue FundsCounty Transportation TrustPaving projects funded with current revenue, federal andstate grants, and available fund balance 27,853,262
Fine and ForfeitureVarious federal and state grants 255,838Various personal services and operating costs 1,908,201
Tourist DevelopmentVarious operating and promotional expenditures 4,660,284
SolidWaste LandfillVarious capital improvements, facility repairs and upgrades 842,218
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Debt ServiceHalf cent sales tax notes 13,085,246
Capital ProjectsVarious capital improvements, facility repairs and upgrades 28,405,497
Nonmajor FundsCapital Project FundCapital Project Fund Mossy Head Industrial ParkVarious capital improvements, facility repairs and upgrades 8,454,000All other amendments 2,658,339
Total 89,583,655$
NOTE 3 – CASH, CASH EQUIVALENTS AND INVESTMENTS
Cash and cash equivalents are cash on hand, as well as demand deposits, investments, andcertificates of deposit included in pooled cash with original maturities of three months or less.Investments include non pooled investments and certificates of deposit with original maturities ofthree months or greater.
Investments
Investments at September 30, 2015 were comprised of the following reported at fair value:
Certificates of deposit 1,986,482$Money market funds 1,382,227Prime Fund (SBA) 121,285Florida Local Government Investment Trust (FLGIT) 9,769,911U.S. government and agency securities 10,872,084Municipal bonds 2,374,915Corporate bonds 25,372,662Equity securities 292,806Mutual funds 847,798
Total investments 53,020,170$
Custodial Credit Risk Deposits
The County and FCSC maintain cash balances at various banks which are “Qualified PublicDepositories” as defined by Chapter 280, Florida Statutes. Cash accounts are also insured by theFederal Deposit Insurance Corporation (FDIC) for up to $250,000.
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The entire amount of the Board’s demand deposits in fiscal year 2015 were transferred to a publicfund net interest bearing checking account, paying interest at the current federal funds rate less.05%, with no reserve requirements.
Custodial Credit Risk Investments
Custodial credit risk is the risk that in the event of the failure of the counterparty to a transaction,the Board will not be able to recover the value of its investments or collateralized securities that arein the possession of an outside party. The Board’s investments are held by the counterparty(s), orby their respective trust departments, not in the Board’s name. Consequently, these investmentsare exposed to custodial credit risk. The Board has no policy on custodial credit risk.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of aninvestment. Increases in prevailing fixed maturity investments fluctuate in responses to changes inmarket interest rates. Increases in prevailing interest rates generally translate into decreases in thefair value of those instruments. The fair value of interest sensitive instruments may also be affectedby the credit worthiness of the issuer, prepayment options, relative values of alternativeinvestments, and other general market conditions. Certain fixed maturity investments have callprovisions that could result in shorter maturity periods. The longer the maturity of an investment,the greater its price volatility. The County’s investment policy places no limit on the maturity ofinvestments.
Total More ThanInvestment Type Fair Value 0 1 Year 1 5 Year 5 10 Year 10 Year
Certificate of deposit 1,986,382 344,679$ 1,391,021$ $ 250,682$FLGIT 9,769,911 9,769,911Corporate bonds 25,330,146 3,080,456 20,122,676 1,234,182 892,832Municipal bonds 2,374,915 1,849,246 271,995 253,674U.S. Government andagency securities 5,887,971 1,694,364 2,001,474 149,903 2,042,230
45,349,325$ 14,889,410$ 25,364,417$ 1,656,080$ 3,439,418$
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributable to the quantity of the government’sinvestment in a single issuer. To limit concentration of credit risk, the County’s investment policyrequires diversification of the portfolio with maximum limits per investment type, as disclosed inNote 1. Investments in single issuers that equal or exceed 5% of total investments have areportable concentration of credit risk. Credit quality risk results from potential default ofinvestments that are not financially sound. The County’s investment policy requires that corporateand government debt instruments must be of investment grade as rated by a nationally recognizedrating agency.
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Concentration Percentage ofCredit Risk at Fair Total
Investment Type Rating Value Investments*
Florida Local Government InvestmentTrust (FLGIT) AAA 9,684,458$ 18.44%
Government National Mortgage AssociationAssociation (GNMA) N/A 2,043,078 3.89%
11,727,536$ 22.33%
*Excludes mutual funds, treasury notes, money market funds and SBA. SBA meets the criteria to berecognized as a “2A 7 like” investment company.
Florida Community Services Corporation – Investments Held
Investments held at February 28, 2015 were insured or registered, or are securities held by theCorporation or its agent in the Corporation’s name. Investments at February 28, 2015 consistedsolely of certificates of deposit with financial institutions. Certificates of deposit are reported atcost which approximates fair value. At February 28, 2015, investments in certificates of deposittotaled $15,006,053. The certificates of deposit bear interest of .23% and mature at in August2015.
NOTE 4 – RECEIVABLES
Accounts Receivables consists primarily of franchise fee and ambulance billings in the GeneralFund, Tourist Development Council tax in the Special Revenue Fund and fraud recoveries in theHousing and Urban Development (“HUD”) non major special revenue fund. All of these accountsreceivables are considered collectible and no allowance for uncollectibles is deemed necessary,except for ambulance billings which had a balance of $3,340,390 and an allowance of $3,140,390and HUD which had billings of $192,642 and an allowance of $192,642 at September 30, 2015.
Florida Community Services Corporation (FCSC) charges accounts to bad debt expense as they aredeemed uncollectible. At year end, the allowance for uncollectible accounts was $100,000, andtrade accounts receivable, net totaled $1,437,254.
Due From Other Governments is comprised of grants reimbursements of $7,118,284, refunds andexpenditure reimbursements of $499,374, and revenue sharing and taxes collected by the State forthe County $4,614,310.
Assessment Receivable is the amount due from property owners in various MSBUs. At September30, 2015, assessments receivable is comprised of the following: Daughette MSBU $26,090, 4 MileVillage MSBU $761,285 and Leisure Lake MSBU $112,379. Receivables are collected annually to theextent of the debt service on bonds issued to pay for the cost of infrastructure.
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Loans Receivable consists of a loan agreement with the City of Freeport for extension of water andsewer service in the Bay area. At September 30, 2015, the outstanding balance including unpaidinterest was $513,429. The remaining balance is to be paid interest free in 5 equal installments of$102,686 with the first installment due December 1, 2015.
FCSC Developers Agreements Receivable
At February 28, 2015, FCSC had a gross balance of $5,191,269 for accounts receivable related todeveloper's agreements. This amount represents payments owed by developers for waterand/or sewer connection fees under the terms of contracts between the parties and theCorporation. As of February 28, 2015, FCSC had taken legal action related to the collection of thepast due amounts by filing liens. However, management feels there is significant uncertaintyregarding the collectability of the past due amounts. Therefore, FCSC established an allowancefor doubtful accounts of $3,913,766 at February 28, 2015.
NOTE 5 – INTERFUND ACTIVITY
Receivables (due from other funds) and payables (due to other funds) resulting from variousinterfund transactions are as follows:
Due FromOther Funds:
General FundOther governmental funds 176$
Amount due from Housing and Urban Development of $176 is for postage reimbursement.All amounts due will be paid within one year of the financial statement date.
County TransportationTourist Development Council 5,385$Other governmental funds 105,000
110,385$
Amounts due from Tourist Develoment Council and other governmental funds representfleet charges. All amounts due will be paid within one year of the financial statement date.
Fine and ForfeitureGeneral Fund 1,010$Other governmental funds 2,954
3,964$
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Amounts due from General Fund and other governmental funds represent grant reimbursements. All amounts due will be paid within one year of the financial statement date.
Other Governmental FundsOther governmental funds 92,248$
Amount due from other governmental funds represent various operating and grant reimbursements. All amounts due will be paid within one year of the financial statement date.
Interfund Transfers
Transfers to General Fund from:Solid waste landfill 2,250,000$Other governmental funds 145,009Total 2,395,009$
Transfers to County Transportation Fund from :General fund 4,352,762Solid waste landfill 4,015,861Other governmental funds 2,500,000Total 10,868,623
Transfers to SolidWaste Landfill Fund from:General fund 660,470
Transfers to Capital Projects from:Solid waste landfill 2,332,762
Transfers to Other Governmental Funds from:Captial projects fund 678,360
Total interfund transfers 16,935,224$
Transfers are used to (1) use unrestricted general fund revenues to finance public safety and firedepartment activities that are accounted for in other funds, (2) use nonmajor governmental fundrevenues, general fund revenues and solid waste landfill revenues to cover road pavingexpenditures in county transportation fund, (3) transfer general fund revenues, solid waste landfillrevenues, and nonmajor governmental fund revenues to fund capital projects, and (4) transfergeneral fund revenues to fine and forfeiture fund for personnel services.
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NOTE 6 – RESTRICTED ASSETS
Restricted assets of the County are those required to be set aside for future debt service and landfillclosure requirements. FCSC includes assets restricted for debt service, as well as customer depositsand construction funds. Restricted assets are as follows:
Cash andCash Assessments
Equivalents Receivable Total
Walton County Primary GovernmentDebt service funds 1,427,758$ $ 1,427,758$Infrastructure improvements 899,772 899,772Landfill closure costs 1,154,692 1,154,692
2,582,450$ 899,772$ 3,482,222$
Florida Community Service CorporationDebt service funds 5,186,245$ $ 5,186,245$Renewal and replacement funds 922,829 922,829Customer deposits 1,674,958 1,674,958
7,784,032$ $ 7,784,032$
NOTE 7 – CAPITAL ASSETS
Capital assets activity for the fiscal year is as follows:
October 1, September 30,2014 Additions Deductions 2015
Land 48,448,198$ 2,511,443$ 12,527$ 50,947,114$Construction in progress 14,022,083 7,530,975 282,740 21,270,318
Total non depreciable assets 62,470,281 10,042,418 295,267 72,217,432
Capital assets beingdepreciated:Buildings 68,559,572 1,896,199 70,455,771Improvements other thanbuildings 24,756,404 988,615 25,745,019
Infrastructure 127,502,632 8,219,219 135,721,851Machinery and equipment 51,953,405 6,417,277 3,565,159 54,805,523
Total depreciable assets 272,772,013 17,521,310 3,565,159 286,728,164
Capital assets not being depreciated
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Less accumulated depreciation:Buildings 17,153,971 1,691,127 18,845,098Improvements other thanbuildings 8,616,507 2,996,972 11,613,479
Infrastructure 66,578,887 5,741,302 72,320,189Machinery and equipment 45,090,758 2,790,962 3,562,763 44,318,957
Total accumulateddepreciation 137,440,123 13,220,363 3,562,763 147,097,723
Total depreciable capitalassets, net 135,331,890 4,300,947 2,396 139,630,441
Total governmental activitescapital assets, net 197,802,171$ 14,343,365$ 297,663$ 211,847,873$
Depreciation expense was charged to the functions of the government as follows:
Governmental ActivitesGeneral government 1,047,030$Public safety 4,414,043Physical environment 327,322Transportation 6,304,160Economic environment 622,843Human services 30,505Culture and recreation 474,460
Total 13,220,363$
A summary of capital assets for FCSC, a proprietary fund type component unit, at year end is asfollows:
March 1, Transfer/ February 28,2014 Additions Deductions 2015
Land 9,772,616$ $ $ 9,772,616$Construction in progress 1,440,077 5,147,588 3,260,980 3,326,685
Total non depreciable assets 11,212,693 5,147,588 3,260,980 13,099,301
Capital assets beingdepreciated:Buildings 10,474,411 175,799 10,650,210Utility system 231,681,632 4,225,832 3,085,181 238,992,645Automobiles and trucks 4,026,245 867,905 (591,554) 4,302,596Furniture and fixtures 692,894 43,490 (15,887) 720,497Machinery and equipment 11,104,348 1,107,917 12,212,265
Total depreciable assets 257,979,530 6,245,144 2,653,539 266,878,213
Capital assets not being depreciated
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Less accumulated depreciation:Buildings 2,429,375 361,954 2,791,329Utility system 105,402,786 10,968,868 116,371,654Automobiles and trucks 2,821,352 449,193 570,549 2,699,996Furniture and fixtures 605,408 32,760 13,035 625,133Machinery and equipment 8,841,835 520,958 9,362,793
Total accumulateddepreciation 120,100,756 12,333,733 583,584 131,850,905
Total depreciable capitalassets, net 137,878,774 (6,088,589) 2,069,955 135,027,308
Total governmental activitescapital assets, net 149,091,467$ (941,001)$ 5,330,935$ 148,126,609$
NOTE 8 – LONG TERM DEBT
The following is a summary of changes in long term debt for the year ended September 30, 2015:
10/01/14 Additions Reductions 09/30/15 One Year
Capital leases 1,170,320$ 18,624$ 415,725$ 773,219$ 238,753$Notes payable 36,609,442 27,000,000 38,108,501 25,500,941 1,578,500Compensatedabsences 3,247,241 2,850,118 2,496,347 3,601,012 875,401
Landfill closure costs 3,725,781 1,046,999 92,480 4,680,300 93,174
44,752,784$ 30,915,741$ 41,113,053$ 34,555,472$ 2,785,828$
Governmental activities, claims, obligations and compensated absences are generally liquidated bythe general fund. Long term debt payable is composed of the following issues:
Notes Payable
September 30, 2015
Note Payable SunTrust Bank Original loan of $8,000,000 for beachrenourishment project. Due in quarterly principal installments of$210,526 plus interest of 3.94%, matures in 2016. Note is secured bypledged tourist development tax revenues. 210,526$
Note Payable SunTrust Bank Original loan of $27,000,000 for capitalprojects. Due in quarterly principal and interest installments of $553,331with an interest rate of 3.25%. Notematures in 2030 and is secured byhalf cent sales tax revenues. 25,290,415
Total notes payable 25,500,941$
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Principal maturities of all the primary government’s notes payable and related interest paymentsfor the next five years are as follows:
Year EndingSeptember 30, Principal interest Total
2016 1,578,500$ 848,222$ 2,426,722$2017 1,415,927 798,196 2,214,1232018 1,463,163 750,960 2,214,1232019 1,511,976 702,146 2,214,1222020 1,560,634 653,489 2,214,123
2021 2025 8,628,062 2,355,194 10,983,2562026 2030 9,342,679 903,377 10,246,056
25,500,941$ 7,011,584$ 32,512,525$
Discretely Presented Component Unit – Florida Community Services Corporation (FCSC)
The following is a summary of changes in FCSC long term debt for the year:
Beginning Ending Due WithinBalance Additions Reductions Balance One Year
Revenue Bonds,Series 2006 14,095,000$ $ $ 14,095,000$ $Series 2011 7,855,000 540,000 7,315,000 545,000Series 2012 4,187,000 766,000 3,421,000 787,000Series 2013 6,800,000 240,000 6,560,000 315,000
Revene bonds andnotes payable 32,937,000 1,546,000 31,391,000 1,647,000Plus unamortizedbond premium 271,297 15,852 255,445
Total revenue bondsand notes payable 33,208,297$ $ 1,561,852$ 31,646,445$ 1,647,000$
FCSC’s bonds and notes payable were comprised of the following at February 28, 2015:
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February 28, 2015 Current Long term Total
$ 14,095,000$ 14,095,000$
545,000 6,770,000 7,315,000
787,000 2,634,000 3,421,000
315,000 6,245,000 6,560,000
Total revenue bonds and notes outstanding 1,647,000 29,744,000 31,391,000Unamortized premium 255,445 255,445
Total revenue bonds and notes, net 1,647,000$ 29,999,445$ 31,646,445$
$14,09,000 Revenue Refunding Bonds, Series 2006, forpurpose of acquiring and constructing improvementsto the combined water system. Principal and interestpayments are due semi annually with principal due inincreasing amounts and interest rates from 4.0% to5.0%. The semi annual payments are interest onlythrough 2018, with principal payments beginning in2020. The bonds are secured by the assets of theCorporation and by future revenues.
$6,685,000 Revenue Bonds, Series 2011, serial bondsfor the purpose of refunding the outstanding Waterand Sewer Revenue Refunding Bonds, Series 2001,principal and interest payments are due semi annuallywith principal due in increasing amounts and interestrates from 2.0% to 4.75%. The bonds are secured bythe assets of the Corporation and by future revenues.
$4,868,000Water and Sewer Revenue Refunding Note,Series 2012 (Series 2012 Note) for the purpose ofrefunding the outstanding Water and Sewer RevenueRefunding Bonds, Series 2002, principal and interestpayments are due semi annually with principal due inincreasing amounts and an interest rate of 1.97%. Thenote is secured by the assets of the Corporation and byfuture revenues.
$6,800,000 Water and Sewer Revenue Note, Series2013, for the purpose of refunding the outstandingWater and Sewer Revenue Refunding Bonds, Series2003, principal and interest payments are due semiannually with principal due in increasing amounts andan interest rate of 2.47%. The note is secured by theassets of the Corporation and by future revenues.
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FCSC’s annual requirements to amortize all debts outstanding as of February 28, 2015 on the bondsand notes are as follows:
Year EndingFebruary 28, 2015 Principal Interest Total
2016 1,647,000$ 1,146,229$ 2,793,229$2017 1,673,000 1,111,875 2,784,8752018 1,717,000 1,074,051 2,791,0512019 1,754,000 1,030,530 2,784,5302020 1,490,000 998,334 2,488,334
2021 2025 8,325,000 4,125,874 12,450,8742026 2030 10,110,000 2,342,287 12,452,2872031 2032 4,675,000 302,167 4,977,167
31,391,000$ 12,131,347$ 43,522,347$
Bond Covenants
FCSC’s outstanding bond and note issues require FCSC to provide in each fiscal year net revenuesand water and sewer impact fees that are adequate to pay at least 115% of the annual debt service.Additionally, annual net revenues must be adequate to pay 105% of FCSC’s annual debt service plusany amounts required to be deposited in reserve and certain other accounts. As of February 28,2015, FCSC was in compliance with all of its debt covenants.
Indenture Provisions
FCSC’s outstanding bond and note issues require the establishment of certain debt service reserveaccounts to be maintained. At February 28, 2015, FCSC was in compliance with the debt servicereserve requirements of the outstanding bond and note issues. FCSC’s outstanding bond and noteissues require the establishment of a renewal and replacement fund which must maintain a balanceequal to 5% of the gross revenues received by the issuer in the immediately preceding fiscal year.FCSC met this requirement for fiscal year 2015. Within the same bank account, FCSC’s maintainsadditional funds which are designated by FCSC’s Board for use in replacement and repairs due tonatural disasters, such as hurricanes.
NOTE 9 – REVENUES PLEDGED
Sales Tax Revenues Pledged
The County has pledged a portion of its future half cent sales tax revenue to repay $25,290,415 ofsales surtax revenue notes series 2014 issued in fiscal year 2015 to finance the planning,development, acquisition, construction, equipping and maintenance of certain improvements andpublic facilities in the County. The notes are payable solely from the half cent sales tax approved bythe Board and effective January 1, 2013. The half cent sales tax is projected to produce 100 percent
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of the debt service requirements over the life of the notes. For the current year, principal andinterest paid and half cent sales tax revenues were $2,344,289 and $9,502,598, respectively.
NOTE 10 – DEFERRED OUTFLOWS OF RESOURCES
FCSC defers losses resulting from the refunding of debt issues and amortizes the losses over thelesser of the remaining life of the refunded debt or the life of the new debt. Unamortized deferredlosses on debt refundings are presented as deferred outflows of resources within the Statement ofNet Position and are summarized as follows as of February 28, 2015:
Unamortized loss on Series 2001 refunding $ 199,491Unamortized loss on Series 2002 refunding 32,194Unamortized loss on Series 2003 refunding 70,828
Total deferred losses on debt refundings $ 302,513
NOTE 11 – RECOGNITION OF LANDFILL CLOSURE AND POST CLOSURE COSTS
State and federal laws require final cover and closure as well as post closure care of landfills.Closure cost estimates include final cover, anticipated costs of equipment and facilities constructednear or after closure and thirty years of monitoring and maintenance costs subsequent to closing.Closure costs estimates are subject to regulatory review. The County has two landfill sites for whichclosure and post closure cost estimates are required. A 20 acre site located on J.D. Miller Road wasoperated until 1980. $595,002 of future post closure care costs were estimated for this site in 2001adjusted for inflation and has been reported as a liability. Engineers feel this is still a reasonableestimate of future costs associated with this site. Presently, the County is utilizing a 120 acre sitelocated on Highway 83 North. This site contains approximately 40 acres of filled Class I cells thathave been closed, approximately 16 acres of Class III cells that are approximately 78% filled and 5.5acres of Class I cells constructed and available that have not been utilized. Since construction of thenew Class I cell, the County has elected to ship all Class I materials to a facility outside the County.The current closure cost estimate of $5,212,276 represents closure costs of $1,646,387 for 16 acresand post closure cost of $3,565,889 for 58 acres. A portion of the cost is reported each period asoperating expense based on landfill capacity used as of each balance sheet date. To date, 78% ofthe remaining 16 acre landfill capacity has been used. The estimated closure/post closure cost of$4,085,298 for this used capacity is reflected as a liability at September 30, 2015. Current yearclosure/post closure costs of $92,480 have been included in current year operating expenses.Closure and post closure costs of $1,126,978 remain to be recognized in the estimated sixteenyears of remaining useful life.
The landfill is required, by state and federal law and regulations, to make annual contributions to acash escrow account to meet financial assurance requirements. The County is in compliance withthese requirements at September 30, 2015 with cash and investments of $1,154,692 held for thesepurposes. In the event closure escrows and interest earnings prove inadequate due to inflation,changes in technology, or additional closure/post closure care requirements, these costs may needto be covered by charges to future landfill users.
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NOTE 12 – NET POSITION
Net Investment in Capital Assets
All debt proceeds obtained for capital assets were expended and netted against net capital assetsto arrive at net investment in capital assts.
Net Position Restricted by Enabling Legislation
The government wide statement of net position reports $18,988,915 of restricted net position, ofwhich $13,662,016 is restricted by enabling legislation.
NOTE 13 – FUND BALANCE
The County classifies fund balance based upon a hierarchy that imposes constraints on theresources. Fund balance can be classified as follows:
Nonspendable – Amounts that cannot be spent because they are either not spendable in formor they are legally or contractually required to be maintained intact.
Restricted – Amounts that can be spent only for purposes stipulated by external parties,constitutional provision or enabling legislation.
Committed – Amounts constrained for a specific purpose by the Board.
Assigned – Includes spendable fund balance amounts established by the Board of CountyCommissioners (resolution) that are intended to be used for specific purposes and are neitherconsidered restricted or committed.
Unassigned – Unassigned fund balance is the residual classification for the general fund. Thisclassification represents fund balance that is spendable and that has not been restricted,committed, or assigned to specific purposes within the general fund. Unassigned fund balancemay also include negative balances for any governmental fund if expenditures exceed amountsrestricted, committed, or assigned for those specific purposes.
At September 30, 2015, fund balance is comprised of the following:
Nonspendable Fund Balance (not in spendable form)
General fundInventory 167,778$Prepaids 133,503Loan proceeds 513,429Miscellaneous 1,305
Total general fund 816,015$County transportationInventory 470,250Prepaids 819
Total county transportation 471,069
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Tourist developmentPrepaids 21,350Other 200
Total tourist development 21,550
Nonmajor fundsPrepaids 524
Total nonspendable fund balance 1,309,158$
Restricted Fund BalanceGeneral fundJudicial facilities 174,695$Court technology 615,143Court innovations 383,662
Total general fund 1,173,500$County transporationRoad and bridge 8,519,500
Fine and forfeiturePublic safety 1,528,610
Solid waste landfillClosure costs 1,154,692
Debt serviceDebt service 3,531,053
Nonmajor governmental fundsGrants 1,002,360Mosquito control 382,269Court technology 604,430Court operations 74,100Record modernization 90,290Transportation 114,225Infrastructure 81,039Law enforcement 903,733
Total nonmajor governmental funds 3,252,446
Total restricted fund balance 19,159,801$
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Committed Fund BalanceTourist developmentBeach renourishment 16,887,437$New product development 7,519,599Emerging markets 3,571,528
Total tourist development 27,978,564$Solid waste landfillLand purchase 709,686
Nonmajor governmental fundsPreservation 2,093,906Sidewalk 39,475Code enforcement 5,002,539
Total nonmajor governmental funds 7,135,920
Total committed fund balance 35,824,170$
General fundCapital projects 1,871,305$2016 budget appropriations and encumbrances 2,419,153
Total general fund 4,290,458$Tourist development2016 budget appropriations and encumbrances 3,394,160Tourism and economic growth 21,613,184
Total tourist develoment 25,007,344Solid waste landfill2016 budget appropriations and encumbrances 1,984,856Landfill operations and capital projects 4,423,904
Total solid waste landfill 6,408,760Capital projects2016 budget appropriations and encumbrances 7,480,518Capital projects and improvements 1,211,016
Total capital projects 8,691,534Nonmajor governmental fundsCapital projects and improvements 2,420,846Public safety 688,068Culture and recreation 627,937
Total nonmajor governmental funds 3,736,851
Total assigned fund balance 48,134,947$
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NOTE 14 EMPLOYEE RETIREMENT SYSTEM
Florida Retirement System Pension Plan
Substantially all full time County employees are participants in the Florida Retirement System (the“System”), a defined benefit, cost sharing, multiple employer public retirement system, which iscontrolled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida.
The System's funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll, are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentages of payroll employercontribution rates established by state law are determined using the entry age actuarial fundingmethod.
The System provides for those employees hired prior to July 1, 2011 for vesting of benefits after sixyears of creditable service. Normal retirement benefits are available to employees who retire at orafter age 62 with six or more years of service. Early retirement is available after six years of servicewith a 5% reduction of benefits for each year prior to the normal retirement age. For thoseemployees hired on or after July 1, 2011, the System provides for vesting of benefits after eightyears of creditable service. Normal retirement benefits are available to employees who retire at orafter age 65 with eight or more years of service. Early retirement is available after eight years ofservice with a 5% reduction of benefits for each year prior to the normal retirement age.Retirement benefits are based upon age, average compensation, and years of service credit whereaverage compensation is computed as the average of an individual’s five highest years of earnings.
Participating employer contributions are based upon state wide rates established by the State ofFlorida. These rates are applied to employee salaries as follows: regular employees 7.26% DROPProgram 12.88%, special risk employees 22.04%, senior management 21.43% and elected officials42.27%. The rate applied to employee salaries for employee contributions was 3.00% for allclassifications with the exception of DROP program participants who do not make contributions.
The County’s contributions to the plan for the years ended September 30, 2015, 2014, and 2013were $5,371,053, $4,679,235, and $3,502,908 respectively, and equal to the actuarially determinedcontributions for each year. These contributions were paid by their due date. Total payroll for theCounty employees covered by the System was $39,792,650 the year ended September 30, 2015.The County’s total payroll was $40,313,241 for the same period.
The County has no responsibility to the System other than to make the periodic payments requiredby State Statutes. The Florida Division of Retirement issues a publicly available financial report thatincludes financial statements and required supplementary information for the System. The reportmay be obtained by writing Florida Division of Retirement, P O Box 9000, Tallahassee, FL 323159000.
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Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows ofresources related to pensions. At September 30, 2015, the Board reported a liability of $22,916,098for its proportionate share of the collective net pension liability for the Florida Retirement SystemPension Plan (“Pension Plan”). The net pension liability was measured as of June 30, 2015 and thetotal pension liability used to calculate the net pension liability was determined by an actuarialvaluation as of June 30, 2015. The Board’s proportion of the collective net pension liability wasbased on the employers’ shares of contributions to the Pension Plan relative to the total employercontributions of all participating employers. At June 30, 2015, the System’s proportion of thePension Plan was 0.175944%, which was an increase of 0.045573% from its proportion measured asof June 30, 2014.
For the year ended September 30, 2015, the Board recognized pension expense of $1,655,263 forthe Pension Plan. At September 30, 2015, the Board reported deferred outflows of resources anddeferred inflows of resources related to the Pension Plan from the following sources:
Deferred DeferredOutflows of Inflows ofResources Resources
Differences between expected and actual experience $ 2,419,261 $ 543,499Changes of assumptions 1,521,019Net difference between projected and actualearnings on pension plan investments 8,182,668 13,543,665
Changes in proportion and differences betweenemployer contributions and proportionateshare of contributions 2,938,051 2,638,974
Employer contributions subsequent to themeasurement date 1,016,685
Total $ 16,077,684 $ 16,726,138
$1,016,685 reported as deferred outflows of resources related to the Pension Plan resulting fromBoard contributions subsequent to the measurement date will be recognized as a reduction of thenet pension liability in the year ended September 30, 2016. Amounts reported as deferred outflowsof resources and deferred inflows of resources related to the Pension Plan will be recognized inpension expense as follows:
Deferred Deferred PensionYear Ended Outflows of Inflows of Expense,September 30, Resources Resources Net
2016 $ 3,343,107 $ 3,986,383 $ (643,276)2017 3,343,107 3,986,383 (643,276)2018 3,343,107 3,986,383 (643,276)
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2019 3,343,107 3,986,384 (643,277)2020 1,325,187 600,467 724,720
Thereafter 363,384 180,138 72,262
Total $ 15,060,999 $ 16,726,138 $ (1,776,123)
Actuarial assumptions. The total pension liability for the Pension Plan was determined by anactuarial valuation as of June 30, 2015 using the following actuarial assumptions, applied to allperiods included in the measurement:
Inflation 2.60%Investment rate of return* 7.65%Projected salary increases 3.25%
* Net of pension plan investment expense
The actuarial assumptions used in the actuarial valuation as of June 30, 2015 for the Pension Planwere based on the results of an investigation of the economic and demographic experience for theFlorida Retirement System (“FRS”) based upon participant data as of June 30, 2013.
Mortality rates were based on the Generational RP 2000 Mortality Table with Projected Scale BB.
The long term expected rate of return for the Pension Plan investments was not based on historicalreturns, but instead is based on a forward looking capital market economic model. The allocationpolicy’s description of each asset class was used to map the target allocation to the asset classesshown 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 ofarithmetic and geometric real rates of return for each major asset class are summarized in thefollowing table:
CompoundAnnual Annual
Target Arithmetic (Geometric) StandardAsset Class Allocation (1) Return* Return Deviation
Cash 1% 3.2% 3.1% 1.7%Fixed income 18% 4.8% 4.7% 4.7%Global equity 53% 8.5% 7.2% 17.7%Real estate (property) 10% 6.8% 6.2% 12.0%Private equity 6% 11.9% 8.2% 30.0%Strategic investments 12% 6.7% 6.1% 11.4%
Total 100%
Note: (1) As outlined in the Pension Plan’s investment policy* Includes assumed rate of inflation of 2.60%
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Discount rate. The discount rate used to measure the total pension liability for the Pension Planwas 7.65%. The Plan’s fiduciary net position was projected to be available to make all futurebenefit payments of current active and inactive employees. Therefore, the discount rate forcalculating the total pension liability is equal to the long term expected rate of return.
Sensitivity of the Board’s proportionate share of the net pension liability to changes in the discountrate. The following table presents the Board’s proportionate share of the net pension liabilitycalculated using the discount rate of 7.65% for the Pension Plan, as well as what the Board’sproportionate share of the net pension liability would be if it were calculated using a discount ratethat is 1 percentage point lower (6.65%) or 1 percentage point higher (8.65%) than the currentrate:
1% Current 1%Decrease Discount Rate Increase(6.65%) (7.65%) (8.65%)
Board’s proportionate share ofcollective net pension liability $ 59,380,793 $ 22,916,098 $ (7,428,518)
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary netposition is available in the separately issued FRS Comprehensive Annual Financial Report for thefiscal year ended June 30, 2015. The supporting actuarial information is included in the GASBStatement No. 68 Report for the FRS prepared as of June 30, 2015. The auditor’s report dated April8, 2016 on the total pension liability, total deferred outflows of resources, total deferred inflows ofresources, total pension expense for the sum of all participating entities as of June 30, 2015 alongwith supporting schedules is also available. The additional financial and actuarial information isavailable from http://www.dms.myflorida.com/workforce_operations/retirement/publications.
Health Insurance Subsidy Program
Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy Program (“HIS”), acost sharing multiple employer defined benefit pension plan to assist retired members of any Stateadministered retirement system in paying the costs of health insurance. Contributions to the HISplan are included in contributions to the Pension Plan noted above. The Pension Plan contributes1.66% of each covered employee’s salary to the HIS Plan. The remainder is contributed to thePension Plan, with the exception for 0.04% that is contributed to administrative expenses.
Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows ofresources related to pensions. At September 30, 2015, the Board reported a liability of $13,043,922for its proportionate share of the collective net pension liability. For the Health Insurance Subsidyprogram (“HIS Plan”), the net pension liability was measured as of June 30, 2015 and the totalpension liability used to calculate the net pension liability was determined by an actuarial valuationas of June 30, 2014. The Board’s proportion of the collective net pension liability was based on theemployers’ shares of contributions to the HIS Plan relative to the total employer contributions of allparticipating employers. At June 30, 2015, the Board’s proportion of the HIS Plan was 0.127901%,which was an increase of 0.041806% from its proportion measured as of June 30, 2014.
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For the year ended September 30, 2015, the Board recognized pension expense of $1,069,577 forthe HIS Plan. At September 30, 2015, the Board reported deferred outflows of resources anddeferred inflows of resources related to the HIS Plan from the following sources:
Deferred DeferredOutflows of Inflows ofResources Resources
Differences between expected and actual experience $ $Changes of assumptions 1,026,216Net difference between projected and actualearnings on pension plan investments 7,061
Changes in proportion and differences betweenemployer contributions and proportionateshare of contributions 971,162 398,313
Employer contributions subsequent to themeasurement date 164,885
Total $ 2,169,324 $ 398,313
$164,885 reported as deferred outflows of resources related to pensions resulting from Boardcontributions subsequent to the measurement date will be recognized as a reduction of the netpension liability in the year ended September 30, 2016. Amounts reported as deferred outflows ofresources and deferred inflows of resources related to the HIS Plan will be recognized in thepension’s expense as follows:
Deferred Deferred PensionYear Ended Outflows of Inflows of ExpenseSeptember 30, Resources Resources Net
2016 $ 323,921 $ 64,244 $ 259,6772017 323,921 64,244 259,6772018 323,921 64,244 259,6772019 323,922 64,244 259,6782020 322,156 64,244 257,912
Thereafter 386,598 77,093 309,495
Total $ 2,004,439 $ 398,313 $ 1,606,116
The total pension liability for the HIS Plan was determined by an actuarial valuation as of June 30,2014 using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.60%Investment rate of return* 3.80%Projected salary increases 3.25%
* Net of pension plan investment expense
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The actuarial assumptions used in the actuarial valuation as of June 30, 2014 for the HIS Plan werebased on the results of an investigation of the economic and demographic experience for theFlorida Retirement System (“FRS”) based upon participant data as of June 30, 2013.
Mortality rates were based on the Generational RP 2000 Mortality Table with Projected Scale BB.
The long term expected rate of return for the HIS Plan investments was based on the Bond BuyerGeneral Obligation 20 Bond Municipal Bond Index.
Discount rate. The discount rate used to measure the total pension liability for the HIS Plan was3.80%. In general, the discount rate for calculating the total pension liability is equal to the singlerate equivalent to discounting at the long term expected rate of return for benefit payments priorto the projected depletion date. Because the HIS benefit is essentially funded on a pay as you gobasis, the depletion rate is considered to be immediate, and the single equivalent discount rate isequal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer GeneralObligation 20 Bond Municipal Bond Index was adopted as the applicable municipal bond index.
Sensitivity of the Board’s proportionate share of the net pension liability to changes in the discountrate. The following table presents the Board’s proportionate share of the net pension liabilitycalculated using the discount rate of 3.80% for the HIS Plan as well as what the Board’sproportionate share of the net pension liability would be if it were calculated using a discount ratethat is 1 percentage point lower (2.80%) or 1 percentage point higher (4.80%) than the currentrate:
1% Current 1%Decrease Discount Rate Increase(2.80%) (3.80%) (4.80%)
Board’s proportionate share ofcollective net pension liability $ 14,862,942 $ 13,043,922 $ 11,527,132
Pension plan fiduciary net position. Detailed information about the pension plan’s fiduciary netposition is available in the separately issued FRS Comprehensive Annual Financial Report for thefiscal year ended June 30, 2015. The supporting actuarial information is included in the GASBStatement No. 68 Report for the FRS prepared as of June 30, 2015. The auditor’s report dated April8, 2016 on the total pension liability, total deferred outflows of resources, total deferred inflows ofresources, total pension expense for the sum of all participating entities as of June 30, 2015 alongwith supporting schedules is also available. The additional financial and actuarial information isavailable from http://www.dms.myflorida.com/workforce_operations/retirement/publications.
Plan Description The Board provides optional post employment healthcare insurance coverage toeligible individuals under a self insured health insurance program. Four plans are offered: (i) a BlueCross PPO plan with a $500 deductible (Plan 0727), or (ii) a Blue Cross PPO plan with a $1,000deductible (Plan 3359), a Blue Cross PPO plan with a $1,500 deductible (Plan 5360), and a BlueCross PPO plan with a $2,000 deductible (Plan 5901). Once the retiree becomes eligible forMedicare coverage, the monthly premium is reduced. The Plan does not issue a publicly availablefinancial report.
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NOTE 15 – POST EMPLOYMENT BENEFITS OTHER THAN PENSION
Plan Description The Board administers a single employer defined benefit healthcare plan (the“Plan”). In accordance with Section 112.0801 of the Florida Statutes, because Walton Countyprovides a medical plan to active employees of the County and their eligible dependents, theCounty is also required to provide retirees with the opportunity to participate in this Plan. The Planprovides healthcare benefits including medical coverage, prescription drug benefits, and lifeinsurance coverage to both active and eligible retired employees. The Plan is administered throughan agreement with Blue Cross Blue Shield of Florida (BCBSFL). The Plan does not issue a publiclyavailable financial report.
Eligibility for participation in the Plan is limited to full time employees of the County and of theConstitutional Officers. Employees who are active participants in the Plan at the time of retirementreceive an immediate retirement benefit from Florida Retirement System (the “FRS”) and have atleast 6 years of creditable service with the County. Members can retire earlier with a reduced FRSbenefit, and would be eligible for retiree healthcare benefit provided they have at least 6 years ofservice with the County. Special risk members retiring with an unreduced FRS benefit at age 55with 6 or more years of service, or any age with 25 years of service and non special risk membersretiring with unreduced FRS benefits at age 62 with 6 or more years of service, or any age with 30years of service are also eligible.
Benefits Provided The County provides post employment healthcare and life insurance to itsretirees. Health benefits are provided through the County’s healthcare provider, BCBSFL. Thebenefit levels are the same as those afforded to active employees. Health benefits include inpatientand outpatient medical services and prescriptions. Upon a retiree reaching age 65 years of age,Medicare becomes the primary insurer and the County’s plan becomes secondary.
Membership At September 30, 2015, there were no terminated employees entitled to benefits butnot yet receiving them. The membership of the Plan consisted of:
Active employees 802Inactive (retirees electing life insurance and/or medical insurance) 212Inactive (spouses) 10
Total membership 1,024
Participating employers 1
Funding Policy – A qualifying trust or agency fund has not been authorized by the County. TheCounty negotiates the premium rates with BCBSFL. The required contribution is based on pay asyou go financing requirements. Retirees and beneficiaries currently receiving benefits are requiredto contribute 100% of their current premium costs which for fiscal year 2015 was $461,000. TheCounty contributes the remainder to cover the costs of providing the benefits to the retirees.
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Annual OPEB and Net OPEB Obligation – The County’s annual other post employment benefit(OPEB) cost (expense) is calculated based on the annual required contribution of the employer (the“ARC”) actuarially determined in accordance with the parameters of GASB Statement No. 45. TheARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costeach year and amortize any unfunded actuarial liabilities (or funding excess) over a closed periodnot to exceed 30 years. The following shows the components of the County’s net OPEB obligation:
September 30, 2015
Annual required contribution $ 1,766,000Interest on prior year net OPEB obligation 331,000Adjustments to annual required contribution (345,000)
Annual OPEB costs 1,752,000Actual employer contribution (337,000)
Increase in net OPEB obligation 1,415,000Net OPEB obligation, beginning of year 8,284,000
Estimated net OPEB obligation, end of year $ 9,699,000
The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and thenet OPEB obligation for 2015 and the prior three (3) years were as follows:
FiscalYearEnded
ActuarialValuation
DateAnnual
OPEB Costs
Percentage ofOPEB CostContributed
ActualContribution
Net OPEBObligation
9/30/12 9/30/11 $1,679,000 23.0% $391,000 $6,058,0009/30/13 9/30/11 $1,334,000 19.0% $253,000 $7,139,0009/30/14 10/1/12 $1,397,000 18.0% $252,000 $8,284,0009/30/15 10/1/14 $1,752,000 19.0% $337,000 $9,699,000
Funded Status and Funding Progress – As of September 30, 2015, the actuarial accrued liability of$17,545,000 was unfunded. Actuarial valuations of an ongoing plan involve estimates of the valueof reported amounts and assumptions about the probability of occurrence of events far into thefuture. Examples include assumptions about future employment, mortality, and the healthcare costtrend. Amounts determined regarding the funded status of the Plan and the ARCs of the employerare subject to continual revision as actual results are compared with past expectations and newestimates are made about the future. The schedule of funding progress, presented as requiredsupplementary information following the notes to the financial statements in the government widefinancial statements of Walton County, Florida, presents multi year trend information that showswhether the actuarial value of plan assets is increasing or decreasing over time relative to theactuarial accrued liabilities for benefits.
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Actuarial Methods and Assumptions – The valuation dated February 12, 2016 for the fiscal yearend date of September 30, 2015 was prepared using generally accepted accrual principles andpractices, and relied on unaudited census data and medical claims data reported by the County.Projections of benefits for financial reporting purposes are based on the substantive plan (the Planas understood by the employer and the Plan members) and include the types of benefits providedat the time of each valuation and the historical pattern of sharing of benefit costs between theemployer and plan members to that point. The actuarial methods and assumptions used includedtechniques that are designed to reduce the effects of short term volatility in actuarial accruedliabilities and the actuarial value of assets, consistent with the long term perspective of thecalculations.
In the September 30, 2015 actuarial valuation, the entry age normal actuarial cost method was usedto determine the Plan’s funding liabilities and assets. The actuarial assumption included a 4.0%investment rate of return, a 2.5% inflation assumption, general wage increases of 2.5% and amedical trend rate for 2014 2015 of 8.00%, graded down 0.5% per year to 5.0%. The UnfundedActuarial Accrued Liability (UAAL) is being amortized over 30 years open funded, assuming 30annual level payments.
NOTE 16 COMMITMENTS AND CONTINGENCIES
Grants Grant monies received and disbursed by the County are for specific purposes and aresubject to review by the grantor agencies. Such reviews may result in requests for reimbursementdue to disallowed expenditures. The County is not aware of any potential disallowed grantexpenditures.
Construction Commitments – The County has open contract commitments for its governmentalactivities as follows:
Contract Expended RemainingProject Amount to Date Commitment
Various road paving projects 3,958,836$ 3,627,628$ 331,208$Mossy Head Commerce Park waste watertreatment facility 2,731,177 1,805,794 925,383
Mossy Head Commerce Park utilities 449,440 237,574 211,866
Total contract commitments 7,139,453$ 5,670,996$ 1,468,457$
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Florida Communities Services Corporation, at February 28, 2015 had the following commitments:
Employment Agreements
FCSC has entered into an employment agreement with the former Chief Executive Officerand current Chairman of the Board of Directors. The original term of the agreement is ten years,and unless notice is given, the agreement automatically renews annually for an additional tenyear period on the same terms. For the term of the agreement, he will receive a minimumannual salary, various insurance benefits, a death benefit, and the use of a vehicle as well asmaintenance and insurance on that vehicle.
In the event of a change in control of FCSC, which means a change in ownership or a change ofmore than 40% of the Board of Directors, either party, within three months after the change, hasthe right to terminate the agreement. In the event of termination under this provision, theemployee will have no further job duties with FCSC, but the FCSC will continue to pay theemployee compensation for the ten years following such termination at a stated rate of pay. In lieuof such continued compensation and provision of benefits, the employee, at his sole discretion,may elect to receive a lump sum buy out in an amount equal to the total of all sums to be paid perthe Agreement discounted by 10%.
In the event of voluntary termination by the employee (retirement), the employee will be retainedas an independent contractor, and will be paid a base salary consisting of 60% of the employee'scompensation at the time of retirement and benefits for 10 years after retirement. Accordingly, theCorporation has recorded a liability for its estimated obligation under the terms of the agreement inthe amount of $535,728 at February 28, 2015. The obligation under employment agreementrepresents the discounted present value of the expected future payments to the former ChiefExecutive Officer and current Chairman of the Board of Directors for base compensation andbenefits under the terms of the agreement, assuming a discount rate of 0.23% at February 28,2015. The discount rate used in the present value calculation was determined using the estimatedyield on the investments that are expected to be used to finance the payment of the obligation asof February 28, 2015.
In addition, for each day of consultation, or part thereof the employee will receive 1/240th ofthe total sum of salary and benefits the employee received for the year immediately precedingretirement. Beginning March 1, 2008, the former Chief Executive Officer and current Chairmanof the Board of Directors elected to exercise this option for voluntary termination, and hasbeen retained as an independent contractor going forward.
FCSC has also entered into an employment agreement with the General Manager/President. Theoriginal term of the agreement is ten years, and unless notice is given, the agreement automaticallyrenews annually for an additional ten year period on the same terms. For the term of theagreement, she will receive a minimum annual salary, various insurance benefits, a death benefit,and the use of a vehicle as well as maintenance and insurance on that vehicle.
In the event of a change in control of FCSC, which means a change in ownership or a change ofmore than 40% of the Board of Directors, either party, within three months after the change, has
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the right to terminate the agreement. In the event of termination under this provision, theemployee will have no further job duties with FCSC, but FCSC will continue to pay the employeecompensation for the ten years following such termination at a stated rate of pay. In lieu of suchcontinued compensation and provision of benefits, the employee, at her sole discretion, mayelect to receive a lump sum buy out in an amount equal to the total of all sums to be paid per theAgreement discounted by 10%. In the event of voluntary termination by the employee(retirement), the employee will be retained as an independent contractor, and will be paid 25%of the employee's compensation at the time of retirement and benefits for ten years afterretirement. Beginning January 2006, the current General Manager/President elected to exercise theoption for voluntary termination, and has been retained as an independent contractor.
Under the terms of the agreement, in her duties as an independent contractor following voluntarytermination, the employee works a minimum of eight hours per week, and performs specifictasks for FCSC in return for the base pay and benefits specified. Accordingly, no liability for theemployment agreement has been recorded for this employment agreement. In addition, foreach day of consultation, or part thereof the employee receives 1/240th of the total sum of salaryand benefits the employee received for the year immediately preceding retirement.
As of July 2010, the voluntary termination and related independent contractor duties underthe terms of the original employment agreement are considered to be on hold.
Purchase of Water
FCSC holds an agreement with the City of Freeport, Florida regarding the purchase of water.Pursuant to this agreement, FCSC is obligated to annually purchase a minimum of 1.1 million gallonsof water. The agreement will end May 2018.
NOTE 17 – RISK MANAGEMENT
The County is exposed to various risks of losses related to torts; theft, damage, and destruction ofassets; errors and omissions; injuries to employees; and natural disasters. The County handlesthese risks in several ways including participation in several public entity risk pools. The Countymaintains workers' compensation coverage through Preferred Governmental Insurance Trust,automobile liability and property coverage through the Florida League of Cities, and general liabilitycoverage through the Florida Association of County Trust. The County pays yearly premiums tothese pools which cover all losses incurred subject to policy and contract limitations and coverage.
Except for vehicular property damage, the County carries commercial insurance for all other risks ofloss including accidental death and dismemberment, health and workers' compensation forCommunity Service Workers. Settled claims resulting from these risks have not exceededcommercial insurance coverage for the past three fiscal years.
It is the policy of the County not to purchase commercial insurance for the risks associated withvehicular property damage. The County believes it is more economical to manage this risk
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internally and covers all claim settlements and judgments for vehicular property damage out of itsGeneral Fund resources. The County currently reports all risk management activities for vehicularproperty damage from its General Fund. Claims expenditures and liabilities are reported when it isprobable that a loss has occurred and the amount of that loss is reasonably estimated. These lossesinclude an estimate of amounts incurred but not reported.
At September 30, 2015, there was no outstanding liability claims for vehicular property damage.Changes in the reported liability since September 30, 2006 resulted from the following:
Beginning of Current FiscalFiscal Year Year Claim Year EndLiability Claims Payments Balance
2006 2007 $ 12,194$ 12,194$ $2007 2008 2,461 2,4612008 2009 20,360 20,3602009 2010 15,057 15,0572010 2011 3,759 3,7592011 2012 7,874 7,8742012 2013 7,191 7,1912013 2014 4,878 4,8782014 2015 3,877 3,877
The County maintains a pay as you go method of funding current and future liabilities, and hasreserved none of its fund balance for future potential liability.
NOTE 18 – LITIGATION
The County is involved in several litigations and claims arising in the ordinary course of operations.In the opinion of the legal counsel, the range of potential recoveries or liabilities in excess ofinsurance coverage, if any, is not reasonably determinable. In one matter, the Courts ruled againstthe County awarding $650,000 to the plaintiffs for failure to fully enforce compliance with theSandestin Development of Regional Impact (DRI). In another matter the Courts ruled against theCounty awarding $127,000 to the plaintiff for breach of contract. No accruals for loss contingencyhave been made in the financial statements.
NOTE 19 – PRIOR PERIOD ADJUSTMENT
As discussed in Note 1, the implementation of GASB Statement Nos. 68 and 71 required that theBoard record its beginning proportionate share of net pension liability, as well as related beginningdeferred outflows of resources for fiscal year 2014 contributions. The cumulative effect of applyingthese statements retroactively was a decrease in net position in the amount of $37,086,830.
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NOTE 20 – SUBSEQUENT EVENTS
Subsequent events have been evaluated through the date the financial statements were availablefor issuance, and there are none to disclose.
NOTE 21 – SPECIAL ITEM
During fiscal year 2015, the County received a refund from the State of Florida totaling $7,227,657.This refund was related to savings below the State’s anticipated cost of four laning theChoctawhatchee Bay Bridge.
Walton County, FloridaRequired Supplementary Information
Post Employment Benefits Plan Schedule of Funding ProgressSeptember 30, 2015
85
Unfunded UAAL as aActuarial Actuarial Actuarial Actuarial PercentageValuation Value of Liabilities Liabilities Normal Funded Covered of CoveredDate Assets (AAL) (UAAL) Cost Ratio Payroll Payroll
09/30/11 $ 17,226,000$ 17,226,000$ 988,000$ 0.00% 33,405,862$ 51.75%10/01/12 $ 13,861,000$ 13,861,000$ 752,000$ 0.00% 36,023,676$ 38.48%10/1/2014 $ 17,545,000$ 17,545,000$ 1,016,000$ 0.00% 32,745,000$ 53.59%
Walton County, FloridaRequired Supplementary Information
Schedule of Employer’s Proportionate Share of theNet Pension Liability – Florida Retirement Systems Pension Plan
86
As of June 30, 2015
Employer's proportion of the net pension liability 0.177419%
Employer's proportionate share of the net pension liability 22,916,098$
Employer's covered employee payroll* 39,760,306$
Employer's proportionate share of the net pension liabilityas a percentage of its covered employee payroll 57.64%
Plan fiduciary net position as a percentage of thetotal pension liability 92.00%
*Employer’s covered employee payroll during fiscal year is the total payroll paid to coveredemployees (not just pensionable payroll). For fiscal year 2015, the fiscal year is the twelve monthperiod beginning October 1, 2014.
Walton County, FloridaRequired Supplementary InformationSchedule of Employer Contributions –
Florida Retirement Systems Pension Plan
87
For the year ended September 30, 2015
Contractually required contribution** 4,710,495$Contributions in relation to the actuarially determined contribution 4,710,495
Contribution deficiency (excess) $
Employer's covered employee payroll* 39,760,306$
Contributions as a percentage of covered employee payroll 11.85%
* Employer’s covered employee payroll during fiscal year is the total payroll paid to coveredemployees (not just pensionable payroll). For fiscal year 2015, the fiscal year is the twelve monthperiod beginning October 1, 2014.
** The amount contractually required contribution is equal to the amount that would be recognizedas additions from the employer’s contributions in the pension plan’s schedule of changes infiduciary net position during the period that coincides with the employer’s fiscal year.
Walton County, FloridaRequired Supplementary Information
Schedule of Employer’s Proportionate Share of theNet Pension Liability – Health Insurance Subsidy Program
88
As of June 30, 2015
Employer's proportion of the net pension liability 0.127901%Employer's proportionate share of the net pension liability 13,043,922$Employer's covered employee payroll* 39,760,306$Employer's proportionate share of the net pension liability
as a percentage of its covered employee payroll 32.81%Plan fiduciary net position as a percentage of the
total pension liability 0.50%
* Employer’s covered employee payroll during fiscal year is the total payroll paid to coveredemployees (not just pensionable payroll). For fiscal year 2015, the fiscal year is the twelvemonth period beginning October 1, 2014.
Walton County, FloridaRequired Supplementary InformationSchedule of Employer Contributions –
Health Insurance Subsidy Program
89
For the year ended September 30, 2015
Contractually required contribution** 660,558$Contributions in relation to the actuarially determined contribution 660,558
Contribution deficiency (excess) $
Employer's covered employee payroll* 39,760,306$
Contributions as a percentage of covered employee payroll 1.66%
* Employer’s covered employee payroll during fiscal year is the total payroll paid to coveredemployees (not just pensionable payroll). For fiscal year 2015, the fiscal year is the twelve monthperiod beginning October 1, 2014.
** The amount contractually required contribution is equal to the amount that would be recognizedas additions from the employer’s contributions in the pension plan’s schedule of changes infiduciary net position during the period that coincides with the employer’s fiscal year.
90
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Mosquito Control To account for state grants to help control mosquitoes and insects.
Housing and Urban Development To account for federal grants from the Department of Housingand Urban Development.
SHIP Grant To account for state grant funds provided under the State Housing InitiativesPartnership Program.
North Walton Mosquito Control District To account for activities of this dependent special districtestablished to help control mosquitoes and insects.
Imperial Lakes MSBU – To account for a special assessment charged to Imperial Lakes propertyowners to provide for infrastructure.
Recreation Plat To account for specific assessment charged property developers to providerecreational facilities within their developments.
Inmate Canteen (Sheriff) To account for inmate canteen activities.
Daughette MSBU – To account for a special assessment charged to Daughette property owners toprovide for infrastructure.
Court Technology To account for activity related to the technology needs of the court system.
Record Modernization To account for an additional service charge on each recorded instrument.These funds are used exclusively for improvements to the official records system and to pay forequipment and start up costs necessitated by statewide recording systems.
Local Option Gas Tax To account for the local option gas tax restricted to expenditures pursuantto Florida Statute Section 206.41(1)(b).
Criminal Justice Education To account for a surcharge assessed on fines to be used for crimeprevention.
Special Law Enforcement – To account for special revenue from fines and forfeitures to conductcriminal investigations.
Preservation – To account for fees paid in lieu of land reserved per land development Code 4.06.Fund expenditures are limited to cost incurred for restoration of native vegetation on public lands.
Sidewalk – To account for assessments charged to developers in lieu of construction of sidewalks asrequired by the Walton County Land Development Code.
Building Department – To account for fees and assessments levied on building activities to helpensure compliance with state statutes.
E 911 – To account for phone charges assessed for the purpose of providing emergency assistance.
91
Court Fines – To account for ten percent portion of all court related fines collected by the Clerk tobe used exclusively for additional clerk court related operational needs and programenhancements.
State Law Enforcement Trust – To account for funds used to investigate or prevent drug relatedcrimes.
Crime Prevention Trust – To account for funds used to educate the public in crime prevention.
Abandoned Property – To account for state and local forfeitures restricted to law enforcement.
Marijuana Eradication – To account for grant revenue restricted to drug eradication.
Federal Forfeiture Sharing – To account for federal forfeitures restricted to law enforcement.
Drug Control – To account for a specific investigation grant from the Florida Department of LawEnforcement.
Law Enforcement Education – To account for appropriations restricted to public education forcrime prevention.
Law Enforcement Automation – To account for funds collected under F.S. 318.21(9).
Domestic Violence Trust – To account for funds used in the prevention of domestic violence.
Crime Prevention – To account for funds used in the prevention of crime.
Aviation – To account for funds restricted to on going maintenance of Sheriff department aircraft.
Traffic and Parking Enforcement To account for fines collected by the Clerk of the CircuitCourt for traffic and parking enforcement.
Title IV D – To account for federal reimbursements for expenditures related to Title IV D childsupport cases.
Clerk’s Fine and Forfeiture – Established pursuant to Chapter 142.01(1) of the Florida Statutes toaccount for court related revenues and expenditures, which are required to be reported separatelyfrom the Clerk’s general fund activities.
MSBU Various To account for a special assessments charged to various property owners toprovide for infrastructure.
CAPITAL PROJECT FUNDS
Mossy Head Industrial Park – This capital project fund is used to account for the activitiesassociated with the improvements and development of the industrial park.
Infrastructure Improvements – This capital project fund is used to account for infrastructureimprovements at the Mossy Head Industrial Park.
Walton County, FloridaCombining Balance Sheet
Nonmajor Governmental FundsSeptember 30, 2015
HousingMosquito and Urban SHIPControl Development Grant
AssetsCash and cash equivalents 11,915$ 267,585$ 221,004$Investments 9,789 181,542Accounts receivable, net 8,390Due from other governments 4,000Due from other fundsPrepaid items 524Restricted assets:Assessments receivable
Total assets 21,704$ 272,109$ 410,936$
LiabilitiesAccounts payable 331$ 3,243$ 87,750$Accrued liabilities 5,854Due to other governments 18Due to individualsDue to other funds 176Unearned revenue 5,849
Total liabilities 6,180 9,291 87,750
Fund BalanceNonspendable 524Restricted 15,524 262,294 323,186CommittedAssigned
Total fund balance 15,524 262,818 323,186
Total liabilities, deferred inflows ofresources and fund balance 21,704$ 272,109$ 410,936$
Special
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N. WaltonMosquito Imperial InmateControl Lakes Recreation Canteen DaughetteDistrict MSBU Plat (Sheriff) MSBU
205,884$ 1,321$ 346,037$ 408,860$ 20$169,121 1,086 284,250 16
19,2921,170 133 97
5,800
26,090
376,175$ 2,540$ 630,287$ 433,952$ 26,223$
867$ $ 2,350$ 42,075$ $8,563
13,0338,0732,945
26,090
9,430 2,350 66,126 26,090
366,745 2,540 133
627,937 367,826
366,745 2,540 627,937 367,826 133
376,175$ 2,540$ 630,287$ 433,952$ 26,223$
Continued
Revenue Funds
Walton County, FloridaCombining Balance Sheet
Nonmajor Governmental Funds ContinuedSeptember 30, 2015
Record LocalCourt Modern Option
Technology ization Gas Tax
AssetsCash and cash equivalents 607,765$ 90,350$ 326$Investments 267Accounts receivable, netDue from other governments 218,632Due from other fundsPrepaid itemsRestricted assets:Assessments receivable
Total assets 607,765$ 90,350$ 219,225$
LiabilitiesAccounts payable $ 60$ $Accrued liabilities 3,335Due to other governmentsDue to individualsDue to other funds 105,000Unearned revenue
Total liabilities 3,335 60 105,000
Fund BalanceNonspendableRestricted 604,430 90,290 114,225CommittedAssigned
Total fund balance 604,430 90,290 114,225
Total liabilities, deferred inflows ofresources and fund balance 607,765$ 90,350$ 219,225$
Special
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Criminal SpecialJustice Law Building
Education Enforcement Preservation Sidewalk Department
43,824$ 6,870$ 1,149,587$ 21,673$ 2,773,788$35,998 5,642 944,319 17,802 2,278,504
1172,242
82,064$ 12,512$ 2,093,906$ 39,475$ 5,052,409$
$ $ $ $ 452$49,418
49,870
82,064 12,5122,093,906 39,475 5,002,539
82,064 12,512 2,093,906 39,475 5,002,539
82,064$ 12,512$ 2,093,906$ 39,475$ 5,052,409$
Continued
Revenue Funds
Walton County, FloridaCombining Balance Sheet
Nonmajor Governmental Funds ContinuedSeptember 30, 2015
State LawCourt Enforcement
E 911 Fines Trust
AssetsCash and cash equivalents 162,112$ 78,965$ 721$Investments 133,167Accounts receivable, netDue from other governments 81,518Due from other funds 13,200Prepaid itemsRestricted assets:Assessments receivable
Total assets 376,797$ 78,965$ 13,921$
LiabilitiesAccounts payable $ $ $Accrued liabilities 4,865Due to other governments 56,555Due to individualsDue to other fundsUnearned revenue
Total liabilities 56,555 4,865
Fund BalanceNonspendableRestricted 74,100 13,921CommittedAssigned 320,242
Total fund balance 320,242 74,100 13,921
Total liabilities, deferred inflows ofresources and fund balance 376,797$ 78,965$ 13,921$
Special
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Crime Federal LawPrevention Abandoned Marijuana Forfeiture Drug Enforcement
Trust Property Eradication Sharing Control Education
88,707$ 41,846$ 5,047$ 67,610$ $ 91,748$72,869
3,39115,154 7,387 128 50,759
164,967$ 57,000$ 5,047$ 74,997$ 128$ 142,507$
$ 4,051$ $ 755$ $ 30$
32,996128 128
128
37,175 128 755 128 30
164,967 19,825 4,919 74,242 142,477
164,967 19,825 4,919 74,242 142,477
164,967$ 57,000$ 5,047$ 74,997$ 128$ 142,507$
Continued
Revenue Funds
Walton County, FloridaCombining Balance Sheet
Nonmajor Governmental Funds ContinuedSeptember 30, 2015
Law DomesticEnforcement Violence CrimeAutomation Trust Prevention
AssetsCash and cash equivalents 48,267$ 48,884$ 53,928$Investments 39,649 40,156Accounts receivable, netDue from other governments 4,308 460Due from other fundsPrepaid itemsRestricted assets:Assessments receivable
Total assets 92,224$ 89,500$ 53,928$
LiabilitiesAccounts payable $ $ 2,779$Accrued liabilitiesDue to other governmentsDue to individualsDue to other fundsUnearned revenue
Total liabilities 2,779
Fund BalanceNonspendableRestricted 92,224 89,500 51,149CommittedAssigned
Total fund balance 92,224 89,500 51,149
Total liabilities, deferred inflows ofresources and fund balance 92,224$ 89,500$ 53,928$
Special Revenue
95
Funds
Traffic and Clerk'sParking Fine & MSBU
Aviation Enforcement Title IV D Forfeiture Various
133,568$ 19,679$ 393,818$ 330,456$ 42,958$35,289
2,68627,371 526 119
873,682
133,568$ 22,365$ 421,189$ 330,982$ 952,048$
$ $ $ 165$ $4,309 179,920
150,897
873,682
4,309 330,982 873,682
133,568 22,365 416,880 78,366
133,568 22,365 416,880 78,366
133,568$ 22,365$ 421,189$ 330,982$ 952,048$
Continued
Walton County, FloridaCombining Balance Sheet
Nonmajor Governmental Funds ContinuedSeptember 30, 2015
96
TotalMossy Head NonmajorIndustrial Infrastructure Governmental
Park Improvements Funds
AssetsCash and cash equivalents (455,088)$ 532,130$ 7,842,165$Investments 437,115 4,686,581Accounts receivable, net 30,485Due from other governments 2,169,854 48 2,513,869Due from other funds 92,428Prepaid items 524Restricted assets:Assessments receivable 899,772
Total assets 1,714,766$ 969,293$ 16,065,824$
LiabilitiesAccounts payable 258,247$ 4,966$ 408,121$Accrued liabilities 256,264Due to other governments 220,503Due to individuals 41,069Due to other funds 108,377Unearned revenue 905,749
Total liabilities 258,247 4,966 1,940,083
Fund BalanceNonspendable 524Restricted 3,252,446Committed 7,135,920Assigned 1,456,519 964,327 3,736,851
Total fund balance 1,456,519 964,327 14,125,741
Total liabilities, deferred inflows ofresources and fund balance 1,714,766$ 969,293$ 16,065,824$
Capital Project Funds
Walton County, FloridaCombining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental FundsFor the Year Ended September 30, 2015
HousingMosquito and Urban SHIPControl Development Grant
RevenuesTaxes $ $ $Licenses and permitsIntergovernmental 25,691 1,923,283Charges for servicesFines and forfeituresInvestment earnings (losses) 67 170 3,604Miscellaneous 941 450 10,000
Total revenue 26,699 1,923,903 13,604
ExpendituresCurrentGeneral governmentPublic safetyPhysical environmentEconomic environment 1,902,313 358,520Human services 25,692Culture/recreation
Total expenditures 25,692 1,902,313 358,520
Excess Revenue Over (Under)Expenditures 1,007 21,590 (344,916)
Other Financing Sources (Uses)Transfers inTransfers out (145,009)
Total other financial sources (uses) (145,009)
Net change in fund balance 1,007 21,590 (489,925)
Fund Balance beginning 14,517 241,228 813,111
Fund Balance ending 15,524$ 262,818$ 323,186$
Special
97
N. WaltonMosquito Imperial InmateControl Lakes Recreation Canteen DaughetteDistrict MSBU Plat (Sheriff) MSBU
483,129$ $ $ $ $
92410,800 29,219 21,696
4,793 36 3,088 1133 167,693 269,826 97
499,646 29,388 170,781 269,826 21,794
226,58534,996 31,882
1,066,095116,283
1,066,095 34,996 116,283 226,585 31,882
(566,449) (5,608) 54,498 43,241 (10,088)
(566,449) (5,608) 54,498 43,241 (10,088)
933,194 8,148 573,439 324,585 10,221
366,745$ 2,540$ 627,937$ 367,826$ 133$
Revenue Funds
Continued
Walton County, FloridaCombining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds ContinuedFor the Year Ended September 30, 2015
LocalCourt Record Option
Technology Modernization Gas Tax
RevenuesTaxes $ $ 2,390,004$Licenses and permitsIntergovernmentalCharges for services 231,882 76,888Fines and forfeituresInvestment earnings (losses) 1,442Miscellaneous
Total revenue 231,882 76,888 2,391,446
ExpendituresCurrentGeneral government 110,742 87,898Public safetyPhysical environmentEconomic environmentHuman servicesCulture/recreation
Total expenditures 110,742 87,898
Excess Revenue Over (Under)Expenditures 121,140 (11,010) 2,391,446
Other Financing Sources (Uses)Transfers inTransfers out (2,500,000)
Total other financial sources (uses) (2,500,000)
Net change in fund balance 121,140 (11,010) (108,554)
Fund Balance beginning 483,290 101,300 222,779
Fund Balance ending 604,430$ 90,290$ 114,225$
Special
98
Criminal SpecialJustice Law Building
Education Enforcement Preservation Sidewalk Department
$ $ $ $ $2,251,990
25,91537,941
303 64 6,643 224 20,265997,230 27,050 60,812
26,218 64 1,003,873 27,274 2,371,008
24,15050,000 1,049,162
50,000 24,150 1,049,162
(23,782) 64 1,003,873 3,124 1,321,846
(23,782) 64 1,003,873 3,124 1,321,846
105,846 12,448 1,090,033 36,351 3,680,693
82,064$ 12,512$ 2,093,906$ 39,475$ 5,002,539$
Revenue Funds
Continued
Walton County, FloridaCombining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds – ContinuedFor the Year Ended September 30, 2014
State LawCourt Enforcement
E 911 Fines Trust
RevenuesTaxes $ $ $Licenses and permitsIntergovernmental 376,266Charges for services 59,401Fines and forfeituresInvestment earnings (losses) 531Miscellaneous 515
Total revenue 376,797 59,401 515
ExpendituresCurrentGeneral government 245,707Public safety 56,555 2,462Physical environmentEconomic environmentHuman servicesCulture/recreation
Total expenditures 56,555 245,707 2,462
Excess Revenue Over (Under)Expenditures 320,242 (186,306) (1,947)
Other Financing Sources (Uses)Transfers inTransfers out
Total other financial sources (uses)
Net change in fund balance 320,242 (186,306) (1,947)
Fund Balance beginning 260,406 15,868
Fund Balance ending 320,242$ 74,100$ 13,921$
Special
99
Crime Federal LawPrevention Abandoned Marijuana Forfeiture Drug Enforcement
Trust Property Eradication Sharing Control Education
$ $ $ $ $ $
43,353 2,011 6,676 321,000
70,262 50,000657
25,268 126 5,847
44,010 25,268 2,011 70,388 6,676 376,847
35,000 78,668 356 82,341 6,676 298,120
35,000 78,668 356 82,341 6,676 298,120
9,010 (53,400) 1,655 (11,953) 78,727
9,010 (53,400) 1,655 (11,953) 78,727
155,957 73,225 3,264 86,195 63,750
164,967$ 19,825$ 4,919$ 74,242$ $ 142,477$
Revenue Funds
Continued
Walton County, FloridaCombining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds ContinuedFor the Year Ended September 30, 2014
Law DomesticEnforcement Violence CrimeAutomation Trust Prevention
RevenuesTaxes $ $ $Licenses and permitsIntergovernmental 3,402 35,000Charges for servicesFines and forfeitures 47,204Investment earnings (losses) 974 447Miscellaneous 33,666
Total revenue 48,178 3,849 68,666
ExpendituresCurrentGeneral governmentPublic safety 321,000 67,680Physical environmentEconomic environmentHuman servicesCulture/recreation
Total expenditures 321,000 67,680
Excess Revenue Over (Under)Expenditures (272,822) 3,849 986
Other Financing Sources (Uses)Transfers inTransfers out
Total other financial sources (uses)
Net change in fund balance (272,822) 3,849 986
Fund Balance beginning 365,046 85,651 50,163
Fund Balance ending 92,224$ 89,500$ 51,149$
Special Revenue
100
Funds
Traffic and Clerk'sParking Fine & MSBU
Aviation Enforcement Title IV D Forfeiture Various
$ $ $ $ $
230 124,520 171,4301,023,203 27,874
8,210 376,957858 518
28 29
230 8,238 124,520 1,572,448 28,421
93,397 1,572,44823,201
29,830
23,201 93,397 1,572,448 29,830
(22,971) 8,238 31,123 (1,409)
(22,971) 8,238 31,123 (1,409)
156,539 14,127 385,757 79,775
133,568$ 22,365$ 416,880$ $ 78,366$
Continued
Walton County, FloridaCombining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds ContinuedFor the Year Ended September 30, 2015
101
TotalMossy Head NonmajorIndustrial Infrastructue Governmental
Park Improvements Funds
RevenuesTaxes $ 968,555$ 3,841,688$Licenses and permits 2,251,990Intergovernmental 6,301,460 9,361,161Charges for services 1,518,904Fines and forfeitures 552,633Investment earnings (losses) 1,357 738 46,780Miscellaneous 545,673 2,145,384
Total revenue 6,848,490 969,293 19,718,540
ExpendituresCurrentGeneral government 6,560,485 4,966 8,699,793Public safety 2,297,806Physical environment 96,708Economic environment 2,260,833Human services 1,091,787Culture/recreation 116,283
Total expenditures 6,560,485 4,966 14,563,210
Excess Revenue Over (Under)Expenditures 288,005 964,327 5,155,330
Other Financing Sources (Uses)Transfers in 678,360 678,360Transfers out (2,645,009)
Total other financial sources (uses) 678,360 (1,966,649)
Net change in fund balance 966,365 964,327 3,188,681
Fund Balance beginning 490,154 10,937,060
Fund Balance ending 1,456,519$ 964,327$ 14,125,741$
Capital Project Funds
Walton County, FloridaMosquito Control Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
102
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental 31,540$ 31,540$ 25,691$ (5,849)$Investment earnings 67 67Miscellaneous 941 941
Total revenues 31,540 31,540 26,699 (4,841)
ExpendituresCurrentHuman servicesMosquito control 31,540 46,057 25,692 20,365
Excess Revenues Over(Under) Expenditures (14,517) 1,007 15,524
Fund Balance beginning 14,517 14,517 14,517
Fund Balance ending 14,517$ $ 15,524$ 15,524$
Walton County, FloridaHousing and Urban Development Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
103
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental 1,833,842$ 1,923,283$ 1,923,283$ $Investment earnings 170 170Miscellaneous 450 450
Total revenues 1,833,842 1,923,283 1,923,903 620
ExpendituresCurrentEconomic environmentHousing Assistance 1,833,842 1,923,284 1,902,313 20,971
Excess Revenues Over(Under) Expenditures (1) 21,590 21,591
Fund Balance beginning 241,228 241,228 241,228
Fund Balance ending 241,228$ 241,227$ 262,818$ 21,591$
Walton County, FloridaSHIP Grant Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
104
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesInvestment earnings $ $ 3,604$ 3,604$Miscellaneous 10,000 10,000
Total revenues 13,604 13,604
ExpendituresCurrentEconomic environmentSHIP Program 447,956 358,520 89,436
Excess Revenues Over(Under) Expenditures (447,956) (344,916) 103,040
Other Financing UsesTransfers out (145,009) (145,009)
Fund Balance beginning 813,111 813,111 813,111
Fund Balance ending 813,111$ 220,146$ 323,186$ 103,040$
Walton County, FloridaNorth Walton Mosquito Control Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
105
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 497,585$ 497,585$ 483,129$ (14,456)$Intergovernmental 924 924Charges for services 10,800 10,800 10,800Investment earnings 12,000 12,000 4,793 (7,207)
Total revenues 520,385 520,385 499,646 (20,739)
ExpendituresCurrentHuman servicesMosquito control district 622,444 1,216,760 1,066,095 150,665
Excess Revenues Over(Under) Expenditures (102,059) (696,375) (566,449) 129,926
Fund Balance beginning 933,194 933,194 933,194
Fund Balance ending 831,135$ 236,819$ 366,745$ 129,926$
Walton County, FloridaImperial Lakes MSBU Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
106
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 38,885$ 38,885$ 29,219$ (9,666)$Investment earnings 36 36Miscellaneous 133 133
Total revenues 38,885 38,885 29,388 (9,497)
ExpendituresCurrentPhysical environmentBuilding department 36,941 36,941 34,996 1,945
Excess Revenues Over(Under) Expenditures 1,944 1,944 (5,608) (7,552)
Fund Balance beginning 8,148 8,148 8,148
Fund Balance ending 10,092$ 10,092$ 2,540$ (7,552)$
Walton County, FloridaRecreation Plat Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
107
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesInvestment earnings $ $ 3,088$ 3,088$Miscellaneous 60,000 60,000 167,693 107,693
Total revenues 60,000 60,000 170,781 110,781
ExpendituresCurrentCultural/recreationParks department 60,000 633,399 116,283 517,116
Excess Revenues Over(Under) Expenditures (573,399) 54,498 627,897
Fund Balance beginning 573,439 573,439 573,439
Fund Balance ending 573,439$ 40$ 627,937$ 627,897$
Walton County, FloridaDaughette MSBU Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
108
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 25,139$ 25,139$ 21,696$ (3,443)$Investment earnings 1 1Miscellaneous 97 97
Total revenues 25,139 25,139 21,794 (3,345)
ExpendituresCurrentPhysical environmentDaughetteMSBU 23,882 34,102 31,882 2,220
Excess Revenues Over(Under) Expenditures 1,257 (8,963) (10,088) (1,125)
Fund Balance beginning 10,221 10,221 10,221
Fund Balance ending 11,478$ 1,258$ 133$ (1,125)$
Walton County, FloridaSidewalk Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
109
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesInvestment earnings (losses) $ $ 224$ 224$Miscellaneous 4,000 4,000 27,050 23,050
Total revenues 4,000 4,000 27,274 23,274
ExpendituresCurrentGeneral governmentSidewalk 4,000 33,205 24,150 9,055
Excess Revenues Over(Under) Expenditures (29,205) 3,124 32,329
Fund Balance beginning 36,351 36,351 36,351
Fund Balance ending 36,351$ 7,146$ 39,475$ 32,329$
Walton County, FloridaCourt Technology Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
110
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 181,246$ 181,246$ 231,882$ 50,636$
ExpendituresCurrentGeneral GovernmentCourt Technology 181,246 181,246 110,742 70,504
Excess Revenues OverExpenditures 121,140 121,140
Fund Balance beginning 483,290 483,290 483,290
Fund Balance ending 483,290$ 483,290$ 604,430$ 121,140$
Walton County, FloridaRecord Modernization Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
111
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 70,000$ 76,888$ 76,888$ $
ExpendituresCurrentGeneral governmentRecord Modernization 70,000 87,901 87,898 3
Excess Revenues UnderExpenditures (11,013) (11,010) 3
Fund Balance beginning 101,300 101,300 101,300
Fund Balance ending 101,300$ 90,287$ 90,290$ 3$
Walton County, FloridaLocal Option Gas Tax Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
112
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 2,500,000$ 2,500,000$ 2,390,004$ (109,996)$Investment earnings 1,442 1,442
Total revenues 2,500,000 2,500,000 2,391,446 (108,554)
Other Financing Sources (Uses)Transfers out (2,500,000) (2,500,000) (2,500,000)
Net change in fund balance (108,554) (108,554)
Fund Balance beginning 222,779 222,779 222,779
Fund Balance ending 222,779$ 222,779$ 114,225$ (108,554)$
Walton County, FloridaCriminal Justice Education Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
113
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental 50,000$ 50,000$ 25,915$ (24,085)$Investment earnings 303 303
Total revenues 50,000 50,000 26,218 (23,782)
ExpendituresCurrentPublic safetySheriff department 50,000 50,000 50,000
Excess Revenues UnderExpenditures (23,782) (23,782)
Fund Balance beginning 105,846 105,846 105,846
Fund Balance ending 105,846$ 105,846$ 82,064$ (23,782)$
Walton County, FloridaBuilding Department Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
114
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesLicenses and permits 1,118,320$ 1,118,320$ 2,251,990$ 1,133,670$Charges for services 30,000 30,000 37,941 7,941Investment earnings 20,265 20,265Miscellaneous 60,812 60,812
Total revenues 1,148,320 1,148,320 2,371,008 1,222,688
ExpendituresCurrentPublic safetyBuilding department 1,148,320 1,148,320 1,049,162 99,158
Excess Revenues OverExpenditures 1,321,846 1,321,846
Fund Balance beginning 3,680,693 3,680,693 3,680,693
Fund Balance ending 3,680,693$ 3,680,693$ 5,002,539$ 1,321,846$
Walton County, FloridaE 911 Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
115
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental $ 431,604$ 376,266$ (55,338)$Investment earnings 531 531
Total revenues 432,135 376,797 (55,338)
ExpendituresCurrentPublic safetyE 911 Services 111,893 56,555 55,338
Excess Revenue OverExpenditures 320,242 320,242
Fund Balance beginning
Fund Balance ending $ 320,242$ 320,242$ $
Walton County, FloridaCourt Fines Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
116
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 76,290$ 76,290$ 59,401$ (16,889)$
ExpendituresCurrentGeneral GovernmentCourt operations 76,290 245,781 245,707 74
Excess Revenues UnderExpenditures (169,491) (186,306) (16,815)
Fund Balance beginning 260,406 260,406 260,406
Fund Balance ending 260,406$ 90,915$ 74,100$ (16,815)$
Walton County, FloridaCrime Prevention Trust Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
117
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental 35,000$ 35,000$ 43,353$ 8,353$Investment earnings 657 657
Total revenues 35,000 35,000 44,010 9,010
ExpendituresCurrentPublic safetySheriff department 35,000 35,000 35,000
Excess Revenue OverExpenditures 9,010 9,010
Fund Balance beginning 38,256 38,256 155,957 117,701
Fund Balance ending 38,256$ 38,256$ 164,967$ 126,711$
Walton County, FloridaTitle IV D Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
118
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental 112,994$ 112,994$ 124,520$ 11,526$
ExpendituresCurrentGeneral GovernmentChild Support 112,994 112,994 93,397 19,597
Excess Revenues OverExpenditures 31,123 31,123
Fund Balance beginning 385,757 385,757 385,757
Fund Balance ending 385,757$ 385,757$ 416,880$ 31,123$
Walton County, FloridaClerk’s Fine & Forfeiture Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
119
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 1,191,263$ 1,021,348$ 1,023,203$ 1,855$Fines and forfeitures 469,993 402,956 376,957 (25,999)Intergovernmental 171,430 171,430Investment earnings (losses) 1,200 1,200 858 (342)
Total revenues 1,662,456 1,596,934 1,572,448 (24,486)
ExpendituresCurrentGeneral GovernmentClerk of Court 1,662,456 1,596,934 1,572,448 24,486
Excess Revenues OverExpenditures
Fund Balance beginning
Fund Balance ending $ $ $ $
Walton County, FloridaMSBU Various Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
120
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesCharges for services 32,471$ 32,471$ 27,874$ (4,597)$Investment earnings 518 518Miscellaneous 29 29
Total revenues 32,471 32,471 28,421 (4,050)
ExpendituresCurrentPhysical environmentMSBUvarious 30,847 30,847 29,830 1,017
Excess Revenues Over(Under) Expenditures 1,624 1,624 (1,409) (3,033)
Fund Balance beginning 79,775 79,775 79,775
Fund Balance ending 81,399$ 81,399$ 78,366$ (3,033)$
Walton County, FloridaMossy Head Industrial Park Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
121
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesIntergovernmental $ 3,000,000$ 6,301,460$ 3,301,460$Investment earnings (losses) 1,357 1,357Miscellaneous 25,000 545,673 520,673
Total revenues 3,025,000 6,848,490 3,823,490
ExpendituresGeneral government 8,454,000 6,560,485 1,893,515
Excess Revenues Over(Under) Expenditures (5,429,000) 288,005 5,717,005
Other Financing SourcesTransfers in 678,360 678,360
Net change in fund balance (4,750,640) 966,365 5,717,005
Fund Balance beginning 490,154 490,154 490,154
Fund Balance ending 490,154$ (4,260,486)$ 1,456,519$ 5,717,005$
Walton County, FloridaInfrastructure Improvements Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund BalanceBudget and Actual
For the Year Ended September 30, 2015
122
VarianceWith FinalBudget
Original Final PositiveBudget Budget Actual (Negative)
RevenuesTaxes 999,136$ 999,136$ 968,555$ (30,581)$
738 738
Total revenues 999,136 999,136 969,293 (29,843)
ExpendituresGeneral government 949,179 949,179 4,966 944,213
Net change in fund balance 49,957 49,957 964,327 914,370
Fund Balance beginning
Fund Balance ending 49,957$ 49,957$ 964,327$ 914,370$
123
FIDUCIARY FUNDS
ALL AGENCY FUNDS
Tax Collector
Licenses – To account for the collection and remittance of miscellaneous licenses and permits.
Tags – To account for the collection and remittance of motor vehicle registration receipts.
Property Tax – To account for the collection and distribution of local property taxes.
Clerk of the Circuit Court
General Agency – To account for the collection and disbursement of trust accounts includingtax accounts, fine and forfeiture accounts, and other miscellaneous sources.
Juror and Witness – To account for the collection and disbursement of advances received bythe Clerk from the State and County for payment of jurors and witnesses.
Registry of the Court – To account for the collection and disbursement of funds required bycourt orders.
Child Support – To account for the collection and disbursement of court ordered child supportand/or alimony.
Appearance Bonds – To account for inmate cash bonds.
Tax Redemption – To account for the collections and disbursements related to the sale of taxdeeds.
Sheriff
Suspense – To account for the collection and remittance of miscellaneous receipts.
Individual Depositors – To account for prepayment of the Sheriff’s fees for serving legaldocuments.
Walton County, FloridaCombining Statement of Fiduciary Net Position
Agency FundsSeptember 30, 2015
Property GeneralLicenses Tags Tax Agency
AssetsCash 3,759$ 204,818$ 631,195$ 1,892,036$Receivables, net 1,200
Total assets 3,759$ 204,818$ 631,195$ 1,893,236$
LiabilitiesDue to other governments 3,759$ 204,818$ 114,985$ 648,871$Deposits 516,210 1,238,297Due to individuals 6,068
Total liabilities 3,759$ 204,818$ 631,195$ 1,893,236$
Tax Collector
124
Juror and Registry of Child Appearance TaxWitness the Court Support Bonds Redemption
19,646$ 884,590$ 77,428$ 190,793$ 680,673$613
19,646$ 884,590$ 78,041$ 190,793$ 680,673$
19,646$ 300$ 78,041$ 4,010$ 1,240$884,290
186,783 679,433
19,646$ 884,590$ 78,041$ 190,793$ 680,673$
Continued
Clerk of the Circuit Court
Walton County, FloridaCombining Statement of Fiduciary Net Position Continued
Agency FundsFor the Year Ended September 30, 2015
125
IndividualSuspense Depositors Total
AssetsCash 5,250$ 13,985$ 4,604,173$Receivables, net 163 1,976
Total assets 5,250$ 14,148$ 4,606,149$
LiabilitiesDue to other governments $ 12,435$ 1,088,105$Deposits 2,638,797Due to individuals 5,250 1,713 879,247
Total liabilities 5,250$ 14,148$ 4,606,149$
Sheriff
Walton County, FloridaCombining Statement of Changes in Assets and Liabilities
Agency FundsFor the Year Ended September 30, 2015
126
Balance Balance10/1/14 Additions Deductions 9/30/15
Tax Collector
LicensesAssetsCash 1,536$ 158,385$ 156,162$ 3,759$
LiabilitiesDue to other governments 1,536$ 158,456$ 156,233$ 3,759$
TagsAssetsCash 183,218$ 8,544,858$ 8,523,258$ 204,818$
LiabilitiesDue to other governments 183,218$ 8,767,279$ 8,745,679$ 204,818$
Property TaxAssetsCash 1,094,563$ 138,351,017$ 138,814,385$ 631,195$
LiabilitiesDue to other governments 394,250$ 138,900,390$ 139,179,655$ 114,985$Deposits 700,313 5,513,059 5,697,162 516,210
Total liabilities 1,094,563$ 144,413,449$ 144,876,817$ 631,195$
Clerk of the Circuit Court
General AgencyAssetsCash 1,726,559$ 32,924,524$ 32,759,047$ 1,892,036$Receivables, net 1,180 2,771 2,751 1,200
Total assets 1,727,739$ 32,927,295$ 32,761,798$ 1,893,236$
LiabilitiesDue to other governments 455,770$ 29,818,153$ 29,625,052$ 648,871$Deposits 1,266,200 2,941,018 2,968,921 1,238,297Due to individuals 5,769 168,124 167,825 6,068
Total liabilities 1,727,739$ 32,927,295$ 32,761,798$ 1,893,236$
Continued
Walton County, FloridaCombining Statement of Changes in Assets and Liabilities
Agency Funds ContinuedFor the Year Ended September 30, 2015
127
Balance Balance10/1/14 Additions Deductions 9/30/15
Juror andWitnessAssetsCash 29,456$ 5,000$ 14,810$ 19,646$
LiabilitiesDue to other governments 29,456$ 5,000$ 14,810$ 19,646$
Registry of the CourtAssetsCash 936,357$ 15,862,123$ 15,913,890$ 884,590$
LiabilitiesDue to other governments 1,441$ 200$ 1,341$ 300$Deposits 934,916 15,861,923 15,912,549 884,290
936,357$ 15,862,123$ 15,913,890$ 884,590$
Child SupportAssetsCash $ 856,682$ 779,254$ 77,428$Receivables, net 2,319 2,502 4,208 613
2,319$ 859,184$ 783,462$ 78,041$
LiabilitiesDue to other governments 2,319$ 859,184$ 783,462$ 78,041$
Appearance BondsAssetsCash 184,746$ 444,733$ 438,686$ 190,793$
LiabilitiesDue to other governments 2,980$ 5,855$ 4,825$ 4,010$Due to individuals 181,766 438,878 433,861 186,783
Total liabilities 184,746$ 444,733$ 438,686$ 190,793$
Tax RedemptionAssetsCash 456,954$ 996,101$ 772,382$ 680,673$
LiabilitiesDue to other governments 600$ 49,555$ 48,915$ 1,240$Due to individuals 456,354 946,546 723,467 679,433
Total liabilities 456,954$ 996,101$ 772,382$ 680,673$
Continued
Walton County, FloridaCombining Statement of Changes in Assets and Liabilities
Agency Funds ContinuedFor the Year Ended September 30, 2015
128
Balance Balance10/1/14 Additions Deductions 9/30/15
Sheriff
SuspenseAssetsCash 29,393$ 3,777$ 27,920$ 5,250$
LiabilitiesDue to individuals 8,968$ 3,777$ 7,495$ 5,250$Deposits 20,425 23,372 43,797
29,393$ 27,149$ 51,292$ 5,250$
Individual DepositorsAssetsCash 52,747$ 137,354$ 176,116$ 13,985$Accounts receivable 233 70 163
52,747$ 137,587$ 176,186$ 14,148$
LiabilitiesDue to other governments 10,166$ 310,598$ 308,329$ 12,435$Due to individuals 42,581 5,000 45,868 1,713
52,747$ 315,598$ 354,197$ 14,148$
Total All Agency Funds
AssetsCash 4,695,529$ 198,284,554$ 198,375,910$ 4,604,173$Receivables, net 3,499 5,506 7,029 1,976
Total assets 4,699,028$ 198,290,060$ 198,382,939$ 4,606,149$
LiabilitiesDue to other governments 1,081,736$ 178,874,670$ 178,868,301$ 1,088,105$Deposits 2,901,429 24,316,000 24,578,632 2,638,797Due to individuals 695,438 1,562,325 1,378,516 879,247
Total liabilities 4,678,603$ 204,752,995$ 204,825,449$ 4,606,149$
129
CAPITAL ASSETS USED IN THE OPERATIONOF GOVERNMENTAL FUNDS
Although not necessary for fair presentation in conformity with generally acceptedaccounting principles, the following schedules are presented to provide greaterdetailed information regarding Capital Assets.
Walton County, FloridaCapital Assets Used in the Operations of Governmental Funds
Schedule by SourceSeptember 30, 2015
130
Governmental Funds Capital Assets:
Land 50,947,114$Buildings 70,455,771Improvements other than buildings 25,745,019Machinery and equipment 54,805,523Infrastructure 135,721,851Construction in progress 21,270,318
Total governmental funds capital assets 358,945,596$
Investment in Governmental Funds Capital Assets by Source:
General Fund 47,837,389$Special Revenue Fund 221,028,104Capital Projects Fund 67,046,440Grants 23,033,663
Total governmental funds capital assets 358,945,596$
Walton County, FloridaCapital Assets Used in the Operations of Governmental Funds
Schedule by Functions and ActivityFor the Year Ended September 30, 2015
ImprovementsOther Than
Function and Activity Land Buildings Buildings
General Government:Finance and administration 301,823$ 5,746,346$ $Comprehensive planningJudicial 166,696 25,542,094 55,140Other general government 6,557,226 546,066 356,145
Total general government 7,025,745 31,834,506 411,285
Public Safety:Law enforcement 697,393 26,769,382 6,497,866Ambulance serviceCivil defense 1,368,037 183,750Building inspection 432,280Emergency 911 130,194Animal control 2,092,770Fire 1,278,750 1,734,021 42,316
Total public safety 1,976,143 32,526,684 6,723,932
Physical Environment 1,044,101 177,786 95,985
Transportation 1,322,029 936,120 214,971
Economic Environment:Housing authorityTourist development 207,600 1,908,419 7,397,064Farmers market 71,693 37,196
Total economic environment 279,293 1,945,615 7,397,064
Human Services:Health 1,206,791 214,748Veterans
Total human services 1,206,791 214,748
Culture and Recreation:Beach access 18,519,998 2,008,526Parks and recreation 20,511,601 172,490 8,678,508Library 268,204 1,655,779
Total culture and recreation 39,299,803 1,828,269 10,687,034
Total governmental funds capital assets 50,947,114$ 70,455,771$ 25,745,019$
131
Machineryand Construction
Equipment Infrastructure In Progress Total
350,584$ $ 8,406$ 6,407,159$133,951 133,951
2,619,456 28,383,3861,849,018 535,225 557,770 10,401,450
4,953,009 535,225 566,176 45,325,946
11,384,868 130,248 45,479,7571,280,508 1,280,508
80,561 170,298 1,802,646158,033 590,313
1,475,999 1,606,19389,146 2,181,916
6,122,129 9,177,216
20,591,244 170,298 130,248 62,118,549
4,271,841 697,094 237,007 6,523,814
22,545,491 134,295,234 20,306,487 179,620,332
18,168 18,1681,308,736 10,821,819
108,889
1,326,904 10,948,876
257,618 1,679,1576,995 6,995
264,613 1,686,152
20,528,524647,804 24,000 30,400 30,064,803204,617 2,128,600
852,421 24,000 30,400 52,721,927
54,805,523$ 135,721,851$ 21,270,318$ 358,945,596$
Walton County, FloridaCapital Assets Used in the Operations of Governmental Funds
Schedule of Changes by Functions and ActivityFor the Year Ended September 30, 2015
CapitalAssets
Function and Activity 10/01/14 Additions
General Government:Finance and administration 6,411,481$ 32,348$Comprehensive planning 143,151Judicial 28,368,791 169,072Other general government 10,252,346 234,386
Total general government 45,175,769 435,806
Public Safety:Law enforcement 45,037,805 1,124,870Ambulance service 881,023 484,467Civil defense 1,461,901 362,975Building inspection 644,125Emergency 911 1,606,193Animal control 2,181,916Fire 8,829,751 547,026
Total public safety 60,642,714 2,519,338
Physical Environment 6,264,851 773,562
Transportation 161,962,670 19,520,202
Economic Environment:Housing authority 18,168Tourist development 10,554,589 267,230Farmers market 108,889
Total economic environment 10,681,646 267,230
Human Services:Health 792,928 931,339Veterans 6,995
Total human services 799,923 931,339
Culture and Recreation:Beach access 20,389,763 138,761Parks and recreation 27,161,946 2,977,490Library 2,163,012
Total culture and recreation 49,714,721 3,116,251
Total governmental funds capital assets 335,242,294$ 27,563,728$
132
CapitalAssets
Deductions Transfers 9/30/15
36,670$ $ 6,407,159$9,200 133,951
154,477 28,383,38685,282 10,401,450
285,629 45,325,946
682,918 45,479,75784,982 1,280,50822,230 1,802,64653,812 590,313
1,606,1932,181,916
199,561 9,177,216
1,043,503 62,118,549
514,599 6,523,814
1,862,540 179,620,332
18,16810,821,819
108,889
10,948,876
45,110 1,679,1576,995
45,110 1,686,152
20,528,52474,633 30,064,80334,412 2,128,600
109,045 52,721,927
3,860,426$ $ 358,945,596$
STATISTICAL SECTION
Statistical schedules differ from financial statements because they usually cover more than one fiscal year and may present non-accounting data. These schedules reflect social and economic data, and financial trends of Walton County, Florida.
133
STATISTICAL SECTION
The statistical section of the comprehensive annual financial report presents detailedinformation as a context for understanding what the information in the financialstatements, note disclosures, and required supplementary information says about theCounty’s overall financial health.
Financial Trends
These schedules contain trend information to help the reader understand how theCounty’s financial performance and well being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the County’s mostsignificant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability ofthe County’s current levels of outstanding debt and their ability to issue additionaldebt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the readerunderstand the environment within which the County’s financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the readerunderstand how the information in the government’s financial report relates to theservices the County provides and the activities it performs.
Walton County, FloridaGovernment Wide Expenses and Revenues
(Accrual Basis of Accounting)September 30, 2015
2015 2014 2013 2012
Government Wide Expenses by FunctionGeneral government 25,430,143$ 21,492,257$ 19,616,228$ 20,059,277$Public safety 39,889,287 37,774,222 38,408,334 35,075,260Physical environment 11,190,946 9,566,044 8,415,882 8,531,130Transportation 15,552,252 27,124,508 24,136,571 23,897,299Economic environment 15,889,294 14,789,508 13,556,398 14,852,494Human services 1,874,924 2,226,393 2,129,798 2,002,946Culture/recreation 4,029,171 1,378,960 1,250,844 2,418,242Debt services 1,071,059 1,136,315 2,929,167 1,262,630Total government wideexpense by function 114,927,076$ 115,488,207$ 110,443,222$ 108,099,278$
Government Wide RevenuesProgram revenuesCharges for services 10,471,312$ 8,092,365$ 5,407,633$ 4,510,316$Operating grants and contributions 4,349,574 3,877,757 6,205,459 8,244,002Capital grants and contributions 14,218,252 8,043,617 5,664,441 5,172,864
General revenuesTaxesProperty taxes 44,521,882 39,934,572 38,065,283 38,070,775Gasoline taxes 5,167,916 4,511,542 4,258,291 4,255,974Sales taxes 36,548,311 33,394,983 29,072,535 21,082,466Tourist development bed tax 20,146,264 19,987,554 18,582,874 16,490,339Other taxes 289,111 297,650 330,000 293,476
State revenue sharing 2,037,312 1,683,966 1,496,532 1,392,992Investment earnings 595,163 1,256,265 (752,996) 2,540,456Miscellaneous 8,292,648 6,530,799 5,708,946 5,248,102Special item 7,227,657 10,370,000 50,000,000 (75,000,000)
153,865,402$ 137,981,070$ 164,038,998$ 32,301,762$Total government wide revenues
134
2011 2010 2009 2008 2007 2006
23,572,423$ 24,071,057$ 27,822,429$ 27,644,349$ 26,715,827$ 19,504,327$35,052,324 34,561,978 35,286,721 35,578,036 30,255,138 29,431,7466,679,998 8,287,141 9,083,856 8,406,852 7,592,001 6,858,304
21,323,130 20,527,838 17,199,977 20,382,695 14,265,123 10,951,17017,659,390 16,982,374 11,312,470 11,724,976 20,375,760 12,599,5262,030,979 1,824,207 2,132,084 2,229,072 2,349,982 2,310,4711,691,665 2,240,925 2,697,038 6,300,285 1,060,797 2,526,7391,249,156 1,417,353 1,590,986 1,601,730 1,193,616 615,479
109,259,065$ 109,912,873$ 107,125,561$ 113,867,995$ 103,808,244$ 84,797,762$
5,378,020$ 4,084,846$ 7,338,090$ 7,898,816$ 8,842,286$ 10,176,631$13,611,753 11,035,696 9,974,653 4,094,229 4,613,097 8,822,0435,864,008 10,884,151 4,370,018 5,929,994 4,146,477 6,170,481
40,140,763 46,352,643 54,269,774 57,314,975 61,098,751 53,919,4704,186,892 4,723,487 4,574,439 5,005,788 5,300,414 5,234,254
19,338,378 17,125,782 18,061,690 19,476,313 18,802,985 18,579,97213,859,997 10,754,716 10,427,800 11,229,379 10,675,183 9,490,409
499,095 563,214 414,994 1,911,670 520,567 504,8911,373,364 1,331,013 1,290,710 1,407,135 1,478,625 1,476,8141,505,357 2,831,626 2,522,783 (373,571) 5,101,333 3,432,0385,458,304 6,984,229 1,760,571 1,422,854 3,157,856 4,283,730
111,215,931$ 116,671,403$ 115,005,522$ 115,317,582$ 123,737,574$ 122,090,733$
Walton County, FloridaGeneral Government Expenditures by Function
(Modified Accrual Basis of Accounting)Last Ten Fiscal Years
Fiscal General Public Physical EconomicYear Government Safety Environment Transportation Environment
2006 20,824,874$ 29,182,792$ 6,935,368$ 25,483,752$ 24,944,031$
2007 25,728,356 31,813,197 7,992,212 19,932,916 20,347,047
2008 25,923,387 35,161,949 7,869,883 22,786,802 13,057,085
2009 26,070,226 33,241,643 7,931,543 21,210,010 16,267,051
2010 22,623,594 34,534,066 8,300,610 21,584,098 17,077,780
2011 20,400,163 33,202,442 7,663,908 21,929,338 17,752,312
2012 18,645,847 31,434,246 8,056,333 23,359,653 14,204,426
2013 19,400,946 35,063,268 8,911,217 19,423,503 14,068,424
2014 20,816,662 35,959,383 9,451,630 22,730,338 15,479,069
2015 28,051,626 38,739,905 10,666,566 29,429,954 16,484,966
* Includes all Governmental Fund Types
135
Human Culture/ Capital DebtServices Recreation Projects Service Total (*)
2,291,041$ 2,584,015$ 15,306,736$ 2,798,999$ 130,351,608$
2,451,655 3,699,616 20,547,160 4,475,529 136,987,688
2,176,211 5,253,942 6,368,819 5,702,867 124,300,945
2,059,608 3,420,403 2,621,824 6,241,922 119,064,230
1,819,515 2,536,322 901,551 5,818,588 115,196,124
1,961,064 1,236,363 720,454 5,474,116 110,340,160
1,879,932 1,945,696 3,699,244 6,756,831 109,982,208
2,018,499 1,432,502 2,896,357 55,854,990 159,069,706
2,224,329 889,381 361,879 8,584,082 116,496,753
2,784,291 3,541,894 2,280,287 39,478,813 170,681,302
Walton County, FloridaGeneral Governmental Revenues by Source
(Modified Accrual Basis of Accounting)Last Ten Fiscal Years
Fiscal Licenses Inter ChargesYear Taxes and Permits governmental for Services
2006 78,686,632$ 2,184,029$ 24,714,949$ 7,745,093$
2007 87,345,332 1,639,183 19,380,157 7,035,488
2008 84,710,136 1,226,417 20,451,969 6,410,094
2009 79,468,926 805,559 23,968,168 6,200,471
2010 71,330,283 811,925 31,529,700 2,843,038
2011 69,118,565 1,075,390 23,021,752 2,844,143
2012 70,988,064 1,515,539 24,101,048 2,771,045
2013 80,465,499 2,171,620 23,268,876 2,958,491
2014 87,629,743 2,316,764 24,183,633 4,837,396
2015 95,226,101 2,530,020 35,584,050 7,136,458
* Includes all Governmental Fund Types.
136
Fines and InvestmentForfeitures Earnings (Loss) Miscellaneous Total*
233,181$ 3,432,038$ 4,344,162$ 121,340,084$
278,178 5,101,333 3,234,273 124,013,944
257,562 (373,573) 2,891,084 115,573,689
242,749 2,522,783 1,859,840 115,068,496
381,625 2,831,624 6,982,664 116,710,859
274,872 1,505,357 12,211,933 110,052,012
237,659 2,540,456 5,248,103 107,401,914
324,413 (752,996) 6,549,334 114,985,237
944,323 1,256,265 7,402,882 128,571,006
653,554 595,162 16,578,493 158,303,838
Walton County, FloridaSchedule of Net Position and Changes in Net Position
(Accrual Basis of Accounting)Last Ten Fiscal Years
2015 2014 2013 2012RevenuesProgram revenue
Charges for servicesGeneral government 3,336,621$ 2,869,825$ 1,552,308$ 1,323,663$Public safety 6,030,010 4,156,691 3,449,112 2,783,665Physical environment 963,849 929,419 244,639 242,074TransportationEconomic environment 111,103 105,248 164,553 133,895Human services 10,800 10,800 10,800 10,800Culture/recreation 18,929 20,382 16,221 16,219
Operating grants and contributions 4,349,574 3,877,757 6,205,459 8,244,002Capital grants and contributions 14,218,252 8,043,617 5,664,441 5,172,864
General revenuesProperty taxes 44,521,882 39,934,572 38,065,283 38,070,775Other taxes 64,188,914 59,875,695 53,740,233 43,515,247Other 8,887,811 7,787,064 4,955,949 7,788,558
Total revenues 146,637,745 127,611,070 114,068,998 107,301,762Expenses
General government 25,430,143 21,492,257 19,616,228 20,059,277Public safety 39,889,287 37,774,222 38,408,334 35,075,260Physical environment 11,190,946 9,566,044 8,415,882 8,531,130Transportation 15,552,252 27,124,508 24,136,571 23,897,299Economic environment 15,889,294 14,789,508 13,556,398 14,852,494Human services 1,874,924 2,226,393 2,129,798 2,002,946Culture and recreation 4,029,171 1,378,960 1,250,844 2,418,242Interest on long term debt 1,071,059 1,136,315 2,929,167 1,262,630
Total expenses 114,927,076 115,488,207 110,443,222 108,099,2787,227,657 10,370,000 50,000,000 (75,000,000)
Prior period adjustment (37,086,830) (4,016)
Increase (decrease) in net position 1,851,496$ 22,492,863$ 53,625,776$ (75,801,532)$
Invested in capital assets,net of related debt 185,573,714$ 183,054,531$ 184,908,949$ 186,263,846$Restricted for:
Debt service 3,531,053 7,957,589 3,912,013 86,274Capital projects 2,044,676 2,058,293 2,110,339 1,310,054Other purposesGeneral government 1,664,480 3,974,323 3,782,011 3,528,147Public safety 2,133,933 2,235,752 1,657,563 1,725,029Transportation 8,646,500 8,594,891 8,256,492 8,153,724Economic environment 586,004 1,054,343 1,014,020 1,161,336Culture and recreationHuman services 382,269 947,709 883,914 903,173
Unrestricted (deficit) 49,593,608 42,427,310 23,286,577 (26,915,481)
Total primary government net assets 254,156,237$ 252,304,741$ 229,811,878$ 176,216,102$
Special item
137
2011 2010 2009 2008 2007 2006
1,300,806$ 1,172,156$ 4,722,559$ 5,169,526$ 5,494,274$ 5,991,275$2,428,121 1,918,562 1,908,136 2,102,745 2,768,290 3,452,5971,478,482 709,129 279,244 284,643 191,404 202,463
20,000141,409 253,201 247,346 265,710 314,302 338,87210,500 10,500 138,781 57,446 55,783 171,72018,702 21,298 22,024 18,746 18,233 19,704
10,941,594 11,035,696 9,974,653 4,094,229 4,613,097 8,822,0435,864,008 10,884,151 4,370,018 5,929,994 4,146,477 6,170,481
40,140,763 46,352,643 54,269,774 57,314,975 61,098,751 53,919,47041,927,885 34,498,212 34,769,633 37,623,150 36,777,774 35,286,3406,963,661 9,815,855 4,283,354 2,456,418 8,259,189 7,715,768
111,215,931 116,671,403 115,005,522 115,317,582 123,737,574 122,090,733
23,572,423 24,071,057 27,822,429 27,644,349 26,715,827 19,504,32735,052,324 34,561,978 35,286,721 35,578,036 30,255,138 29,431,7466,679,998 8,287,141 9,083,856 8,406,852 7,592,001 6,858,30421,323,130 20,527,838 17,199,977 20,382,695 14,265,123 10,951,17017,659,390 16,982,374 11,312,470 11,724,976 20,375,760 12,599,5262,030,979 1,824,207 2,132,084 2,229,072 2,349,982 2,310,4711,691,665 2,240,925 2,697,038 6,300,285 1,060,797 2,526,7391,249,156 1,417,353 1,590,986 1,601,730 1,193,616 615,479
109,259,065 109,912,873 107,125,561 113,867,995 103,808,244 84,797,762
(793,626) (277,111) (93,553) 19,221,573
1,163,240$ 6,481,419$ 7,786,408$ 1,449,587$ 19,929,330$ 56,514,544$
182,774,876$ 182,380,862$ 176,400,438$ 162,401,026$ 161,637,512$ 145,851,764$
254,362 732,286 740,398 715,3826,270,344 6,559,468 6,243,272 45,896,780 33,992,249 28,389,956
16,573,730 17,408,9734,857,020 4,571,618 4,939,3952,277,900 2,021,104 1,339,423 2,073,02310,569,615 15,387,734 16,382,7841,030,636 1,084,532 1,248,879 11,028,140
335,776778,246 715,035 612,151 515,697
43,458,997 38,134,041 36,952,271 13,510,286 21,709,005 22,357,489
252,017,634$ 250,854,394$ 244,372,975$ 236,493,014$ 234,652,894$ 214,723,564$
Walton County, FloridaFund Balances, Governmental Funds
(Modified Accrual Basis of Accounting)Last Ten Fiscal Years
2015 2014 2013 2012
General FundReserved $ $ $ $Unreserved
General FundNonspendable 816,015 2,982,067 2,599,162 2,691,134Restricted 1,173,500 1,128,160 1,046,541 976,192Assigned 4,290,458 3,933,644 2,939,435 5,263,998Unassigned 15,603,519 12,559,627 11,177,642 11,252,947
Total general fund 21,883,492 20,603,498 17,762,780 20,184,271
All Other Governmental FundsReservedUnreserved, reported in:Capital projectsDebt serviceSpecial revenue funds
All Other Governmental FundsNonspendable 493,143 468,455 466,080 477,074Restricted 17,986,301 23,729,155 18,653,573 14,500,603Committed 35,824,170 30,002,035 21,340,544 12,889,101Assigned 43,844,489 31,371,414 24,502,866 28,387,751Unassigned
Total other governmental funds 98,148,103 85,571,059 64,963,063 56,254,529
Total governmental funds 120,031,595$ 106,174,557$ 82,725,843$ 76,438,800$
* Change in presentation due to implementation of GASB Statement No. 54,Fund Balance Reporting and Governmental Fund Type Definitions.
138
2010 * 2009 2008 2007 2006 2005
$ $ 7,616,738$ 6,946,876$ 7,504,002$ 4,596,097$18,594,974 22,583,776 21,176,354 16,835,733
2,839,561 2,913,0312,261,119 2,720,9636,264,162 5,354,212
14,052,421 13,540,321
25,417,263 24,528,527 26,211,712 29,530,652 28,680,356 21,431,830
10,503,030 9,594,736 11,708,243 9,908,164
7,305,239 21,774 3,058,279 10,375,493285,000 12,750 75,595 143,000
37,413,205 41,381,658 34,093,282 34,727,782
506,740 525,49625,872,025 25,559,5487,317,829 6,010,894
20,368,146 21,117,328(6,830)
54,064,740 53,206,436 55,506,474 51,010,918 48,935,399 55,154,439
79,482,003$ 77,734,963$ 81,718,186$ 80,541,570$ 77,615,755$ 76,586,269$
Walton County, FloridaChanges in Fund Balance Governmental Funds
(Modified Accrual Basis of Accounting)Last Ten Fiscal Years
2015 2014 2013 2012
RevenuesTaxes 95,226,101$ 87,629,743$ 80,465,499$ 70,988,064$Licenses and permits 2,530,020 2,316,764 2,171,620 1,515,539Intergovernmental 35,584,050 24,183,633 23,268,876 24,101,048Charges for services 7,136,458 4,837,396 2,958,491 2,771,045Fines and forfeitures 653,554 944,323 324,413 237,659Interest 595,162 1,256,265 (752,996) 2,540,456Miscellaneous 9,350,836 7,402,882 6,549,334 5,248,103
Total revenues 151,076,181 128,571,006 114,985,237 107,401,914
ExpendituresCurrent
General government 28,051,626 20,816,662 19,400,946 18,645,847Public safety 38,739,905 35,959,383 35,063,268 31,434,246Physical environment 10,666,566 9,451,630 8,911,217 8,056,333Transportation 29,429,954 22,730,338 19,423,503 23,359,653Economic environment 16,484,966 15,479,069 14,068,424 14,204,426Human services 2,784,291 2,224,329 2,018,499 1,879,932Culture/recreation 3,541,894 889,381 1,432,502 1,945,696Capital projects 2,280,287 361,879 2,896,357 3,699,244
Debt servicePrincipal 38,396,195 7,559,324 52,804,659 5,656,634Interest 1,082,618 1,024,758 3,050,331 1,100,197
Total expenditures 171,458,302 116,496,753 159,069,706 109,982,208
Excess Revenue Over (Under)Expenditures (20,382,121) 12,074,253 (44,084,469) (2,580,294)
Other Financing Sources (Uses)Transfers in 16,935,224 16,537,000 11,601,547 13,873,137Transfers out (16,935,224) (16,537,000) (11,601,547) (13,873,137)Capital lease proceedsIssuance of debt 27,018,625 997,460 371,512 75,199,009
Total other financing sources 27,018,625 997,460 371,512 75,199,009
Special item 7,227,657 10,370,000 50,000,000 (75,000,000)
Net change in fund balance 13,864,161$ 23,441,713$ 6,287,043$ (2,381,285)$
Debt service as a percentage ofnoncapital expenditures 27.38% 7.83% 37.17% 7.29%
139
2011 2010 2009 2008 2007 2006
69,118,565$ 71,330,283$ 79,468,926$ 84,710,136$ 87,345,332$ 78,686,632$1,075,390 811,925 805,559 1,226,417 1,639,183 2,184,029
23,021,752 31,529,700 23,968,168 20,451,969 19,380,157 24,714,9492,844,143 2,843,038 6,200,471 6,410,094 7,035,488 7,745,093274,872 381,625 242,749 257,562 278,178 233,181
1,505,357 2,831,624 2,522,783 (373,573) 5,101,333 3,432,03812,211,933 6,982,664 1,859,840 2,891,084 3,234,273 4,344,162
110,052,012 116,710,859 115,068,496 115,573,689 124,013,944 121,340,084
20,400,163 22,623,594 26,070,226 25,923,387 25,728,356 20,824,87433,202,442 34,534,066 33,241,643 35,161,949 31,813,197 29,182,7927,663,908 8,300,610 7,931,543 7,869,883 7,992,212 6,935,368
21,929,338 21,584,098 21,210,010 22,786,802 19,932,916 25,483,75217,752,312 17,077,780 16,267,051 13,057,085 20,347,047 24,944,0311,961,064 1,819,515 2,059,608 2,176,211 2,451,655 2,291,0411,236,363 2,536,322 3,420,403 5,253,942 3,699,616 2,584,015720,454 901,551 2,621,824 6,368,819 20,547,160 15,306,736
4,218,038 4,392,846 4,630,530 4,168,339 3,281,913 2,183,5201,256,078 1,425,742 1,611,392 1,534,528 1,193,616 615,479
110,340,160 115,196,124 119,064,230 124,300,945 136,987,688 130,351,608
(288,148) 1,514,735 (3,995,734) (8,727,256) (12,973,744) (9,011,524)
9,762,294 11,450,568 12,240,617 13,161,882 15,972,052 14,768,839(9,762,294) (11,450,568) (12,240,617) (13,161,882) (15,972,052) (14,768,839)
10,798 641,006423,872 232,305 9,903,872 15,728,676 9,400,000
423,872 232,305 10,798 9,903,872 15,728,676 10,041,006
135,724$ 1,747,040$ (3,984,936)$ 1,176,616$ 2,754,932$ 1,029,482$
5.60% 5.87% 6.61% 7.47% 4.96% 3.70%
Walton County, FloridaProperty Tax Levies and Collections
Last Ten Fiscal Years
140
Total Tax Percent Collections PercentFiscal Levy for age in Subsequent ageYear Fiscal Year (1) Amount (2) of Levy Years (2) Amount (2) of Levy
2006 55,477,843$ 52,123,639$ 93.95% 1,308,213 53,431,852$ 96.31%
2007 62,172,073 57,458,118 92.42% 2,710,393 60,168,466 96.78%
2008 58,646,179 54,517,005 92.96% 2,703,307 57,219,649 97.57%
2009 55,516,392 50,724,269 91.37% 2,863,824 53,586,842 96.52%
2010 46,952,359 42,659,809 90.86% 2,727,622 45,383,427 96.66%
2011 40,757,346 37,815,939 92.78% 1,579,929 39,388,083 96.64%
2012 38,910,800 36,394,247 93.53% 1,162,182 37,549,670 96.50%
2013 38,900,662 36,561,502 93.99% 1,024,111 37,561,604 96.56%
2014 40,763,405 39,259,877 96.31% 19,811 39,279,688 96.36%
2015 45,538,540 43,974,522 96.57% 0.00%
(1) Source: Walton County Property Appraiser(2) Source: Walton County Tax Collector
be 100 percent of the tax levy. Taxes become delinquent on April 1st of each year and taxcertificates for the full amount of any unpaid taxes and assessments must be sold not later than June
Property is assessed as of January 1st and taxes based on those assessments are levied andbecome due on the following November 1st. Therefore, assessments and tax levies applicable to acertain tax year are collected in the fiscal year ending during the following calendar year.
June 1st of each year.
Collected within theTotal Collections to DateFiscal Year of the Levy
Property tax levies, based on assessed values as of January 1st, become due and payable on
this discount declining by one percent each month thereafter. Accordingly, taxes collected will neverNovember 1st each year. A four percent discount is allowed if the taxes are paid in November, with
Walton County, FloridaSpecial Assessments Collections
Last Ten Fiscal Years
141
PavingNew Collections Total
Fiscal Liens and OutstandingYear Assessed Adjustments Assessments
2006 $ 270,000$ 830,000$
2007 220,000 610,000
2008 230,000 380,000
2009 380,000
2010
2011
2012
2013
2014
2015
Walton County, FloridaAssessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Fiscal Assessed Estimated Assessed EstimatedYear Value (1) Actual Value Value (1) Actual Value
2006 15,780,961,085$ 15,780,961,085$ 385,027,283$ 385,027,283$
2007 16,953,931,986 16,953,931,986 439,389,800 439,389,800
2008 16,081,588,279 16,081,588,279 414,872,647 414,872,647
2009 13,367,658,712 13,367,658,712 401,799,076 401,799,076
2010 11,073,298,749 11,073,298,749 381,153,516 381,153,516
2011 10,569,863,088 10,569,863,088 365,866,079 365,866,079
2012 10,564,541,553 10,564,541,553 368,067,831 368,067,831
2013 11,078,199,998 11,078,199,998 375,510,876 375,510,876
2014 12,131,527,248 12,131,527,248 385,409,544 385,409,544
2015 13,553,530,003 13,553,530,003 410,933,844 410,933,844
(1) Source: Walton County Property Appraiser(2) Source: Centrally assessed property consists of railroad and utility systems
assessed by the State of Florida.
Property is assessed as of January 1st and taxes based on those assessmentsare levied and become due on the following November 1st. Therefore, assessments and levies applicable to a certain tax year are collected in the fiscal yearending during the following fiscal year.
Real Property Personal Property
142
Ratioof TotalAssessed
Total to EstimatedAssessed Estimated Assessed Estimated Direct Tax ActualValue (1) Actual Value Value (1) Actual Value Rate Value
5,272,325$ 5,272,325$ 16,171,260,693$ 16,171,260,693$ 3.826 100%
5,491,109 5,491,109 17,398,812,895 17,398,812,895 3.370 100%
4,666,270 4,666,270 16,501,127,196 16,501,127,196 3.364 100%
9,260,162 9,260,162 13,778,717,950 13,778,717,950 3.408 100%
6,151,828 6,151,828 11,460,604,093 11,460,604,093 3.557 100%
5,642,587 5,642,587 10,941,371,754 10,941,371,754 3.557 100%
5,911,639 5,911,639 10,938,521,023 10,938,521,023 3.556 100%
6,177,997 6,177,997 11,459,888,871 11,459,888,871 3.556 100%
6,380,956 6,380,956 12,523,317,748 12,523,317,748 3.556 100%
6,474,962 6,474,962 13,970,938,809 13,970,938,809 3.636 100%
Centrally Assessed Total
Walton County, FloridaProperty Tax Rates – Direct and Overlapping Governments
Last Ten Fiscal Years
2015 2014 2013 2012
Board of County CommissionersGeneral Fund 1.291 1.348 1.710 1.480County Transportation Trust Fund 0.397 0.260 0.286 0.550Fine and Forfeiture Fund 1.948 1.948 1.560 1.526Capital Projects FundDebt Service
Total general county 3.636 3.556 3.556 3.556
District School System 5.491 5.491 5.659 5.013
Total County wide 9.127 9.047 9.215 8.569
Special DistrictsSouth Walton Mosquito Control 0.163 0.138 0.138 0.114Tri Village Fire District FLAT FLAT FLAT FLATSouth Walton Fire District 0.980 0.980 0.980 0.980United Fire District FLAT FLAT FLAT FLATNorth Walton Mosquito Control 0.491 0.491 0.491 0.491Argyle Fire District FLAT FLAT FLAT FLAT
NorthWest FloridaWater District 0.039 0.040 0.040 0.040
CitiesDeFuniak Springs 4.500 4.500 4.500 4.500Freeport 4.730 4.730 4.730 4.730
Source: Walton County Property Appraiser and Walton County Office of Managementand Budget
Note:(1) Rates are stated as an amount per $1,000 of assessed value.(2) Flat rates vary depending on parcel type ranging from $25 to $82.
143
2011 2010 2009 2008 2007 2006
1.410 1.449 1.732 1.640 1.647 2.0030.689 0.700 0.458 0.816 0.857 1.0221.458 1.408 1.218 0.900 0.834 0.785
0.0180.008 0.014 0.016
3.557 3.557 3.408 3.364 3.370 3.826
5.011 5.070 4.654 4.047 4.047 4.183
8.568 8.627 8.062 7.411 7.417 8.009
0.114 0.114 0.099 0.100 0.074 0.095FLAT FLAT FLAT FLAT FLAT FLAT0.900 0.860 0.760 0.760 0.700 0.800FLAT FLAT FLAT FLAT FLAT FLAT0.491 0.491 0.491 0.491 0.507 0.598FLAT FLAT FLAT FLAT FLAT FLAT
0.040 0.045 0.045 0.045 0.045 0.050
4.000 4.500 4.500 4.500 4.500 4.5004.730 3.930 3.930 3.930 3.930 3.930
Walton County, FloridaRatio of Outstanding Debt by Type
Last Ten Fiscal Years
General SpecialObligation Assessment Notes Capital
Year Bonds Debt Payable Leases
2006 875,000$ 830,000$ 18,989,474$ 644,656$
2007 675,000 610,000 31,492,631 988,759
2008 460,000 380,000 37,811,246 883,423
2009 235,000 34,046,008 911,040
2010 30,225,135 801,427
2011 26,346,119 886,277
2012 96,201,475 573,297
2013 43,594,679 746,947
2014 36,609,442 1,170,320
2015 25,500,941 773,219
(1) See Demographic Statistics on page 134 for detail of population and per capita personalincome.
(2) Details regardingWalton County's outstanding debt can be found in Note 8 of thefinancial statements.
144
Percentageof Personal Per Capita
Total Income (1) (1)
21,339,130$ 1.30% 383
33,766,390 1.93% 591
39,534,669 2.23% 684
35,192,048 2.05% 608
31,026,562 1.78% 543
27,232,396 1.65% 491
96,774,772 5.57% 1,699
44,341,626 2.48% 767
37,779,762 1.66% 632
26,274,160 0.95% 433
Walton County, FloridaRatio of Net General Bonded Debt To
Assessed Value and Net Bonded Debt Per CapitaLast Ten Fiscal Years
LessAssessed Gross Debt Service
Year Population* Value** Bonded Debt Funds***
2006 55,786 16,171,260,693$ 875,000$ 353,740$
2007 57,093 17,398,812,895 675,000 377,197
2008 57,784 16,501,127,196 460,000 372,531
2009 57,917 13,778,717,950 235,000 246,750
2010 57,120 11,460,604,093
2011 55,450 10,941,371,754
2012 56,965 10,938,521,023
2013 57,779 11,459,888,871
2014 59,793 12,523,317,748
2015 60,687 13,970,938,809
* Source: Florida Legislative Office of Economic and Demographic Research** Source: Walton County Property Appraiser.***Amount consists of those monies available for general obligation debt only.
145
Ratio of NetBonded Debt to Net Bonded
Net Bonded Assessed DebtDebt Value Per Capita
521,260$ 0.003% 9.34
297,803 0.002% 5.22
87,469 0.001% 1.51
(11,750) 0.000% (0.20)
0.000% 0.00
0.000% 0.00
0.000% 0.00
0.000% 0.00
0.000% 0.00
0.000% 0.00
Walton County, FloridaSpecial Assessment Bond Coverage
MSBU Driftwood EstatesLast Ten Fiscal Years
Net RevenueFiscal Gross AvailableYear Revenue* Expenses Debt Service
2006 297,775$ 23,605$ 274,170$
2007 295,519 22,073 273,446
2008 279,053 24,033 255,020
2009 129,452 11,088 118,364
2010
2011
2012
2013
2014
2015
*Gross Revenue shall mean all rates, fees, assessments, transfers, and othermiscellaneous revenues.
** County began prepaying outstanding bonds in 2004.
146
Principal Interest Total Coverage
270,000$ 79,000$ 349,000$ 0.79
220,000 59,067 279,067 0.98
230,000 28,466 258,466 0.99
380,000 30,400 410,400 0.29
**Debt Service Requirement
Walton County, FloridaRatio of Annual Debt Service Expenditures of General
Bonded Debt To Total General Governmental ExpendituresLast Ten Fiscal Years
147
Ratio ofDebt Service
Other Total to TotalFiscal Debt Total Debt General GeneralYear Principal Interest Service Service (1) Expenditures (2) Expenditures
2006 195,000$ 50,773$ $ 245,773$ 130,351,608$ 0.19%
2007 200,000 41,535 241,535 136,987,688 0.18%
2008 215,000 27,946 242,946 124,300,945 0.20%
2009 225,000 23,000 248,000 119,064,230 0.21%
2010 235,000 11,750 246,750 115,196,124 0.21%
2011 110,340,160 0.00%
2012 109,982,208 0.00%
2013 159,069,706 0.00%
2014 116,496,753 0.00%
2015 171,458,302 0.00%
(1) Source: Walton County Clerk of the Circuit Court Finance Department(2) Includes all Govermental Fund Types.
Walton County, FloridaBond Coverage
Last Ten Fiscal Years
148
Revenue Bond CoverageThe last revenue bonds issued were for highway paving and were retired in 1993.There have been no subsequent revenue bonds issued.
Legal DebtMarginThe constitution of the State of Florida, Florida Statute 200.181 and Walton County setno legal debt limit.
Walton County, FloridaDemographic Statistics
Last Ten Fiscal Years
149
PersonalPop Per Capita Income School
Fiscal ulation Personal (amt. in Enroll Walton UnitedYear (1) Income (1) thousands) (2) ment (3) County Florida States
2006 55,786 29,390$ 1,639,551$ 6,756 2.20% 3.30% 4.30%
2007 57,093 30,591 1,746,532 6,935 2.60% 4.20% 4.50%
2008 57,784 30,662 1,771,773 7,095 5.80% 7.80% 7.10%
2009 57,917 29,681 1,719,034 7,207 6.80% 11.30% 9.50%
2010 57,120 30,601 1,747,929 7,405 8.10% 12.10% 9.20%
2011 55,450 29,706 1,647,216 7,606 7.20% 10.60% 8.80%
2012 56,965 30,518 1,738,456 7,930 5.50% 8.60% 7.60%
2013 57,779 30,954 1,788,494 8,466 4.00% 6.90% 7.00%
2014 59,793 37,976 2,270,699 8,605 3.90% 6.10% 5.70%
2015 60,687 45,764 2,777,280 8,928 4.50% 5.00% 5.00%
(1) Source: Florida Legislative Office of Economic and Demographic Research(2) Personal income is a calculated amount based on population and per capita
personal income.(3) Source: Walton County School Board(4) Source: Florida Research & Economic Database
Unemployment Rate (4)Percentage
Walton County, FloridaOperating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2015 2014 2013
General GovernmentSingle family dwelling permits 1,155 1,113 1,236Total building and other permits issued 9,705 9,459 9,964Building inspections conducted 19,134 17,964 16,459
Public SafetyNumber of E911 calls 61,727 59,518 52,642Number of E911 Fire/EMS calls 8,821 8,751 8,036Animal control responses 5,013 4,281 4,926
Tourist Development CouncilBed tax receipts (gross dollars in thousands) ** 20,148$ 19,988$ 18,582$
LibraryNumber of registered borrowers 44,095 43,109 41,141Number of visits 119,098 131,280 113,728Number of items in collection 109,297 108,125 106,421
Constitutional Officers:Clerk of Circuit Court
Marriage licenses issued 1724 1,581 1,658Instruments recorded 42,812 42,911 44,359Civil cases filed 2986 2,594 2,757Misdemeanor cases filed 1716 1,667 2,114Felony cases filed 898 804 821Traffic infractions 5217 5,912 608
Supervisor of ElectionsNumber of registered voters 43,492 42,126 40,426Number of polling places 21 21 21
Property AppraiserParcels in county 80,445 80,145 79,866
Tax CollectorTax deeds sold 129 84 322Tax certificates sold 4,364 4,783 4,518
SheriffLaw enforcement officers 152 221 169Calls for service 160,625 167,910 158,447Misdemeanor arrests 2,284 2,699 2,970
* Information is not available for the year presented** Information for FY 10 forward includes an additional half cent tax collected beginning in
October 2009. Also, the 2011 information includes a $2.67million payment from BPfor the Deepwater Horizon oil spill.
Source: All information has been provided by Constitutional Offices and Board of CountyCommissioner Departments.
150
2012 2011 2010 2009 2008 2007 2006
1,008 475 279 223 412 811 9977,055 5,114 3,889 3,802 5,289 13,274 17,76510,800 7,461 5,586 5,775 8,310 12,860 18,997
46,752 53,606 30,096 27,542 30,172 28,242 28,9068,189 7,914 7,185 5,292 5,288 7,797 12,4864,836 5,240 5,956 7,042 6,690 6,761 3,965
16,490$ 16,530$ 10,755$ 10,433$ 11,229$ 10,675$ 9,490$
37,865 37,865 35,818 33,769 32,110 29,023 27,181128,954 148,897 170,335 217,936 211,244 193,272 177,889105,873 104,192 102,882 101,106 98,863 94,536 88,655
1,721 1,655 1,451 1,563 1,456 1,397 1,17941,251 38,009 38,286 39,483 40,771 44,620 50,1702,132 2,040 2,753 3,815 3,473 2,351 1,6981,913 1,072 1,517 1,695 1,601 2,467 2,313756 759 781 839 855 977 959
7,890 9,195 9,740 9,957 10,447 12,641 9,771
37,881 37,983 36,958 37,105 36,847 33,214 33,79821 21 33 33 33 33 33
79,142 78,814 78,718 78,498 77,958 76,326 72,850
102 117 201 223 262 57 1085,193 5,373 7,163 7,583 6,336 4,817 3,130
160 160 166 165 157 161 152165,599 135,337 127,110 90,220 67,407 79,848 71,5792,455 2,222 2,435 2,396 2,492 3,331 3,007
Walton County, FloridaPrincipal Employers
Current Year and Nine Years Ago
Percentageof TotalCounty
Employer Employees (1) Rank Employment
Walton County School Board 1,150 1 4.4%
Walton County Government 880 2 3.4%
Sandestin Golf and Beach Resort 800 3 3.1%
Hilton Sandestin Beach and Golf Resort 600 4 2.3%
Sacred Heart Hospital of the Emerald Coast 550 5 2.1%
Wal Mart 444 8 1.7%
Publix SuperMarkets 370 7 1.4%
Walton Correctional Institution 290 8 1.1%
Watercolor Inn and Resort 290 9 1.1%
Wyndham Vacation Rentals (former ResortQuest) 120 10 0.5%
St. Joe Co
Professional Products Company
Healthmark Regional Medical Center
Total 5,494 15.8%
Total number of individuals employedwithin Walton County (2) 25,848
Sources:(1) Information has been provided by Enterprise Florida, the Walton County School Board,Walton County Economic Development Alliance, and the Walton CountyClerk of Courts Finance Department
(2) Florida Research and Economics Database
2015
151
Percentageof TotalCounty
Employees Rank Employment
1,011 2 3.6%
906 3 3.2%
1,200 1 4.3%
560 4 2.0%
500 6 1.8%
280 8 1.0%
515 5 1.8%
450 7 1.6%
175 10 0.6%
238 9 0.8%
5,835 21.8%
28,228
2006
Walton County, FloridaPrincipal Property Taxpayers
Current Year and Nine Years Ago
Percentage ofTotal Net
Assessed AssessedTaxpayer Value (1) Rank Value
EBSCO Gulf Coast Development 83,653,314$ 1 0.60%
Choctawhatchee Electric Cooperative 78,163,845 2 0.56%
Sandestin Hilton, LTD 48,226,383 3 0.35%
Florida Gas Transmission Company 44,809,161 4 0.32%
Sandestin Investments, LLC 43,400,042 5 0.31%
D R Horton 36,542,012 6 0.26%
Gulf Power Company 36,303,562 7 0.26%
Grand Boulevard Retail 26,209,042 8 0.19%
TerraMar Apartments 1 26,162,056 9 0.19%
Powersouth Energy Coop 25,067,766 10 0.18%
Silver Sands Joint Venture
Intrawest Sandestin Company, LLC
St. Joe Arvida Home Building, LP
St. Joe Paper Company
Sprint Florida Incorporated
EGCD Conservation, Inc.
Adams Homes of Northwest Florida
Total Principal Taxable Vaule 448,537,183 3.21%
Total Taxable Assessed Value 13,970,938,809$ 100.00%
(1) Source: Walton County Property Appraiser
2015
152
Percentage ofTotal Net
Assessed AssessedValue (1) Rank Value
53,037,901$ 4 0.33%
69,143,557 2 0.43%
54,549,234 3 0.34%
28,091,531 10 0.17%
86,496,842 1 0.53%
41,843,610 5 0.26%
34,098,165 7 0.21%
40,910,132 6 0.25%
32,564,567 8 0.20%
29,239,219 9 0.18%
469,974,758 2.91%
16,171,260,693$ 100.00%
2006
Walton County, FloridaProperty Value, Construction and Bank Deposits
Current Year and Nine Years Ago
153
Fiscal Real Property BankYear Value (1) Construction (2) Deposits (3)
2006 15,780,961,085$ 548,434,627$ 675,020,000$
2007 16,953,931,986 356,323,354 727,073,000
2008 16,081,588,279 247,186,572 652,904,000
2009 13,367,658,712 129,929,080 918,162,000
2010 11,073,298,749 141,405,887 726,402,000
2011 10,569,863,088 207,372,914 752,223,000
2012 10,564,541,553 331,849,719 796,309,000
2013 11,078,199,998 466,542,649 873,975,000
2014 12,131,527,248 552,037,678 867,573,000
2015 13,553,530,003 620,210,506 929,365,000
(1) Source: Walton County Property Appraiser(2) Source: Walton County Building Department(3) Source: Data from 2001 2008 provided by the Florida Bankers Association, beginning
in 2009 this information is provided by the FDIC
Walton County, FloridaCapital Assets By Function/Program
Last Ten Fiscal Years
2015 2014 2013 2012
General GovernmentFacilities owned/leased (sq. ft.) 500,724 369,424 363,386 363,386Libraries (sq. ft.) 16,961 16,961 16,961 16,961
Public SafetyFire/Rescue vehicles (number)* 51 48 50 46EMS/Fire stations(number) 22 22 22 21
Tourist Development CouncilBeaches (miles) 26 26 26 26Beach access (number) 61 60 60 62
TransportationPaved miles 758 756 752 749Unpaved miles 404 406 410 413
Culture and RecreationParks (number) 21 21 21 21Parks with boat ramps (number) 18 18 18 18
Constitutional Officers:Clerk of Circuit Court
Facilities (sq. ft.) 42,990 42,990 42,990 42,990Facilities (number) 2 2 2 2
Supervisor of ElectionsFacilities (sq. ft.) 3,900 3,900 3,900 3,900Facilities (number) 2 2 2 2
Property AppraiserFacilities (sq. ft.) 8,100 8,100 8,100 8,100Facilities (number) 2 2 2 2
Tax CollectorFacilities (sq. ft.) 7,400 7,400 7,400 7,400Facilities (number) 2 2 2 2
SheriffFacilities/Stations 6 6 5 5Facilities owned (sq. ft.) 61,668 61,668 39,400 39,400
* The increase in 2007 is due to the consolidation of the EMS and Fire Departments intoone Paramedics/Firefighters Department. Prior to 2007, only the number of EMS vehicleswere reported.
**Source: All information has been provided by Constitutional Offices and Board of CountyCommissoner Departments.
154
2011 2010 2009 2008 2007 2006
363,386 363,386 346,406 346,406 346,406 197,58816,961 16,961 16,961 16,961 16,961 16,961
47 44 45 44 44 1421 21 21 21 21 21
26 26 26 26 26 2662 62 62 53 56 56
745 735 728 720 701 689418 423 429 437 456 469
20 20 16 12 11 818 18 21 16 15 15
42,990 42,990 42,990 42,990 42,990 12,9902 2 2 2 2 2
3,900 3,900 3,900 3,900 3,900 4,0802 2 2 2 2 2
8,100 8,100 8,100 8,100 8,100 7,1202 2 2 2 2 2
7,400 7,400 7,400 7,400 7,400 5,9372 2 2 2 2 2
5 5 5 5 5 539,400 39,400 39,400 39,400 39,400 45,788
Walton County, FloridaFull Time Equivalent Government Wide Employees By Function
Last Ten Fiscal Years
2015 2014 2013
General government 101 120 83Public safety 109 95 156Physical environment 23 19 24Transportation 128 127 127Economic environment 40 40 40Human services 6 7 11Culture and recreation 17 30 26
Total County government 424 438 467
Constitutional Officers:Clerk of the Circuit Court 71 67 69Property Appraiser 28 29 28Tax Collector 32 32 32Sheriff 319 347 241Supervisor of Elections 6 7 6
Total Constitutional Officers 456 482 376
Total government wide employees by function 880 920 843
Sources: All information has been provided by Constitutional Offices andthe Walton County Clerk of Courts Finance Department.
155
2012 2011 2010 2009 2008 2007 2006
77 82 92 109 123 131 135152 149 165 171 196 200 13425 23 23 25 25 24 23125 130 149 156 149 152 15537 32 33 37 35 36 3914 13 5 5 12 11 1126 26 29 30 32 32 30
456 455 496 533 572 586 527
65 67 64 69 69 69 6929 30 32 31 34 34 3432 29 27 28 27 30 27232 237 235 230 212 202 2416 6 7 6 6 9 8
364 369 365 364 348 344 379
820 824 861 897 920 930 906
Walton County, FloridaSchedule of Insurance in Force
September 30, 2015
156
InsuranceType of Coverage Details of Coverage Company Policy Period
Automobile $200,000 per person FloridaMunicipal Insurance 10/1/14 15$300,000 per occurrence Trust Administered by the
Florida League of Cities
Property CoverageReal Property $64,888,921 FloridaMunicipal Insurance 10/1/14 15Personal Property $10,268,833 Trust Administered by theInland Marine $10,240,038 Florida League of Cities
Worker's $1,000,000 statutory Preferred Governmental 10/1/14 15Compensation liability Insurance Trust
General Liability $50,000 per occurrence Florida Association 10/1/14 15for fire of County Trust
$100,000 per person$200,000 per occurrencestatutory liability
$1,000,000 per occurrenceoutside of Florida
$3,000,000 coverage partaggregate
Health Insurance Contract specification BC/BS of Florida 10/1/14 15BC/BS of Florida
Accidental Death and $10,000 to $50,000 Sun Life Insurance 10/1/14 15Dismemberment depending upon employee Company
classification and natureof injury and/or cause ofdeath
Life Insurance $10,000 to $50,000 BC/BS of Florida 10/1/14 15depending upon Florida Combinedemployee classification Life Insurance
Company
Long Term Disability 60% of income up to a BC/BS of Florida 10/1/14 15Insurance maximum of $7,000 per Sun Life Insurance
month Company
Worker's Compensation $2,500Accidental Death National Casualty 10/1/14 15for Community $5,000Dismemberment CompanyService Workers $10,000Medical
Accident Medical for $100,000 per injury AIG Accident & Health 10/1/14 15Parks & Recreation
Source: Walton County Human Resource Department
CCOMPLIANCE SECTION
This section is presented to demonstrate compliance with the Single Audit requirements of the United States Office of Management and Budget and related compliance reporting requirements of the Auditor General of the State of Florida, including the Florida Single Audit.
157
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Members of theBoard of County CommissionersWalton County, Florida
We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the financial statements of thegovernmental activities, the discretely presented component unit, each major fund, proprietaryfund and the aggregate remaining fund information of Walton County, Florida (the “County”) as ofand for the 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 reportthereon dated June 24, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the County’sinternal control over financial reporting (internal control) to determine the audit procedures thatare appropriate in the circumstances for the purpose of expressing our opinions on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of the County’sinternal control. Accordingly, we do not express an opinion on the effectiveness of the County’sinternal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or acombination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or, significant deficiencies and therefore, material weaknesses or significantdeficiencies may exist that were not identified. We did identify certain deficiencies in internalcontrol, described in the accompanying schedule of findings and questioned costs that we considerto be material weaknesses. (2015 01).
158
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that isless severe than a material weakness, yet important enough to merit attention by those chargedwith governance. We consider the deficiencies described in the accompanying schedule of findingsand questioned costs to be significant deficiencies. (2015 02).
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the County’s financial statements are freefrom material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing anopinion on compliance with those provisions was not an objective of our audit, and accordingly, wedo not express such an opinion. The results of our tests disclosed no instances of noncompliance orother matters that are required to be reported under Government Auditing Standards.
Walton County, Florida’s Response to Findings
Walton County, Florida’s response to findings identified in our audit is described in theaccompanying schedule of findings and questioned costs. Walton County, Florida’s response wasnot subjected to the auditing procedures applied in the audit of the financial statements and,accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 24, 2016
159
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOREACH MAJOR FEDERAL PROGRAM AND EACH MAJOR STATE PROJECTAND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMBCIRCULAR A 133 AND THE FLORIDA SINGLE AUDIT ACT
Honorable Members of theBoard of County CommissionersWalton County, Florida
Report on Compliance for Each Major Federal Program and Each Major State Project
We have audited Walton County, Florida’s (the “County”) compliance with the types of compliancerequirements described in the OMB Circular A 133 Compliance Supplement and the Department ofFinancial Services’ State Projects Compliance Supplement that could have a direct and materialeffect on each of the County’s major federal programs and major state projects for the year endedSeptember 30, 2015. The County’s major federal programs and major state projects are identified inthe summary of auditors’ results section of the accompanying schedule of findings and questionedcosts.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts,and grants applicable to its federal programs and state projects.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the County’s major federalprograms and major state projects based on our audit of the types of compliance requirementsreferred to above. We conducted our audit of compliance in accordance with auditing standardsgenerally accepted in the United States of America; the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates; OMB Circular A 133, Audits of States, Local Governments, and Non Profit Organizations;Chapter 10.550, Rules of the Auditor General; and the Florida Single Audit Act. Those standards andOMB Circular A 133 and the Florida Single Audit Act require that we plan and perform the audit toobtain reasonable assurance about whether noncompliance with the types of compliancerequirements referred to above that could have a direct and material effect on a major federalprogram and major state project occurred. An audit includes examining, on a test basis, evidenceabout the County’s compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each majorfederal program and each major state project. However, our audit does not provide a legaldetermination of the County’s compliance.
160
Opinion on Each Major Federal Program and Each Major State Project
In our opinion, the County, complied, in all material respects, with the types of compliancerequirements referred to above that could have a direct and material effect on each of its majorfederal programs and major state projects for the year ended September 30, 2015.
Report on Internal Control Over Compliance
Management of the County is responsible for establishing and maintaining effective internal controlover compliance with the types of compliance requirements referred to above. In planning andperforming our audit of compliance, we considered the County’s internal control over compliancewith the types of requirements that could have a direct and material effect on each major federalprogram and each major state project to determine the auditing procedures that are appropriate inthe circumstances for the purpose of expressing an opinion on compliance for each major federalprogram and each major state project and to test and report on internal control over compliance inaccordance with OMB Circular A 133; Chapter 10.550, Rules of the Auditor General; and the FloridaSingle Audit Act, but not for the purpose of expressing an opinion on the effectiveness of internalcontrol over compliance. Accordingly, we do not express an opinion on the effectiveness of theCounty’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a controlover compliance does not allow management or employees, in the normal course of performingtheir assigned functions, to prevent, or detect and correct, noncompliance with a type ofcompliance requirement of a federal program or state project on a timely basis. A materialweakness in internal control over compliance is a deficiency, or combination of deficiencies, ininternal control over compliance, such that there is a reasonable possibility that materialnoncompliance with a type of compliance requirement of a federal program or state project will notbe prevented, or detected and corrected, on a timely basis. A significant deficiency in internalcontrol over compliance is a deficiency, or a combination of deficiencies, in internal control overcompliance with a type of compliance requirement of a federal program or state project that is lesssevere than a material weakness in internal control over compliance, yet important enough to meritattention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in thefirst paragraph of this section and was not designed to identify all deficiencies in internal controlover compliance that might be material weaknesses or significant deficiencies. We did not identifyany deficiencies in internal control over compliance that we consider to be material weaknesses.However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of ourtesting of internal control over compliance and the results of that testing based on therequirements of OMB Circular A 133; Chapter 10.550, Rules of the Auditor General; and the FloridaSingle Audit Act. Accordingly, this report is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.Certified Public AccountantsJune 24, 2016
Walton County, FloridaSchedule of Expenditures of Federal Awards
and State Financial AssistanceFor the Year Ended September 30, 2015
161
Federal/State AgencyPass Through Entity
Federal Program/State Project
CFDACSFA
Number Grant I.D. Number Expenditures
Direct ProgramLow Income Housing –Section 8, Choice Vouchers 14.871 FL110 1,873,939$Family Self Sufficiency Program 14.877 2014 FSS 4HPH FL110 28,374
Department total 1,902,313
Child Support Enforcement 93.563 CST66 5,412Child Support EnforcementTitle IV D 93.563 COC66 124,520
Pass through Florida Department of StateVoting Access for Individuals with Disabilities 93.617 2014 2015 0003 WAL 2,729
Department total 132,661
Direct ProgramDOJ – Byrne Grant 16.738 2014 DJ BX 0040 11,966DOJ – Byrne Grant 16.738 2015 DJ BX 0018 11,169
Crime Victims Assistance 16.575 V056 14130 53,000Pass through Florida Department of Law EnforcementByrne State & Local Law EnforcementDOC JAGC 16.738 2015 JAGC WALT 2 R3 149 32,664Bullet Proof Vest Program 16.607 2014 BUBX 17,312
Department total 126,111
Election Assistance CommissionPass through Florida Department of StateFederal Election Activities 90.401 2014 2015 001 WAL 9,645
U.S. Department of Transportation (Federal Highway Administration)Pass through Florida Department of TransportationHighway Planning and Construction 20.205 AR134 428873 6 58 018/
438873 6 G8 01 370,567Highway Planning and Construction 20.205 ARL46 436247 1 G8 01 5,433Highway Planning and Construction 20.205 ARL47 436250 1 G8 01 93,192
Department total 469,192
U.S. Department of Justice
Pass through Florida Office of the Attorney General
U.S Department of Housing and Urban Development
Pass through Florida Department of RevenueU.S. Department of Health and Human Services
Continued
Walton County, FloridaSchedule of Expenditures of Federal Awardsand State Financial Assistance – Continued
For the Year Ended September 30, 2015
162
Federal/State AgencyPass Through Entity
Federal Program/State Project
CFDACSFA
Number Grant I.D. Number Expenditures
U.S. Department of Homeland SecurityPass through Florida Department of Emergency ManagementDisaster Grants Public Assistance 97.036 14 FS 8Q 01 76 02 500 2,687,093Disaster Grants Public Assistance 97.036 15 SP 8Z 01 76 02 500 303,992Disaster Grants Public Assistance 97.036 15 SP 8Z 01 76 15 547 5,175Emergency Management Performance 97.042 15 FG 4D 01 76 01 133 55,865Emergency Management Performance 97.042 16 FG 5A 01 76 01 133 13,214Homeland Security Grant Program 97.067 15 DS P4 01 76 01 457 2,876Homeland Security Grant Program 97.067 14 DS L5 01 76 01 479 13,292
Department total 3,081,507
5,721,429$
Disaster Relief DR 4138 July 2013 Storms 52.600308 14 FS 8Q 01 76 02 500 447,285$Disater Relief DR 4177April 2014 Storms 52.600308 15 SP 8Z 01 76 02 500 50,665Emergency Management Preparedness 31.063 15 BG 83 01 76 01 066 75,055Emergency Management Preparedness 31.063 16 BG 83 01 76 01 066 26,709Hazardous Materials Planning & Prevention 52.023 13CP 11 01 76 23 175 790Hazardous Materials Planning & Prevention 52.023 14CP 11 01 76 23 197 4,764Hazardous Materials Planning & Prevention 52.023 15CP 11 01 76 23 185 4,852Hazardous Materials Planning & Prevention 52.023 16CP 11 01 76 00 000 4,796
Department total 614,916
Mossy Head Commerce Park Improvements 40.038 HL021 3,000,000
Florida Department of AgricultureArthropod Control Mosquito State Aid 42.003 21302 25,691
Florida Housing Finance AgencySHIP Program regular 52.901 N/A 503,529
Total Expenditures of Federal Awards
Florida Division of EmergencyManagement
Florida Department of Economic Opportunity
Beach Management Funding Program 37.003 14WL1 33,961Small County Solid Waste 37.012 532SC 78,724Statewide Surface Water Restoration&Wastewater Projects 37.039 S0783 97,042
Statewide Surface Water Restoration&Wastewater Projects 37.039 LP66021 3,301,460
Department total 3,511,187
Florida Department of Environmental Protection
Continued
Walton County, FloridaSchedule of Expenditures of Federal Awardsand State Financial Assistance – Continued
For the Year Ended September 30, 2015
163
Federal/State AgencyPass Through Entity
Federal Program/State Project
CFDACSFA
Number Grant I.D. Number Expenditures
Florida Department of State
Aid to Libraries 45.030 14 ST 93 3,221Aid to Libraries 45.030 15 ST 93 15,636
Department total 18,857
Florida Department of HealthEMS County Grant 64.005 C3066 4,275
Florida Department of TransportationCounty Incentive Grant Program 55.008 AR438 4312411 58 01 1,553,042Small County Outreach Programs 55.009 AQR57 4256891 58 01 1,715,483Small County Outreach Programs 55.009 ARK14 43335415801 142,058Small County Outreach Programs 55.009 ARK18 43139715801 103,341Small County Outreach Programs 55.009 ARO14 43139615801 57,470Small County Road Assistance Program 55.016 AQR62 4280452 58 01 3,219,466Small County Road Assistance Program 55.016 ARK04 42570815801 134,333State Highway Project Reimbursement 55.023 409797 2 88 01 129,853
Department total 7,055,046
Drug Control/Money LaunderingInvestigations 71.005 PE 18 0123 6,676
Wireless 911 Emergency SystemTelephone Grants:E911 State Grant Program 72.001 14 4 26 51,475E911 State Grant Program 72.001 15 4 25 56,555
Department total 108,030
Florida Boating Improvement Program 77.006 13496 112,500
14,960,707$
Florida Department of Law Enforcement
Florida Department of Management Services
Total Expenditures of State Financial Assistance
Division of Library and Information Services
Florida Fish andWildlife Conservation Commission
Walton County, FloridaNotes to Schedule of Expenditures of Federal Awards
and State Financial AssistanceFor the Year Ended September 30, 2015
164
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies and presentation of the Single Audit Report of Walton County, Florida (the“County”) have been designed to conform to generally accepted accounting principles as applicableto governmental units, including the reporting and compliance requirements of the Audits of States,Local Governments, and Non Profit Organizations and Office of Management and Budget Circular A133, Compliance Supplement (A 133).
Reporting Entity – The reporting entity consists of Walton County, the primary government and itscomponent unit. The County included schedules of both federal and state financial assistance inthe Single Audit section. Financial assistance received directly from the State of Florida is includedto satisfy the audit requirements of the State of Florida grantor agencies.
Basis of Accounting – Basis of accounting refers to when revenues and expenditures or expensesare recognized in the accounts and reported in the financial statements. Basis of accounting relatesto the timing of the measurements made, regardless of the measurement focus applied.
The modified accrual basis of accounting is followed in the schedule of federal awards and statefinancial assistance. Under the modified accrual basis of accounting, revenues are recognized in theaccounting period in which they become both measurable and available to finance expenditures ofthe current period. Available means collectible within the current period or soon enough thereafterto be used to pay liabilities of the current period. Expenditures are recorded when the relatedliability is incurred. In applying the susceptible to accrual concept to intergovernmental revenues,the legal and contractual requirements of the numerous individual programs are used as guidance.There are, however, essentially two types of such revenues. In one, monies must be expended onthe specific purpose or project before any amounts will be paid to the County; therefore, revenuesare recognized based upon the expenditures recorded. In the other, monies are virtuallyrecognized based upon the expenditures recorded and are virtually unrestricted as to purpose ofexpenditure and substantially irrevocable; i.e., revocable only for failure to comply with prescribedcompliance requirements, such as with equal employment opportunity. These resources arereflected as revenues at the time of receipt or earlier if they meet the availability criteria.
NOTE 2 – RELATIONSHIP TO THE SCHEDULE TO PROGRAM FINANCIAL REPORTS
The amounts reflected in the financial reports submitted to the awarding federal, state and/or passthrough agencies and the schedule may differ. Some of the factors that may account for anydifferences include the following:
The County’s fiscal year end may differ from the program’s year end.Accruals recognized in the schedule, because of year end procedures, may not be reportedin the program financial reports until the next program reporting period.Capital asset purchases and the resultant depreciation charges are recognized as propertyand equipment, net in the County’s financial statements and as expenditures in the programfinancial reports.
Walton County, FloridaNotes to Schedule of Expenditures of Federal Awards
and State Financial AssistanceFor the Year Ended September 30, 2015
165
NOTE 3 – FEDERAL PASS THROUGH FUNDS
The County is also a sub recipient of federal funds that have been subjected to testing and arereported as expenditures and listed as federal pass through funds. Federal awards other than thoseindicated as pass through are considered to be direct.
NOTE 4 – CONTINGENCIES
Grant monies received and disbursed by the County are for specific purposes and are subject toreview by the grantor agencies. Such audits may result in requests for reimbursement due todisallowed expenditures. Based upon prior experience, the County does not believe that suchdisallowance, if any, would have a material effect on the financial position of the County. As of June24, 2016 there were no material questioned or disallowed costs as a result of grant audits inprocess or completed.
NOTE 5 – NONCASH ASSISTANCE
The County did not receive any federal noncash assistance for the fiscal year ending September 30,2015.
Walton County, FloridaSchedule of Findings and Questioned Costs
For the Year Ended September 30, 2015
166
Section I – Summary of Auditors’ Results
Financial StatementsType of auditors’ report issued: UnmodifiedInternal control over financial reporting:
Material weakness(es) identified? X yes no
Significant deficiency(ies) identified? X yes none reported
Noncompliance material to financial statements noted? yes X no
Federal AwardsInternal control over major programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified? yes X none reported
State AwardsInternal control over major programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified? yes X none reported
Type of auditors’ report issued on compliance for major Federal programs: UnmodifiedType of auditors’ report issued on compliance for major State projects: Unmodified
Any audit findings disclosed that are required to be reportedin accordance with section 510(a) of Circular A 133? yes X no
Identification of major programs:
CFDA/CSFA Number(s) Name of Federal Program/State ProjectFederal Programs
14.871 Low Income Housing, Section 8, Choice Vouchers
State Projects37.039 Statewide Surface Water Restoration and Wastewater40.038 Division of Community Development Grant Program52.600308 Public Disaster Grant52.901 State Housing Initiative Program55.008 County Incentive Grant Program55.009 Small County Outreach Program55.016 Small County Road Assistance Program
Dollar threshold used to distinguish between type A andtype B programs/projects?
Federal Programs$ 300,000
State Projects$ 448,821
Auditee qualified as low risk auditee? X yes no
Walton County, FloridaSchedule of Findings and Questioned Costs
For the Year Ended September 30, 2015
167
Section II – Financial Statement Findings
2015 01 Planning and Development Services (Planning) – Controls over Fee Assessment,Billing and Collections
Criteria – The Walton County Land Development Code (LDC) requires the assessment andcollection of certain fees associated with commercial and residential developments. Theprimary fees established in the LDC include proportionate fair share, preservation buyout,sidewalk buyout, and recreation plat.
The proportionate fair share fee, which is calculated by an independent engineering firm andprovided to Planning, is based primarily on additional vehicle traffic deemed to have beencaused by the assessed development and the cost of future infrastructure required to supportthe increase in traffic. The fee for commercial developments is due before issuance of theBuilding Department’s Certificate of Occupancy (C.O.), and prior to recording the plat forresidential developments.
Preservation buyout fee allows a developer to pay a fee to remove up to fifty percent (50%)of the natural vegetation that would otherwise be preserved. The preservation buyout fee issix percent (6%) of the assessed land value taken from the most recent certified tax roll at thetime of issuance of the development order and due at the time of issuance of thedevelopment order.
Sidewalk buyout fee allows a residential developer to compensate the County for theestimated cost of sidewalk construction (buyout) rather than construct sidewalks. Sidewalkbuyout fee is based on a linear cost established by the County engineer based on FloridaDepartment of Transportation published construction costs. The sidewalk buyout fee iscollected prior to recording the plat.
Recreation plat fee is assessed on a development unless the developer sets aside five percent(5%) of the project’s property for recreation. The recreation plat fee is six percent (6%) basedon assessed land value taken from the most recent certified tax roll at the time of platting andis due prior to recording the plat.
Finding – The Planning and Development Services Division (Planning) does not havedocumented policies and procedures to help ensure that the above noted fees associatedwith commercial and residential development are properly and consistently assessed, billedand collected. As a matter of public record, in years prior to 2015, Planning has had issueswith the proper assessment, billing and collection of fees required by the LDC.
The County’s internal auditor referenced an ongoing internal audit of the PlanningDepartment for the years 2005 – 2014 that discloses numerous instances of incorrect billingsprior to 2015. This report has not been released as of the date of this finding.
Walton County, FloridaSchedule of Findings and Questioned Costs
For the Year Ended September 30, 2015
168
A Grand Jury investigation completed in 2015 also disclosed instances of incorrect billings inMay 2005 and December 2006. Errors noted in the Grand Jury investigation and internalaudit included basic miscalculation of mathematical formulas as well as fees based onincorrect development land use valuation dates or amounts.
In fiscal year 2015 our tests of the Department’s assessment and billing procedures did notdisclose any misstatements.
Effect – The lack of well documented and executed policies and procedures over the properassessment, billing and collection of fees could and has in prior years resulted inmisstatements and lost revenue to the County. Further the lack of adequate safeguards couldresult in over or under billing of developers.
Recommendation – We recommend Planning document and systematically review andmonitor its policies and procedures to ensure fees mandated by the LDC are properlyassessed, billed and collected. Policies and procedures should at a minimum address thefollowing:
Delineation of the process from initial application to collection of each fee,
Detailed explanation of how each fee is to be calculated to include rate to beassessed, source and date of land valuations as well as all other informationnecessary to calculate the fee,
Responsible party(ies) for calculating the fee(s) and how documented,
The responsible party(ies) for reviewing and approving the calculated fee(s) and howdocumented,
Process for ensuring that applicable fee(s) are collected prior to issuance ofDevelopment Order, Certificate of Occupancy, platting, etc.,
Process for receipting and recording all fees collected, and
Checks and balances throughout the assessment, billing and collection cycle bothwithin the department and as required of other stakeholders.
View of Responsible Officials – See Management’s Response and Corrective Action Plan onpages 181 182.
2015 02 Emergency Medical Services (EMS) Billing and Receivables
Criteria – Government Auditing Standards (GAS) Section A1.08 (d) states that management isresponsible for “establishing and maintaining effective internal control to help ensure that
Walton County, FloridaSchedule of Findings and Questioned Costs
For the Year Ended September 30, 2015
169
appropriate goals and objectives are met; following laws and regulation; and ensuring thatmanagement and financial information is reliable and properly reported;…”.
Finding – The County provides EMS services to the citizens and visitors of Walton County inexchange for service fees established by County ordinance 2013 81. Service fees are billed onbehalf of the County by a third party service provider. At September 30, 2015, the Countyhad EMS accounts receivable outstanding of $3,340,390. An aging report by service dateprovided by the billing service is as follows:
Aging by Days AmountUnder 30 $ 219,61931 60 142,66761 90 131,18091 120 106,095121 150 73,707Over 150 2,667,122Total $ 3,340,390
EMS revenue has averaged $1,264,816 in collections over the past three fiscal. The Countyhas no formal collections or adjustment policy related to delinquent EMS billings and has nodocumented processes in place to monitor or review EMS billings issued by its third partyservice provider.
From a population of 8,821 EMS runs in 2015, a sample of 60 was tested for: (1) the existenceof a supporting incident report; (2) an invoice for services billed in accordance with Boardapproved rates per Ordinance 2013 81; and (3) collection of amounts billed after adjustmentsfor contractual allowances.
Results of those tests disclosed the following:
18 runs were over billed totaling $1,0504 runs were under billed totaling $202Billed invoices for 8 runs could not be provided for testing
Effect – The lack of review procedures over EMS billings could result in misstatements notbeing timely detected or possibly undetected and the loss of revenue to the County. Further,having no formal documented process for addressing uncollected accounts could result inreceivables either being collected untimely or uncollected. For financial reporting purposesthe County does not record EMS fees until collected.
Recommendation – As required by GAS, internal controls should be implemented over thebilling of EMS services and the resolution of delinquent accounts receivable to help ensurethat the County is compensated in accordance with County Ordinance 2013 81. Furthermore,we recommend the County request its third party service provider obtain a ServiceOrganization Controls (SOC) Report. SOC reports are internal control reports on the services
Walton County, FloridaSchedule of Findings and Questioned Costs
For the Year Ended September 30, 2015
170
provided by a service organization that would provide valuable information to the County toevaluate as well as assess and address the risks associated with it current service organization.
The Committee on Sponsoring Organizations of the Treadway Commission (COSO) InternalControl – Integrated Framework (2013), provides guidance that could be used to establishstandards for developing and monitoring a system of internal controls over EMS billing.
View of Responsible Officials – See Management’s Response and Corrective Action Plan onpages 181 182.
Section III – Federal Award Findings and Questioned Costs
No such findings or questioned costs in the current year.
Section IV – Major State Projects Findings and Questioned Costs
The audit did not disclose any audit findings required to be reported pursuant to Section10.557, Rules of the Auditor General. (Section 10.554(1)(I)1.f, Rules of the Auditor General)
Walton County, FloridaSummary Schedule of Prior Audit Findings for Federal Awards
For the Year Ended September 30, 2015
171
No such items were reported in prior year.
Walton County, FloridaSummary Schedule of Prior Audit Findings for
State Financial AssistanceFor the Year Ended September 30, 2015
172
No such items were reported in prior year.
Walton County, FloridaSchedule of Receipts and Expenditures of
Funds Related to the Deepwater Horizon Oil SpillFor the Year Ended September 30, 2015
173
(Restated)Amount Amount Amount AmountReceived Expended Received Expendedin the in the in the in the
2013 2014 2013 2014 2014 2015 2014 2015Source Fiscal Year Fiscal Year Fiscal Year Fiscal Year
British Petroleum:Lost Tax Revenue Claim Final SettlementBoard of County Commissioners 4,500,000$ 1,909,860$ $ $
British Petroleum:Lost Tax Revenue Claim Final SettlementTourist Development Council 5,370,000 1,089,016
Note: The amount reported as expenditures in the 2013 2014 fiscal year for theWaltonCounty Board of County Commissioners has been restated in the amount of $221,421.The previously reported amount of $2,131,281 incorrectly included legal expendituresthat were not part of the BP expenditures.
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INDEPENDENT ACCOUNTANTS’ REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL ANDSECTION 218.415, FLORIDA STATUTES
Honorable Board of County CommissionersWalton County, Florida
We have examined Walton County, Florida’s (the County) compliance with the requirements ofSections 218.415, Florida Statutes, Government Investment Policies, respectively, during the yearended September 30, 2015. Management is responsible for the County’s compliance with thoserequirements. Our responsibility is to express an opinion on the County’s compliance based on ourexamination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the County’s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our examinationprovides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the County’s compliance with specified requirements.
In our opinion, the County complied, in all material respects, with the aforementionedrequirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 24, 2016
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INDEPENDENT ACCOUNTANTS’ REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL ANDSECTIONS 365.172(10) AND 365.173(2)(d), FLORIDA STATUTES
Honorable Board of County CommissionersWalton County, Florida
We have examined Walton County, Florida’s (the County) compliance with the requirements ofSection 365.172(10), Florida Statutes, Authorized Expenditures of E911 Fee, and Section365.173(2)(d), Florida Statutes, Distribution and Use of (E911) Funds, during the year endedSeptember 30, 2015. Management is responsible for the County’s compliance with thoserequirements. Our responsibility is to express an opinion on the County’s compliance based on ourexamination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants and, accordingly, included examining, on a testbasis, evidence about the County’s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our examinationprovides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the County’s compliance with specified requirements.
In our opinion, the County complied, in all material respects, with the aforementionedrequirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 24, 2016
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MANAGEMENT LETTER
Honorable Board of County CommissionersWalton County, Florida
Report on the Financial Statements
We have audited the financial statements of Walton County, Florida (the County) as of and for thefiscal year ended September 30, 2015 and have issued our report thereon dated June 24, 2016.
Auditors’ Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; OMB Circular A 133, Audits ofStates, Local Governments, and Non Profit Organizations; and Chapter 10.550, Rules of the AuditorGeneral.
Other Reports and Schedule
We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting andOn Compliance and Other Matters Based on an Audit of Financial Statements Performed inAccordance with Government Auditing Standards; Independent Auditors’ Report on Compliance forEach Major Federal Program and Each Major State Project and on Internal Control over Compliance;Schedule of Findings and Questioned Costs; and Independent Accountants’ Reports on anexamination conducted in accordance with AICPA Professional Standards, Section 601, regardingcompliance requirements in accordance with Chapter 10.550, Rules of the Auditor General.Disclosures in those reports and schedule, which are dated June 24, 2016 should be considered inconjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in thepreceding annual financial audit report. Corrective actions have been taken to address findings andrecommendations made in the preceding annual financial audit report.
Official Title and Legal Authority
Section 10.554(1)(i)4, Rules of the Auditor General, requires that the name or official title and legalauthority for the primary government and each component unit of the reporting entity be disclosedin this management letter, unless disclosed in the notes to the financial statements. Thisinformation is disclosed in Note 1 to the financial statements.
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Financial Condition
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we applyappropriate procedures and report the results of our determination as to whether or not WaltonCounty, Florida has met one or more of the conditions described in Section 218.503(1), FloridaStatutes, and identification of the specific condition(s) met. In connection with our audit, wedetermined that Walton County, Florida did not meet any of the conditions described in Section218.503(1), Florida Statutes.
Pursuant to sections 10.554(1)(i)5..c. and 10.556(8), Rules of the Auditor General, we appliedfinancial condition assessment procedures. It is management’s responsibility to monitor theWalton County, Florida’s financial condition, and our financial condition assessment was based inpart on representations made by management and the review of financial information provided bysame.
Annual Financial Report
Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, requires that we applyappropriate procedures and report the results of our determination as to whether the annualfinancial report for Walton County, Florida for the fiscal year ended September 30, 2015, filed withthe Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is inagreement with the annual financial audit report for the fiscal year ended September 30, 2015. Inconnection with our audit, we determined that these two reports were in agreement.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, wemake the following recommendations.
2015 03 Information Technology (IT) Disaster Recovery and Business Continuity
Formalized Back up Policy
An effective backup policy helps manage users' expectations and provides specific guidanceon the "who, what, when, and how" of the data back up and restore process.
Finding – The County’s current back up policy includes some outdated procedures including:
The backup solution noted in the policy is Symantec Backup Exec, however the currentsolution used is EVaultThe policy does not address EVault replication procedures
Recommendation Management should update the data back up policy at least annually toensure the availability, efficiency and effectiveness of financial data back ups and that currentprocedures are adequately reflected in the policy.
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Back up Encryption
All back ups of financial data should be encrypted according to a set encryption standard.This prevents an unauthorized individual with access from reading the data.
Finding Currently, unencrypted back ups are transported off site by IT personnel and storedin a secure facility.
Recommendation – We recommend management consider encrypting all data back ups usingencryption software such as IBM Backup Recovery and Media Services.
2015 04 Information Technology – Access to the NaviLine Financial Systems and Data(NaviLine)
Password and Lockout Requirements
Passwords are the first line of defense against users with malicious intent. Strict password andlockout parameters should be in place to better protect against unauthorized access.
Finding The NaviLine password policy requires only 5 characters and complexity is notenabled.
Recommendation Management should consider implementing a stricter password policyrequiring at least 6 characters. Further, complexity should be enabled requiring at least onespecial number.
Users with Administrative Access
IT personnel with access to financial data should be limited to enforce proper segregation ofduties.
Finding Currently, IT personnel have full administrative access to NaviLine.
Recommendation Management should consider granting administrative access to thesesystems to non IT personnel and revoking that of IT personnel. If this is not feasible, adocumented review of NaviLine access, Active Directory access, and system activity should beperformed periodically by management.
User Access Review
All users with access privileges should be systematically updated and review by theappropriate level of management.
Finding A review of user access is not regularly conducted of Active Directory or NaviLine.
Recommendation Management should consider a review of access in all areas of thefinancial applications and disable employee access to all systems upon termination.
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2015 05 Information Technology – Logical and Physical Security
Access to Systems and Data
All users should have unique access to ensure proper audit logging.
Finding Currently, the IT department shares a Domain Administrator account.
Recommendation We recommend that each user requiring administrative privileges beassigned a unique login.
User Access Controls
User access controls for addition, modification, and deletion should be documented toevaluate proper approvals were obtained and removals occurred in a timely manner.
Finding The County has no formalized procedure in place for granting and revoking access toActive Directory and NaviLine.
Recommendation – We recommend the County establish procedures for granting andrevoking user access for the network and financial applications.
2015 06 Road & Bridge Tax Distributions to the City of Defuniak Springs, Florida
Florida Statute §336.59 Levy of tax for road and bridge purposes; portion to municipalitiessection (2) states “One half the amount realized from such special tax on the property inincorporated cities and towns shall be turned over to such cities …”
Finding – During fiscal year 2015 the County made distributions to the City of DefuniakSprings, Florida of approximately $26,034 of the County’s fiscal year 2015 “Road & Bridge” advalorem tax collections. Though Florida Statute §336.59 section 2 authorizing the remittancesto the City was repealed in 1984 the County continued to make the distributions asauthorized by the Statute through fiscal year 2015. Public records indicated that the Countyhad been distributing a portion of the Road and Bridge tax to the City since 1916. As of thedate of this report the distributions have not been recovered from the City.
Per inquiry and observation, it was determined that for FY 2013 and 2014 the tax roll recapand distribution reports disclosing the distributions to the City was provided to the Board ofCounty Commissioners (“the Board”) by the Tax Collector. However, the recap anddistribution report for fiscal year 2015 was not submitted to the Board.
The Tax Collector stated that for fiscal year 2016 there have been no subsequent distributionsof Road and Bridge taxes to the City.
Recommendation The Board should obtain the tax roll recap and distribution report fromthe Tax Collector annually and as a minimum validate that only those taxing authorities withstatutory or Board authorization receive distributions of ad valorem tax receipts.
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Section 10.554(1(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less than material but whichwarrants the attention of those charged with governance. In connection with our audit, we did nothave any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies and applicable management, and is notintended to be and should not be used by anyone other than these specified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 24, 2016
WALTON COUNTY, FLORIDABoard of County Commissioners
William “Bill” Chapman, District 1 P.O. Box 1355Cecilia Jones, District 2, Vice Chair DeFuniak Springs, FL 32435Bill Imfeld, District 3 Phone: (850) 892 8155Sara Comander, District 4, Chair Fax: (850) 892 8454Cindy Meadows, District 5 www.co.walton.fl.us
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Sherrill F. Norman, CPAState of Florida Auditor General’s OfficeLocal Governments Audits/342Claude Pepper Building, Room 401111 West Madison StreetTallahassee, FL 32399 1450
Dear Ms. Norman:
I have reviewed the schedule of findings and questioned costs and management letter from Carr,Riggs & Ingram, LLC relating to the 2014 2015 Walton County financial statement audit. I concurwith their findings and the following is the management response and corrective action plan relatedto the findings:
2015 01 The Planning Director has instituted the following changes to insure that there aresufficient controls over Fee Assessment, Billing and Collections:
1. Peer review process. All Development Order (D.O.) applications are reviewedthrough a peer or "team" review process, whereby all D.O.'s have a project manager whobrings projects to the peer review meeting. This peer review meeting is attended by allPlanners and review staff. Each project is reviewed by the group by utilizing a reviewchecklist. All requirements are reviewed and checked off including preservation areas andacreages which impact buy out provisions.
2. D.O. contains fee sign off. All D.O.'s contain fee sign off area for all fees. ThePlanning Assistant and project manager review the fees required and verifies payment. Ifall payments have not been made the D.O. is not signed by the County and is not issued.If all fees are paid, the Planning Assistant signs that all fees have been paid, the projectmanager then signs the D.O. and the Director signs last before D.O. issuance.
3. Recreation plat fees. The basis of the recreation plat fees are property values asdetermined by the Property Appraiser. All fees are also reviewed by the Finance Director.All calculations are provided in the form of a memo as part of the D.O. approval whichmust be approved by the BCC. Fees are paid before recording with the Clerk’s Office.
The Planning Department is preparing all the above procedures and other necessaryprocedures in one procedures manual where every procedure will be documented.
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2015 02 Walton County contracted with a third party vendor in December 2015 for the collection ofoutstanding debts owed to the County, including unpaid EMS billing fees. Collectionprocedures are detailed within the contractual scope of services.
Walton County will establish a formal process for review of EMS billings issued by theCounty’s third party service provider to ensure the County is compensated in accordancewith Resolution 2013 81. The County’s third party service provider for EMS billings hasalso implemented a new reporting system to allow better tracking of claims.
The County’s third party service provider for EMS billings is obtaining a ServiceOrganization Controls (SOC) audit and anticipates the audit will be complete by the end of2016.
2015 03 Walton County will acquire encryption software and begin encrypting financial systemsoftware backups.
Walton County will review and update backup policy as recommended.
2015 04 Walton County will increase NaviLine password complexity requirements to eightcharacters and require at least one number.
Walton County department heads will review AS400 and Active Directory accessbiannually.
Walton County department heads will review NaviLine user access on a biannual basis andnotify the IT Department of any changes to be made. Human Resources will notify the ITDepartment of all terminations and user access will be disabled.
2015 05 Walton County will create individual administrative accounts in Active Directory for eachmember of the IT Department.
Walton County will establish a documented procedure for granting and revoking useraccess in Active Directory and NaviLine.
2015 06 Walton County will obtain the annual tax roll recap and distribution report from the TaxCollector and validate that only those taxing authorities with statutory or Boardauthorization receive distributions of ad valorem tax receipts.
Larry D. JonesCounty Administrator
FFINANCIAL STATEMENTS AND COMPLIANCE REPORTS FOR CONSTITUTIONAL OFFICERS
CLERK OF CIRCUIT COURT AND COUNTY COMPTROLLER
PROPERTY APPRAISER
TAX COLLECTOR
SUPERVISOR OF ELECTIONS
SHERIFF
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Clerk of the Circuit CourtWalton County, Florida
______________________
Special Purpose Financial Statements
For The Year Ended September 30, 2015
Walton County, FloridaClerk of the Circuit Court
Table of ContentsSeptember 30, 2015
184
Page
INDEPENDENT AUDITORS’ REPORT 186 – 188
SPECIAL PURPOSE FINANCIAL STATEMENTS
Special Purpose Balance Sheet – Governmental Funds 189
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Governmental Funds 190
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Budget and Actual – General Fund 191
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Budget and Actual – Fine and Forfeiture Fund 192
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Budget and Actual – Court Technology Fund 193
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Budget and Actual – Title IV d 194
Special Purpose Statement of Net Position Proprietary Fund – GovernmentalActivities, Internal Service Fund 195
Special Purpose Statement of Revenues, Expenses and Changes in Net PositionProprietary Fund – Governmental Activities, Internal Service Fund 196
Special Purpose Statement of Cash Flows Proprietary Fund – GovernmentalActivities, Internal Service Fund 197
Special Purpose Statement of Fiduciary Net Position – Agency Funds 198
Notes to Special Purpose Financial Statements 199 211
COMBINING AND INDIVIDUAL FUND STATEMENTS
Description of Fiduciary Funds 212
Combining Special Purpose Statement of Fiduciary Net Position – Agency Funds 213
Combining Special Purpose Statement of Changes in Assets and Liabilities –Agency Funds 214 – 215
Continued
Walton County, FloridaClerk of the Circuit Court
Table of Contents (Continued)September 30, 2015
185
COMPLIANCE SECTION
Independent Auditors’ Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Special PurposeFinancial Statements Performed in Accordance with Government AuditingStandards 216 – 217
Independent Accountant’s Report on an Examination Conducted in Accordancewith AICPA Professional Standards, Section 601, Regarding ComplianceRequirements in Accordance with Chapter 10.550, Rules of the Auditor General 218
MANAGEMENT LETTER 219 – 220
186
INDEPENDENT AUDITORS' REPORT
Honorable Alex AlfordClerk of the Circuit CourtWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the accompanying special purpose financial statements of each major fund, theproprietary and fiduciary fund types, and the remaining nonmajor governmental funds of theWalton County, Florida Clerk of the Circuit Court (the “Clerk”), as of and for the fiscal year endedSeptember 30, 2015, and the related notes to the special purpose financial statements, whichcollectively comprise the Clerk’s special purpose financial statements, as listed in the table ofcontents.
Management’s Responsibility for the Special Purpose Financial Statements
Management is responsible for the preparation and fair presentation of these special purposefinancial statements in accordance with accounting principles generally accepted in the UnitedStates of America; this includes the design, implementation, and maintenance of internal controlrelevant to the preparation and fair presentation of special purpose financial statements that arefree from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these special purpose financial statements based onour audit. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thespecial purpose financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose financial statements. The procedures selected depend on theauditors’ judgment, including the assessment of the risks of material misstatement of the specialpurpose financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of thespecial purpose financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the specialpurpose financial statements.
187
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
Opinions
In our opinion, the special purpose financial statements referred to above present fairly, in allmaterial respects, the respective financial position of each major fund, proprietary and fiduciaryfund types, and the remaining nonmajor funds, for the Clerk as of September 30, 2015, and therespective changes in financial position and the budgetary comparison for the General Fund, Fineand Forfeiture Fund, Court Technology Fund, Court Fines Fund, and Title IV d Fund thereof for thefiscal year then ended in accordance with accounting principles generally accepted in the UnitedStates of America.
Emphasis of Matter
As discussed in Note 1 to the special purpose financial statements, the special purpose financialstatements referred to above were prepared solely for the purpose of complying with the Rules ofthe Auditor General of the State of Florida. In conformity with the Rules, the accompanying specialpurpose financial statements are intended to present the financial position and changes in financialposition of each major fund, the proprietary and fiduciary fund types, and the remaining nonmajorfund information, only for that portion of the major funds, the proprietary and fiduciary fund types,and the remaining nonmajor fund information, of Walton County, Florida that is attributable to theClerk. They do not purport to, and do not, present fairly the financial position of Walton County,Florida as of September 30, 2015, and the changes in its financial position for the fiscal year thenended in conformity with accounting principles generally accepted in the United States of America.Our opinion is not modified with respect to these matters.
Other Matters
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the special purpose financialstatements that collectively comprise the Clerk’s financial statements. The combining andindividual fund statements, as listed in the table of contents, are presented for purposes ofadditional analysis and are not a required part of the special purpose financial statements and wedo not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report on ourconsideration of the Clerk's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, rules, regulations, contracts, and grant agreements andother matters included under the heading Independent Auditors’ Report On Internal Control OverFinancial Reporting And On Compliance and Other Matters Based On An Audit Of The FinancialStatements Performed In Accordance With Government Auditing Standards. The purpose of thatreport is to describe the scope of our testing of internal control over financial reporting and
188
compliance and the results of that testing, and not to provide an opinion on internal control overfinancial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the Clerk's internal control overfinancial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
Walton County, FloridaClerk of the Circuit Court
Special Purpose Balance Sheet – Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.
Fine andForfeiture
General Fund Fund
AssetsCash and cash equivalents 883,416$ 330,456$Due from other governments 526
Total assets 883,416$ 330,982$
Liabilities and Fund BalancesLiabilities
Accounts payable 612$ 165$Accrued expenses 116,618 179,920Due to other governments 150,897Due to Board of County Commissioners 766,186
Total liabilities 883,416 330,982
Fund balancesRestricted
Total liabilities and fund balances 883,416$ 330,982$
189
TotalCourt Record Governmental
Technology Title IV d Modernization Court Fines Funds
607,765$ 393,818$ 90,350$ 78,965$ 2,384,770$27,371 27,897
607,765$ 421,189$ 90,350$ 78,965$ 2,412,667$
$ $ 60$ $ 837$3,335 4,309 4,865 309,047
150,897766,186
3,335 4,309 60 4,865 1,226,967
604,430 416,880 90,290 74,100 1,185,700
607,765$ 421,189$ 90,350$ 78,965$ 2,412,667$
Nonmajor Funds
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balances – Governmental Funds
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.
Fine andForfeiture
General Fund Fund
RevenuesAppropriations from Board of CountyCommissioners 2,352,744$ $
Charges for services 1,465,434 1,023,203Fines and forfeitures 376,957Intergovernmental 171,430Investment earnings 1,962 858
Total revenues 3,820,140 1,572,448
ExpendituresGeneral governmentPersonnel services 2,406,458 1,426,615Operating 516,840 92,675Capital outlay 131,756
Total expenditures 3,055,054 1,519,290
Excess Revenues Over (Under) Expenditures 765,086 53,158
Other Financing UsesReversionBoard of County Commissioners (765,086)Clerk of Courts Trust Fund (53,158)
Total other financing uses (765,086) (53,158)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $ $
190
TotalCourt Record Governmental
Technology Title IV d Modernization Court Fines Funds
$ $ $ $ 2,352,744$231,882 76,888 2,797,407
59,401 436,358124,520 295,950
2,820
231,882 124,520 76,888 59,401 5,885,279
66,583 93,114 174,473 4,167,24344,159 283 87,898 14,420 756,275
56,814 188,570
110,742 93,397 87,898 245,707 5,112,088
121,140 31,123 (11,010) (186,306) 773,191
(765,086)(53,158)
(818,244)
121,140 31,123 (11,010) (186,306) (45,053)
483,290 385,757 101,300 260,406 1,230,753
604,430$ 416,880$ 90,290$ 74,100$ 1,185,700$
Nonmajor Funds
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, Expenditures and Changesin Fund Balances – Budget and Actual – General Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.191
Variance withFinal Budget
OriginalBudget Final Budget Actual
Positive(Negative)
RevenuesAppropriations from Boardof County Commissioners 2,352,744$ 2,352,744$ 2,352,744$ $
Charges for services 1,100,303 1,100,303 1,465,434 365,131Investment earnings (losses) 25 25 1,962 1,937
Total revenues 3,453,072 3,453,072 3,820,140 367,068
ExpendituresGeneral governmentPersonnel services 2,676,963 2,698,343 2,406,458 291,885Operating 698,659 618,883 516,839 102,044Capital outlay 77,450 135,846 131,756 4,090
Total expenditures 3,453,072 3,453,072 3,055,053 398,019
Excess Revenues OverExpenditures 765,087 765,087
Reversion to Boardof County Commissioners (765,086) (765,086)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $ $ $ $
Other Financing Sources (Uses)
Budgeted Amounts
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, Expenditures and Changesin Fund Balances – Budget and Actual – Fine and Forfeiture Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.192
Variance withFinal Budget
OriginalBudget Final Budget Actual
Positive(Negative)
RevenuesCharges for services 1,191,263$ 1,021,348$ 1,023,203$ 1,855$Fines and forfeitures 469,993 402,956 376,957 (25,999)Intergovernmental 171,430 171,430Investment earnings 1,200 1,200 858 (342)
Total revenues 1,662,456 1,596,934 1,572,448 (24,486)
ExpendituresGeneral governmentPersonnel services 1,566,807 1,500,071 1,426,615 73,456Operating 95,649 96,863 92,675 4,188
Total expenditures 1,662,456 1,596,934 1,519,290 77,644
Excess Revenues OverExpenditures 53,158 53,158
ReversionClerk of Courts Trust Fund (53,158) (53,158)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $ $ $ $
Other Financing Sources (Uses)
Budgeted Amounts
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, Expenditures and Changesin Fund Balances – Budget and Actual – Court Technology Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.193
Variance withFinal Budget
OriginalBudget Final Budget Actual
Positive(Negative)
RevenuesCharges for services 181,246$ 181,246$ 231,882$ 50,636$
ExpendituresGeneral governmentPersonnel services 66,525 66,723 66,583 140Operating 114,721 114,523 44,159 70,364
Total expenditures 181,246 181,246 110,742 70,504
Excess Revenues OverExpenditures 121,140 121,140
Fund Balance beginning 483,290 483,290 483,290
Fund Balance ending 483,290$ 483,290$ 604,430$ 121,140$
Budgeted Amounts
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, Expenditures and Changesin Fund Balances – Budget and Actual – Title IV d
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.194
Variance withFinal Budget
OriginalBudget Final Budget Actual
Positive(Negative)
RevenuesIntergovernmental 112,994$ 112,994$ 124,520$ 11,526$
ExpendituresGeneral governmentPersonnel services 112,994 112,710 93,114 19,596Operating 284 283 1
Total expenditures 112,994 112,994 93,397 19,597
Excess Revenues OverExpenditures 31,123 31,123
Fund Balance beginning 385,757 385,757 385,757
Fund Balance ending 385,757$ 385,757$ 416,880$ 31,123$
Budgeted Amounts
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Net Position – Proprietary FundSeptember 30, 2015
See accompanying notes to special purpose financial statements.195
GovernmentalActivities
Internal ServiceFund
AssetsCash and cash equivalents 649,470$
LiabilitiesCurrent liabilitiesAccrued compensated absences 100,937
Non current liabilitiesAccrued compensated absences 548,533
Total liabilities 649,470
Net Position $
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Revenues, ExpensesAnd Changes in Net Position – Proprietary Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.196
GovernmentalActivities
Internal ServiceFund
Operating RevenuesCharges for services 99,389$
Operating ExpensesPersonnel services 99,389
Change in net position
$Net Position ending
Net Position beginning
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Cash Flows –Proprietary Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.197
GovernmentalActivities
Internal ServiceFund
Cash Provided by (Used in) Operating ActivitiesFunding of compensated absences liability 99,389$Cash payments to employees for compensated absences (62,587)
Net increase in cash and cash equivalents 36,802
Cash and cash equivalents at the beginning of the year 612,668
Cash at the end of the year 649,470$
Reconciliation of Change in Net Position to Net CashUsed in Operating Activities
Change in net position $Increase in liabilitiesCompensated absences payable 36,802
36,802$Net Cash Provided by Operating Activities
Walton County, FloridaClerk of the Circuit Court
Special Purpose Statement of Fiduciary Net Position –Agency Funds
September 30, 2015
See accompanying notes to special purpose financial statements.198
Agency Funds
AssetsCash and cash equivalents 3,745,166$Receivables, net 1,813
Total assets 3,746,979$
LiabilitiesDue to other governments 752,108$Deposits 2,122,587Due to individuals 872,284
Total liabilities 3,746,979$
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The special purpose financial statements of the Walton County, Florida Clerk of the Circuit Court(the “Clerk”) have been prepared in accordance with the accounting principles and reportingguidelines established by the Governmental Accounting Standards Board (GASB), accountingprinciples generally accepted in the United States of America (GAAP), and accounting practicesprescribed by Chapter 10.550, Rules of the Auditor General, State of Florida. The more significantof these governmental accounting policies applicable to the Clerk are described below.
Reporting Entity
The Clerk is an elected official established pursuant to Article VIII Section 1(d) of the constitution ofthe State of Florida and serves the geographic boundary established in Florida Statutes Chapter7.66. The Clerk's special purpose financial statements do not purport to reflect the financialposition or the results of operations of Walton County, Florida (the “County”) taken as a whole.Pursuant to GASB Codifications of Governmental Accounting and Financial Reporting Standards,Sections 2100 and 2600, the Clerk's financial statements are combined with those of the Board ofCounty Commissioners (the “Board”) and other elected officials into the reporting entity of theCounty.
Although the Clerk’s office is operationally autonomous from the Board, it does not hold sufficientcorporate powers of its own to be considered a legally separate entity for financial reportingpurposes. Therefore, the Clerk’s financial statements are combined with those of the Board andother elected officials into the reporting entity of the County.
Basis of Presentation
As permitted by Chapter 10.556(4), Rules of the Auditor General State of Florida, the specialpurpose financial statements consist of only the fund level financial statements as defined in GASBCodification of Governmental Accounting and Financial Reporting Standards, Section 2200.102, anddo not include presentations of government wide financial statements of the Clerk.
In preparing these special purpose financial statements, the following are reported as majorgovernmental funds:
General Fund – The General Fund is used to account for all revenue and expendituresapplicable to the general operations of the Clerk that are not required either legally or bygenerally accepted accounting principles to be accounted for in another fund.
Fine and Forfeiture Fund – Special revenue fund established pursuant to Chapter 142.01(1) ofthe Florida Statutes to account for court related revenues and expenditures, which arerequired to be reported separately from the Clerk’s general fund activities.
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Court Technology – Special revenue fund that accounts for an additional service charge foreach recorded instrument reserved for the technology needs of the court system within theClerk’s office.
Title IV d – Special revenue fund that receives federal reimbursement for expenses related tothe Title IV d child support cases.
The following nonmajor governmental funds are reported:
Record Modernization – Special revenue fund that accounts for an additional service chargefor each recorded instrument. These funds are to be used exclusively for improvements to theofficial records system.
Court Fines – Special revenue fund that receives the ten percent portion of all court relatedfines collected by the Clerk to be used exclusively for additional clerk court related operationalneeds and program enhancements.
The Clerk also reported the following fund types:
Internal Service Fund – The internal service fund (a proprietary fund) is used to report fundedand accrued compensated absences.
Agency Fund – Agency funds are custodial in nature and account for assets held in a trustcapacity or as an agent for individuals, other governmental units and/or other funds. Agencyfunds only report assets and liabilities and do not measure results of operations. These fundsare accounted for on an accrual basis of accounting.
Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures are recognized in theaccounts and reported in the financial statements. It relates to the timing of the measurementsmade, regardless of the measurement focus applied.
All governmental fund financial statements are reported using a current financial resourcesmeasurement focus on a modified accrual basis of accounting. The major modifications to theaccrual basis are: (a) revenues are recorded in the accounting period in which they becomeavailable and measurable (available means collectible within the current period or soon enoughthereafter to be used to pay liabilities of the current period, considered to be sixty days for propertytaxes and ninety days for all other revenue) and (b) expenditures are recorded in the accountingperiod in which the liability is incurred, if measurable, except for accumulated sick and vacationcompensation which is expenses when paid.
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Proprietary funds (the internal service fund) are reported using the accrual basis of accounting.Proprietary funds distinguish operating revenues and expenses from non operating items.Operating revenues and expenses generally result from providing services and producing anddelivering goods in connection with the proprietary fund’s principal ongoing operations. Theprinciple operating revenues of the Clerk’s internal service fund are charges to funds related to theClerk’s compensated absences activity. Operating expenses for the internal service fund includerecognition of changes in the compensated absences liabilities. All revenues and expenses notmeeting these definitions are reported as non operating revenues and expenses.
Fiduciary fund (agency fund) statements are prepared using the economic resource measurementfocus and the accrual basis of accounting.
Measurement Focus
The accounting and financial reporting treatment applied to the fixed assets and long termliabilities associated with a fund are determined by its measurement focus. All governmental fundsare accounted for on a spending or “financial flow” measurement focus. This means that generally,only current assets and current liabilities are included in the balance sheet. Governmental fundoperating statements present increases (revenues and other financing sources) and decreases(expenditures and other financing uses) in net current assets. Accordingly, they present a summaryof sources and uses of “available spendable resources” during a period.
The portion of the Clerk’s revenue that is a budget appropriation from the Board, rather than acharge for services, is reported as an appropriation by the Clerk and as expenditures by the Board.Any excess of revenue and other financial sources received over expenditures are remitted to theBoard at year end and reported as reversion to Board of County Commissioners.
Impact of Recently Issued Accounting Pronouncements
Recently Issued and Adopted
In Fiscal Year 2015, the Clerk of Circuit Court adopted three (3) new statements of financialaccounting standards issued by the Governmental Accounting Standards Board:
• GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment ofGASB Statement No. 27
• GASB Statement No. 69, Government Combinations and Disposals of Government Operations• GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date—an amendment of GASB Statement No. 68
GASB Statement No. 68 establishes standards of accounting and financial reporting, but not fundingor budgetary standards, for defined benefit pensions and defined contribution pensions provided tothe employees of state and local governmental employers through pension plans that areadministered through trusts or equivalent arrangements. This Statement replaces the
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requirements of Statement No. 27, Accounting for Pensions by State and Local GovernmentalEmployers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate topensions that are provided through pension plans within the scope of the Statement. Therequirements of Statement No. 68 apply to the financial statements of all state and localgovernmental employers whose employees (or volunteers that provide services to state and localgovernments) are provided with pensions through pension plans that are administered throughtrusts or equivalent arrangements as described above, and to the financial statements of state andlocal governmental nonemployer contributing entities that have a legal obligation to makecontributions directly to such pension plans. This Statement establishes standards for measuringand recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, andexpense/expenditures related to pensions. Note disclosure and RSI requirements about pensionsalso are addressed. For defined benefit pensions, this Statement identifies the methods andassumptions that should be used to project benefit payments, discount projected benefit paymentsto their actuarial present value, and attribute that present value to periods of employee service.The calculation of pension contributions is unaffected by the change. The Clerk implemented GASBStatement No. 68 for the year ended September 30, 2015. There was no impact on these specialpurpose financial statements as a result of the implementation of GASB Statement No. 68.
GASB Statement No. 69, Government Combinations and Disposals of Government Operationsimproves financial reporting by addressing accounting and financial reporting for governmentcombinations and disposals of government operations. The term “government combinations” isused to refer to a variety of arrangements including mergers and acquisitions. Mergers includecombinations of legally separate entities without the exchange of significant consideration.Government acquisitions are transactions in which a government acquires another entity, or itsoperations, in exchange for significant consideration. Government combinations also includetransfers of operations that do not constitute entire legally separate entities in which no significantconsideration is exchanged. Transfers of operations may be present in shared servicearrangements, reorganizations, redistricting, annexations, and arrangements in which an operationis transferred to a new government created to provide those services. The Clerk implemented GASBStatement No. 69 for the year ended September 30, 2015. There was no impact on these specialpurpose financial statements as a result of the implementation of GASB Statement No. 69.
GASB Statement No. 71 amends Statement No. 68 to require that, at transition, a governmentrecognize a beginning deferred outflow of resources for its pension contributions, if any, madesubsequent to the measurement date of the beginning net pension liability. There was no impacton the Clerk’s special purpose financial statements as a result of the implementation of StatementNo. 71.
Recently Issued But Not Yet Effective
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application.Statement No. 72 requires the Clerk to use valuation techniques which are appropriate under thecircumstances and are either a market approach, a cost approach or an income approach.Statement No. 72 establishes a hierarchy of inputs used to measure fair value consisting of three
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levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2inputs are inputs, other than quoted prices included within Level 1, that are observable for theasset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs, such asmanagement’s assumption of the default rate among underlying mortgages of a mortgage backedsecurity. Statement No. 72 also contains note disclosure requirements regarding the hierarchy ofvaluation inputs and valuation techniques that was used for the fair value measurements. The Clerkhas not completed the process of evaluating the impact of Statement No. 73 on its special purposefinancial statements.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions andRelated Assets That Are Not within the Scope of GASB Statement 68, and Amendments to CertainProvisions of GASB Statements 67 and 68. The requirements of this statement extend the approachto accounting and financial reporting established in Statement No. 68 to all pensions to reflect thatfor accounting and financial reporting purposes, any assets accumulated for pensions that areprovided through pension plans that are not administered through trusts that meet the criteriaspecified in Statement No. 68 should not be considered pension plan assets. It also requires thatinformation similar to that required by Statement 68 be included in notes to financial statementsand required supplementary information by all similarly situated employers and nonemployercontributing entities. The provisions of Statement No. 73 that address accounting and financialreporting by employers and governmental nonemployer contributing entities for pensions that arenot within the scope of Statement No. 68 are effective for financial statements for fiscal yearsbeginning after June 15, 2016, and the requirements of this statement that address financialreporting for assets accumulated for purposes of providing those pensions are effective for fiscalyears beginning after June 15, 2015. The requirements of Statement No. 73 for pension plans thatare within the scope of Statement No. 67 or for pensions that are within the scope of Statement No.68 are effective for fiscal years beginning after June 15, 2015. Earlier application is encouraged. TheClerk has not completed the process of evaluating the impact of Statement No. 73 on its specialpurpose financial statements.
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit PlansOther Than Pension Plans. The scope of this statement includes defined benefit and definedcontribution OPEB plans administered through trusts that meet specified criteria. This statementestablishes financial reporting standards for state and local governmental other postemploymentbenefit (“OPEB”) plans. The Statement replaces Statements No. 43, Financial Reporting forPostemployment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEBMeasurements by Agent Employers and Agent Multiple Employer Plans. Statement No. 74 iseffective for financial statements for fiscal years beginning after June 15, 2016. Earlier application isencouraged. The Clerk has not completed the process of evaluating the impact of Statement No. 74on its special purpose financial statements.
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (OPEB). This statement addresses accounting andfinancial reporting for OPEB that is provided to the employees of state and local governmentalemployees. This Statement also establishes standards for recognizing and measuring liabilities,
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deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Fordefined benefit OPEB plans this statement identifies the methods and assumptions that arerequired to be used to project benefit payments, discount projected benefit payments to theiractuarial present value, and attribute that present value to periods of employee service. Notedisclosures and required supplementary information are also addressed by the statement. Thisstatement replaces the requirements of Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and Statement No. 57,OPEB Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. StatementNo. 75 is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged.
The Clerk has not completed the process of evaluating the impact of Statement No. 75 on itsspecial purpose financial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted AccountingPrinciples for State and Local Governments. This statement reduces the GAAP hierarchy to twocategories of authoritative GAAP and addresses the use of authoritative and nonauthoritativeliterature in the event that the accounting treatment for a transaction or other event is notspecified within a source of authoritative GAAP. This statement supersedes Statement No. 55, TheHierarchy of Generally Accepted Accounting Principles for State and Local Governments. It alsoamends Statement No. 62, Codification of accounting and financial Reporting Guidance Containedin Pre November 30, 1989 FASB and AICPA Pronouncements, paragraph 64, 74, and 82. Theprovisions of Statement No. 76 are effective for financial statements for periods beginning afterJune 15, 2015. Earlier application is permitted. The Clerk has not completed the process ofevaluating the impact of Statement No. 76 on its special purpose financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. For financial reportingpurposes, this statement defines a tax abatement and contains required disclosures about areporting government’s own tax abatement agreements and those that are entered into by othergovernments and that reduce the reporting government’s tax revenues. The requirements of GASBStatement No. 77 are effective for financial statements for periods beginning after December 15,2015. Earlier application is encouraged. The Clerk has not completed the process of evaluating theimpact of Statement No. 77 on its special purpose financial statements.
Budgetary Requirements
Florida Statutes, Chapter 218.35 and 218.36 details the preparation, adoption and administration ofthe Clerk's annual budget. The Clerk establishes an annual balanced budget for their office whichdisplays the revenues available to the office and the functions for which the money is to beexpended. The budgeted revenues and expenditures in the accompanying financial statementsreflect all amendments approved by the Board. The budget is prepared on a basis consistent withGAAP. Budgetary control is maintained at the major object expenditure level. Expenditures maynot legally exceed appropriations at the department level, and appropriations lapse at year end.Budgetary changes within major object expenditure categories are made at the discretion of theClerk.
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The Clerk, functioning in the capacity as the Clerk of the Circuit and County Courts and as Clerk ofthe Board, prepares a budget in seven parts:
A. The budget relating to the state court system (Circuit and County), is filed with the FloridaClerk of the Court Operations Corporation; and
B. The budget relating to the requirements of the Clerk as the Clerk of the Board, CountyAuditor, and Custodian or Treasurer of all County funds and other County related duties;
C. The budget relating to the recording of official records;
D. The budget related to the Records Modernization Fund;
E. The budget related to the Court Technology Fund;
F. The budget related to the Court Fines Fund; and
G. The budget related to the Title IV d Fund.
Inventories and Prepaid Items
The purchase method is used to account for inventory and payments to vendors for costs applicableto future periods (prepaid). Under the purchase method, expenditures are recognized when theavailable financial resource is expended. Inventory is not deemed significant and therefore, noamount has been reported.
Capital Assets
Capital assets, including property, plant, and equipment, are recorded as expenditures in thegeneral and special revenue funds at the time an asset is acquired. Capital assets are recorded atcost when purchased and fair market value if donated. The Clerk maintains a $5,000 threshold forcapitalization of equipment and $25,000 for land, buildings and improvements. Title in all capitalassets held by the Clerk is retained by the Board of County Commissioners and reported in thestatement of net position in the county wide financial statements. The Clerk maintains custodialresponsibility for the capital assets used by his office and maintains an inventory of all tangiblepersonal property of $1,000 or more as required by Florida Statute 274 and Administrative CodeSections 69I 73.002 and 69I 73.006.
Depreciation has been provided using the straight line method with an estimated useful life ofthree to five years for all tangible personal property. The Clerk did not report any land, buildings orimprovements.
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Compensated Absences
It is the Clerk's policy to allow employees to accumulate a maximum of 1,000 hours of paid time off(PTO) at the end of the calendar year. Any PTO hours exceeding 1,000 will be forfeited by thatemployee. Upon separation, employees will receive pay for their unused accrued PTO up to amaximum payment of 500 hours.
Expenditures for compensated absences in the internal service fund are those paid during thecurrent fiscal year for employee separation, PTO buy back, and longevity pay. The amounts unpaidat the end of the reporting period are then accrued for future use.
Governmental Fund Balances
Fund balances are classified either as nonspendable or as spendable. Spendable fund balances arefurther classified in a hierarchy based on the extent to which there are external and internalconstraints on the spending of these fund balances. These classifications are described as follows:
Nonspendable fund balances include amounts that cannot be spent because they are not inspendable form or legally or contractually required to be maintained intact. There were nononspendable fund balances at the Clerk as of September 30, 2015.
Spendable fund balances are classified based on a hierarchy of the Clerk’s ability to control thespending of these fund balances.
Restricted fund balances are fund balance amounts that are constrained for specific purposeswhich are externally imposed by creditors, grantors, contributors, or laws or regulations orimposed by law through constitutional provisions or enabling legislation. As of September 30,2015, the Clerk had restricted fund balances only in its special revenue funds.
Committed fund balances are fund balances constrained for specific purposes imposed by theClerk’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 intended to be used for specific purposes, but whichare neither restricted nor committed. As of September 30, 2015, the Clerk had no assignedfund balances.
Unassigned fund balances represent the residual positive fund balance within the GeneralFund, which has not been assigned to other funds and has not been restricted, committed orassigned. In funds other than the General Fund, unassigned fund balances are limited tonegative residual balances. As of September 30, 2015, the Clerk had no unassigned fundbalances because all excess revenues within the General Fund are required to be remitted tothe Board and the excess revenues within the Fine and Forfeiture Fund were remitted to theClerk of Courts Trust Fund. There were no other negative residual balances in the specialrevenue funds.
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When expenditures are incurred for purposes for which restricted or unrestricted fund balanceclassifications could be used, it is the Clerk’s policy to use restricted funds first, then unrestricted.
Management Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosureof contingent assets and liabilities at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results could differ from thoseestimates.
NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash and cash equivalents represent cash on hand as well as demand deposits, investments andcertificates of deposit with original maturities of three months or less.
Custodial Risk
At year end, all cash was held in demand deposits fully insured by the Federal Deposit InsuranceCorporation (FDIC) or the multiple financial institutions collateral pool required by Sections 280.07and 280.08, Florida Statutes.
Credit and Interest Rate Risk
The Clerk adheres to the investment policy adopted by the Board, thereby limiting its exposure toboth credit and interest rate risk as noted below. Concentration of credit risk is the risk of lossattributable to the quantity of the Clerk’s investments in a single issuer. The entire amount of theClerk’s demand deposits are held in a public fund net interest bearing checking account, payinginterest at the current federal funds rate less (5) basis points, with no reserve requirements. Thisarrangement increases the liquidity of the Clerk’s deposits and eliminates the fees paid on sweepaccounts. Balances in the account are fully collateralized in compliance with applicable Statestatutes.
NOTE 3 – RECEIVABLES
The Clerk is due receivables from various sources, all of which are deemed collectible within 60 daysof year end.
Fine andGeneral Forfeiture Title IV d
Source Fund Fund Fund Total
Other governments $ $ 526 $ 27,371 $ 27,897
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NOTE 4 – CAPITAL ASSETS
Capital asset activity for the fiscal year is as follows:
Balance Balance10/1/14 Additions Deletions 9/30/15
Governmental ActivitiesCapital assets depreciated:Machinery and equipment $ 2,299,203 $ 161,523 $ 154,477 $ 2,306,249
Less accumulated depreciation:Machinery and equipment (1,908,254) (221,394) $ (154,477) (1,975,171)
Total governmental activitiescapital assets, net $ 390,949 $ (59,871) $ $ 331,078
Title in all capital assets owned by the County is retained by the Board and the above noted capitalasset information and activity is reported on the county wide financial statements.
Depreciation expense to be reported by the County was charged to the functions of thegovernment as follows:
Governmental ActivitiesGeneral government $ 221,394
NOTE 5 – LONG TERM DEBT
The following is a summary of changes in long term debt:Compensated
Absences
Balance – October 1, 2014 $ 612,668Additions 99,389Deletions (62,587)
Balance – September 30, 2015 649,470Less current portion 100,937
Long term balance $ 548,533
The internal service fund is designed to record the annual cost related to the Clerk’s compensatedabsences policies, to record the short term and long term components of such liabilities, and tocollect and hold cash to liquidate such liabilities. The related cost associated with the fund will berecovered via charges to the General Fund.
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NOTE 6 – EXCESS REVENUE
Pursuant to Section 218.36(2), Florida Statutes, each county officer shall pay into the CountyGeneral Fund all money in excess of the sum to which he or she is entitled under the provisions ofChapter 145. $765,086 of excess revenues over expenditures was returned to the Board by October31, 2015 as required by Florida Statutes.
Pursuant to Section 28.37(2), Florida Statutes, the Clerk shall retain all fees, service charges, courtcosts, and fines collected to fund the Clerk’s court operations. Excess revenue over expenditures atSeptember 30th of each year will be sent to the Clerk of Courts Trust Fund. Additionally, if revenuesreceived in any given month exceed 1/12 of the projected revenues for the year, then that excess isto be remitted to the Clerk of Courts Trust Fund as well. For the year ended September 30, 2015,excess court revenues exceeded 1/12 of revenue projections in the amount of $15,737 and wereremitted back to the Clerk of Courts Trust Fund. Excess court fund revenues from September 2015over September 2014 were retained by the Clerk to fund October 2015 court operations in theamount of $37,421.
NOTE 7 – RETIREMENT PLAN
The Clerk and all full time employees are participants in the Florida Retirement System (the“System”), a defined benefit, cost sharing, multiple employer public retirement system, which iscontrolled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida. Accordingly, the actuarial information and relateddisclosures attributable to the Clerk’s employees are not determinable.
The System’s funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll, are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentage of payroll employercontribution rates, established by state law, is determined using the entry age actuarial fundingmethod. If an unfunded actuarial liability re emerges, future plan benefit changes, assumptionchanges, and methodology changes are amortized within 30 years, using level dollar amounts.Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses areamortized on a rolling 10% basis, as a level dollar amount.
The System provides for those employees hired prior to July 1, 2011 vesting of benefits after sixyears of creditable service. Normal retirement benefits are available to employees who retire at orafter age 62 with six or more years of service. Early retirement is available after six years of servicewith a 5% reduction of benefits for each year prior to the normal retirement age. For thoseemployees hired on or after July 1, 2011, the System provides for vesting of benefits after eightyears of credible service. Normal retirement benefits are available to these employees who retireat or after age 65 with eight years of service with a 5% reduction of benefits for each year.Retirement benefits are based upon age, average compensation and years of service credit whereaverage compensation is computed as the average of an individual’s five highest years of earnings.
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Participating employer contributions are based upon State wide rates established by the State ofFlorida. These rates applied to employee salaries at year end are as follows: DROP Program –12.88%, regular employees – 7.26%, senior management – 21.43% and elected officials – 42.27%.These rates applied to employee salaries at year end for employee contributions are 3.00% for allclassifications, with the exception of the DROP Program.
For the year ended September 30, 2015, total payroll for the Clerk’s employees covered by theSystem was $3,126,912 and total payroll was $3,202,851. The Clerk’s contributions to the plan forthe years ended September 30, 2015, 2014, and 2013 were $364,176, $314,794, and $179,858,respectively. These contributions were paid by the due date.
The Clerk has no responsibility to the System other than to make the periodic payments required bystate statutes. The Florida Division of Retirement issues a publicly available financial report thatincludes financial statements and required supplementary information for the System. The reportmay be obtained by writing Florida Division of Retirement, P O Box 9000, Tallahassee, FL 323159000 or at the Division’s website at dms.myflorida.com.
NOTE 8 – POST EMPLOYMENT BENEFITS OTHER THAN PENSION
In addition to the retirement plan in Note 7, the County, in accordance with Section 112.0801,Florida Statutes, provides post retirement health care benefits to all retired employees whoparticipated in the group health plan while employed. Employees of the Clerk are covered underthe County’s plan. The County is required to measure and recognize the annual cost of the futurebenefits and calculate the annual employer funding requirements and, to the extent funding is notmade by the County recognize an other post employment benefit (OPEB) liability on the balancesheet of the County. These amounts, if any, are recorded in the County’s government widefinancial statements.
NOTE 9 – CONTINGENT LIABILITIES
The Clerk is involved in several litigations and claims arising in the ordinary course of operations.Legal counsel for the Clerk believes a favorable outcome is likely. No accruals or loss contingencyhas been made in the special purpose financial statements.
The Clerk receives grants from federal and state sources that are subject to review and audit by thefunding sources. Such reviews and audits could result in the discovery of unallowable activities andunallowable costs. Consequently, any of the funding sources may, at their discretion, requestreimbursement for expenses or return of funds, or both, as a result of noncompliance by the Clerkwith the terms of the grants/contracts. In the opinion of the Clerk’s management, such allowances,if any, would not be significant in relation to the financial statements of the Clerk.
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NOTE 10 – FUND BALANCE
At September 30, 2015, fund balance is comprised of the following:
Restricted Fund Balance
Record Modernization – Court Innovations $ 90,290Court Technology – Court Technology 604,430Court Fines – Court Operations 74,100Title IV d – Child Support Enforcement 416,880
Total restricted fund balance $ 1,185,700
NOTE 11 – SUBSEQUENT EVENTS
The Clerk has evaluated subsequent events through the date of issuance of these financialstatements and has determined that no events occurring subsequent to year end warranteddisclosure.
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Fiduciary Funds
General Agency – To account for collections held in trust including; taxes, fine andforfeitures and other miscellaneous sources.
Juror and Witness – To account for advances received from the State and County forpayment of jurors and witnesses.
Registry of Court – To account for collections held in trust as ordered by the courts.
Child Support – To account for collection of court ordered child support andalimony.
Appearance Bonds – To account for cash bonds collected for the release of prisoners.
Tax Redemption – To account for collections related to the sale of tax deeds.
Walton County, FloridaClerk of the Circuit Court
Combining Special Purpose Statement of Fiduciary Net Position –Agency Funds
September 30, 2015
General AgencyJuror andWitness
Registry ofCourt
AssetsCash and cash equivalents 1,892,036$ 19,646$ 884,590$Receivables, net 1,200
Total assets 1,893,236$ 19,646$ 884,590$
LiabilitiesDue to other governments 648,871$ 19,646$ 300$Deposits 1,238,297 884,290Due to individuals 6,068
Total liabilities 1,893,236$ 19,646$ 884,590$
213
Child SupportAppearance
BondsTax
Redemption Total
77,428$ 190,793$ 680,673$ 3,745,166$613 1,813
78,041$ 190,793$ 680,673$ 3,746,979$
78,041$ 4,010$ 1,240$ 752,108$2,122,587
186,783 679,433 872,284
78,041$ 190,793$ 680,673$ 3,746,979$
Walton County, FloridaClerk of the Circuit Court
Combining Special Purpose Statement of Changes in Assetsand Liabilities – Agency Funds
September 30, 2015
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Balance10/01/14 Additions Deductions
Balance9/30/15
General Agency
AssetsCash and cash equivalents 1,726,559$ 32,924,524$ 32,759,047$ 1,892,036$Receivables, net 1,180 2,771 2,751 1,200
Total assets 1,727,739$ 32,927,295$ 32,761,798$ 1,893,236$
LiabilitiesDue to other governments 455,770$ 29,818,153$ 29,625,052$ 648,871$Deposits 1,266,200 2,941,018 2,968,921 1,238,297Due to individuals 5,769 168,124 167,825 6,068
Total liabilities 1,727,739$ 32,927,295$ 32,761,798$ 1,893,236$
Juror andWitness
AssetsCash and cash equivalents 29,456$ 5,000$ 14,810$ 19,646$
LiabilitiesDue to other governments 29,456$ 5,000$ 14,810$ 19,646$
Registry of Court
AssetsCash and cash equivalents 936,357$ 15,862,123$ 15,913,890$ 884,590$
LiabilitiesDue to other governments 1,441$ 200$ 1,341$ 300$Deposits 934,916 15,861,923 15,912,549 884,290
Total liabilities 936,357$ 15,862,123$ 15,913,890$ 884,590$
Child Support
AssetsCash and cash equivalents $ 856,682$ 779,254$ 77,428$Receivables, net 2,319 2,502 4,208 613
Total assets 2,319$ 859,184$ 783,462$ 78,041$
LiabilitiesDue to other governments 2,319$ 859,184$ 783,462$ 78,041$
Continued
Walton County, FloridaClerk of the Circuit Court
Combining Special Purpose Statement of Changes in Assetsand Liabilities – Agency Funds (Continued)
September 30, 2015
215
Balance10/01/14 Additions Deductions
Balance9/30/15
Appearance Bonds
AssetsCash and cash equivalents 184,746$ 444,733$ 438,686$ 190,793$
LiabilitiesDue to other governments 2,980$ 5,855$ 4,825$ 4,010$Due to individuals 181,766 438,878 433,861 186,783
Total liabilities 184,746$ 444,733$ 438,686$ 190,793$
Tax Redemption
AssetsCash and cash equivalents 456,954$ 996,101$ 772,382$ 680,673$
LiabilitiesDue to other governments 600$ 49,555$ 48,915$ 1,240$Due to individuals 456,354 946,546 723,467 679,433
Total liabilities 456,954$ 996,101$ 772,382$ 680,673$
Total Agency Funds
AssetsCash and cash equivalents 3,334,072$ 51,089,163$ 50,678,069$ 3,745,166$Receivables, net 3,499 5,273 6,959 1,813
Total assets 3,337,571$ 51,094,436$ 50,685,028$ 3,746,979$
LiabilitiesDue to other governments 492,566$ 30,737,947$ 30,478,405$ 752,108$Deposits 2,201,116 18,802,941 18,881,470 2,122,587Due to individuals 643,889 1,553,548 1,325,153 872,284
Total liabilities 3,337,571$ 51,094,436$ 50,685,028$ 3,746,979$
216
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Alex AlfordClerk of the Circuit CourtWalton County, Florida
We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the special purpose financialstatements of each major fund, the proprietary and fiduciary fund types, and the remainingnonmajor governmental funds of the Walton County, Florida Clerk of the Circuit Court (the “Clerk”),as of and for the year ended September 30, 2015, and the related notes to the special purposefinancial statements, which collectively comprise the Clerk’s basic financial statements, and haveissued our report thereon dated June 21, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the special purpose financial statements, we consideredthe Clerk’s internal control over financial reporting (internal control) to determine the auditprocedures that are appropriate in the circumstances for the purpose of expressing our opinions onthe special purpose financial statements, but not for the purpose of expressing an opinion on theeffectiveness of the Clerk’s internal control. Accordingly, we do not express an opinion on theeffectiveness of the Clerk's internal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combinationof deficiencies, in internal control that is less severe than a material weakness, yet importantenough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or significant deficiencies. Given these limitations, during our audit, we did notidentify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified.
217
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Clerk’s special purpose financialstatements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grant agreements, noncompliance with which couldhave a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit and,accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance or other matters that are required to be reported under Government AuditingStandards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
218
INDEPENDENT ACCOUNTANTS’ REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Alex AlfordClerk of the Circuit CourtWalton County, Florida
We have examined the Walton County, Florida Clerk of the Circuit Court’s (the “Clerk”) compliancewith the requirements of Sections 28.35, 28.36, and 218.415, Florida Statutes, Florida Clerks ofCourt Operations Corporation, Budget Procedure, and Government Investment Policies, respectively,during the year ended September 30, 2015. Management is responsible for the Clerk’s compliancewith those requirements. Our responsibility is to express an opinion on the Clerk’s compliancebased on our examination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the Clerk’s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our examinationprovides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the Clerk’s compliance with specified requirements.
In our opinion, the Clerk complied, in all material respects, with the aforementioned requirementsfor the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
219
MANAGEMENT LETTER
Honorable Alex AlfordClerk of Circuit CourtWalton County, Florida
Report on the Special Purpose Financial Statements
We have audited the special purpose financial statements of the Walton County, Florida Clerk ofthe Circuit Court (the “Clerk”), as of and for the fiscal year ended September 30, 2015, and haveissued our report thereon dated June 21, 2016.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550Rules of the Florida Auditor General.
Other Reports and Schedule
We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Special Purpose Financial StatementsPerformed in Accordance with Governmental Auditing Standards and Independent Accountant’sReport on an examination conducted in accordance with AICPA Professional Standards, Section 601,regarding compliance requirements in accordance with Chapter 10.550, Rules of the AuditorGeneral. Disclosures in those reports, which are dated June 21, 2016, should be considered inconjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in thepreceding annual financial audit report. There were no findings and recommendations in thepreceding annual financial audit report.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, wedid not have any such recommendations.
220
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less than material but whichwarrants the attention of those charged with governance. In connection with our audit, we did nothave any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, the Clerk, and applicable management, and isnot intended to be and should not be used by anyone other than these specified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
INDEPENDENT ACCOUNTANT’S REPORT ON AN EXAMINATION CONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS, SECTION AT 601, REGARDING COMPLIANCE WITH SECTION 61.181, FLORIDA STATUTES Honorable Alex Alford Clerk of the Circuit Court Walton County, Florida We have examined the Walton County, Florida Clerk of Court’s (the “Clerk”) compliance with the requirements Section 61.181, Florida Statutes, Depository for Alimony Transactions, Support, Maintenance, and Support, Payments; Fees, during the year ended September 30, 2015. Management is responsible for the Clerk’s compliance with those requirements. Our responsibility is to express an opinion on the Clerk’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk’s compliance with specified requirements.
In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties.
CARR, RIGGS & INGRAM, LLC
Certified Public Accountants
June 21, 2016
221
Property AppraiserWalton County, Florida
______________________
Special Purpose Financial Statements
For The Year Ended September 30, 2015
Walton County, FloridaProperty AppraiserTable of Contents
222
Page
INDEPENDENT AUDITORS’ REPORT 223 224
SPECIAL PURPOSE FINANCIAL STATEMENTS
Special Purpose Balance Sheet – Governmental Funds 225
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Governmental Funds 226
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Budget and Actual – General Fund 227
Notes to Special Purpose Financial Statements 228 – 237
COMPLIANCE SECTION
Independent Auditors’ Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Special PurposeFinancial Statements Performed in Accordance with Government AuditingStandards 238 239
Independent Auditors’ Report on Examination Conducted in Accordance withAICPA Professional Standards, Section 601, Regarding ComplianceRequirements in Accordance with Chapter 10.550, Rules of the Auditor General 240
MANAGEMENT LETTER 241 – 242
223
INDEPENDENT AUDITORS' REPORT
Honorable Patrick PilcherProperty AppraiserWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the accompanying special purpose financial statements of the General Fund of theWalton County, Florida Property Appraiser (the “Property Appraiser”), as of and for the year endedSeptember 30, 2015, and the related notes to the special purpose financial statements, as listed inthe table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these special purposefinancial statements in accordance with accounting principles generally accepted in the UnitedStates of America; this includes the design, implementation, and maintenance of internal controlrelevant to the preparation and fair presentation of special purpose financial statements that arefree from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these special purpose financial statements based onour audit. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thespecial purpose financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the specialpurpose financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of thespecial purpose financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the specialpurpose financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
224
Opinions
In our opinion, the special purpose financial statements referred to above present fairly, in allmaterial respects, the respective financial position of the General Fund of the Property Appraiser asof September 30, 2015, and the respective changes in financial position thereof and the budgetarycomparison for the General Fund for the fiscal year then ended in accordance with accountingprinciples generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the special purpose financial statements, the special purpose financialstatements referred to above were prepared solely for the purpose of complying with the Rules ofthe Auditor General of the State of Florida (“Rules”). In conformity with the Rules, theaccompanying special purpose financial statements are intended to present the financial positionand changes in financial position of the General Fund of Walton County, Florida that is attributableto the Property Appraiser. They do not purport to, and do not, present fairly the financial positionof Walton County, Florida as of September 30, 2015, and the changes in its financial position for thefiscal year then ended in conformity with accounting principles generally accepted in the UnitedStates of America. Our opinion is not modified with respect to these matters.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report on ourconsideration of the Property Appraiser's internal control over financial reporting and on our testsof its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreementsand other matters included under the heading Independent Auditors’ Report On Internal ControlOver Financial Reporting And On Compliance And Other Matters Based On An Audit Of The SpecialPurpose Financial Statements Performed In Accordance With Government Auditing Standards. Thepurpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the PropertyAppraiser’s internal control over financial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
Walton County, FloridaProperty Appraiser
Special Purpose Balance Sheet – Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.225
General Fund
AssetsCash and cash equivalents 189,759$
Liabilities and Fund BalanceLiabilitiesDue to Board of County Commissioners 170,561$Due to other governments 19,198
Total liabilities 189,759
Fund balance
Total liabilities and fund balance 189,759$
Walton County, FloridaProperty Appraiser
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Governmental Funds
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.226
General Fund
Revenues1,689,530$
Intergovernmental 190,168
Total revenues 1,879,698
ExpendituresGeneral governmentPersonnel services 1,489,682Operating 171,676Capital outlay 28,581
Total expenditures 1,689,939
189,759
(170,561)(19,198)
Total other financing sources (uses) (189,759)
$
Other Financing Sources (Uses)
Appropriations from Board of County Commissioners
Excess Revenues Over Expenditures
Reversion to Board of County Commissioners
Fund Balance ending
Return of excess fees to other taxing authorities
Fund Balance beginning
Net change in fund balance
Walton County, FloridaProperty Appraiser
Special Purpose Statement of Revenues, Expenditures and Changesin Fund Balance – Budget and Actual – General Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.227
VarianceWith
Final BudgetOriginalBudget Final Budget Actual
Positive(Negative)
RevenuesAppropriations from Board ofCounty Commissioners 1,653,492$ 1,689,530$ 1,689,530$ $
Intergovernmental 186,113 190,168 190,168
Total revenues 1,839,605 1,879,698 1,879,698
ExpendituresGeneral governmentPersonnel services 1,620,303 1,660,396 1,489,682 170,714Operating 196,302 189,459 171,676 17,783Capital outlay 23,000 29,843 28,581 1,262
Total expenditures 1,839,605 1,879,698 1,689,939 189,759
Excess Revenues OverExpenditures 189,759 189,759
Other Financing UsesReversion to Board ofCounty Commissioners (170,561) (170,561)
Return of excess fees toother taxing authorities (19,198) (19,198)
Total other financing uses (189,759) (189,759)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $ $ $ $
Budgeted Amounts
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
228
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The special purpose financial statements of the Walton County, Florida Property Appraiser (the“Property Appraiser”) have been prepared in accordance with the accounting principles andreporting guidelines established by the Governmental Accounting Standards Board (GASB),accounting principles generally accepted in the United States of America (GAAP), and accountingpractices prescribed by Chapter 10.550, Rules of the Auditor General, State of Florida. The moresignificant of these governmental accounting policies applicable to the Property Appraiser aredescribed below.
Reporting Entity
The Property Appraiser is an elected official established pursuant to Article VIII Section 1(d) of theconstitution of the State of Florida and serves the geographic boundary established in FloridaStatutes chapter 7.66. The Property Appraiser’s special purpose financial statements do notpurport to reflect the financial position or the results of operations of Walton County, Florida (the“County”) taken as a whole. Pursuant to GASB Codification of Governmental Accounting andFinancial Reporting Standards, Section 2100 and 2600, the Property Appraisers’ financialstatements are combined with those of the Board of County Commissioners (the “Board”) andother elected constitutional officers into the reporting entity of the County.
Although the Property Appraiser’s office is operationally autonomous from the Board, it does nothold sufficient corporate powers of its own to be considered a legally separate entity for financialreporting purposes. Therefore, the Property Appraiser is reported as part of the primarygovernment of the County.
Basis of Presentation
As permitted by Chapter 10.556(4), Rules of the Auditor General State of Florida, the specialpurpose financial statements consist of only the fund level financial statements as defined in GASBCodification of Governmental Accounting and Financial Reporting Section 2200.102, and do notinclude presentations of government wide financial statements of the Property Appraiser.
In preparing these special purpose financial statements, the following is reported as a majorgovernmental fund:
General Fund – The General Fund is used to account for all revenue and expendituresapplicable to the general operations of the Property Appraiser that are not required eitherlegally or by generally accepted accounting principles to be accounted for in another fund.
Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures are recognized in theaccounts and reported in the financial statements. It relates to the timing of the measurementsmade, regardless of the measurement focus applied.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
229
All governmental fund financial statements are reported using a current financial resourcesmeasurement focus on a modified accrual basis of accounting. The major modifications to theaccrual basis are: (a) revenues are recorded in the accounting period in which they becomeavailable and measurable (available means collectible within the current period or soon enoughthereafter to be used to pay liabilities of the current period, considered to be sixty days for propertytaxes and ninety days for all other revenue) (b) expenditures are recorded in the accounting periodin which the liability is incurred, if measurable, except for accumulated sick and vacationcompensation which is expensed when paid.
Measurement Focus
The accounting and financial reporting treatment applied to the fixed assets and long termliabilities associated with a fund are determined by its measurement focus. All governmental fundsare accounted for on a spending or “financial flow” measurement focus. This means that generally,only current assets and current liabilities are included in the balance sheet. Governmental fundoperating statements present increases (revenues and other financing sources) and decreases(expenditures and other financing uses) in net current assets. Accordingly, they present a summaryof sources and uses of “available spendable resources” during a period.
The operations of the Property Appraiser are funded by the Board of County Commissioners andother taxing authorities in the county. The receipts from the Board are recorded as appropriationson the Property Appraiser’s special purpose financial statements and as expenditures on theBoard’s financial statements. Any excess of revenue and other financial sources received overexpenditures are remitted at year end to the Board and other taxing authorities in proportion tothe revenue received from each agency.
Impact of Recently Issued Accounting Pronouncements
New Accounting Standards Adopted
In fiscal year 2015, the Walton County Property Appraiser adopted three (3) new statements offinancial accounting standards issued by the Governmental Accounting Standards Board:
• GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment ofGASB Statement No. 27
• GASB Statement No. 69, Government Combinations and Disposals of Government Operations• GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date—an amendment of GASB Statement No. 68
GASB Statement No. 68 establishes standards of accounting and financial reporting, but not fundingor budgetary standards, for defined benefit pensions and defined contribution pensions provided tothe employees of state and local governmental employers through pension plans that areadministered through trusts or equivalent arrangements. This Statement replaces therequirements of Statement No. 27, Accounting for Pensions by State and Local GovernmentalEmployers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate topensions that are provided through pension plans within the scope of the Statement.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
230
The requirements of Statement No. 68 apply to the financial statements of all state and localgovernmental employers whose employees (or volunteers that provide services to state and localgovernments) are provided with pensions through pension plans that are administered throughtrusts or equivalent arrangements, and to the financial statements of state and local governmentalnonemployer contributing entities that have a legal obligation to make contributions directly tosuch pension plans. This Statement establishes standards for measuring and recognizing liabilities,deferred outflows of resources, and deferred inflows of resources, and expense/expendituresrelated to pensions. Note disclosure and RSI requirements about pensions also are addressed. Fordefined benefit pensions, this Statement identifies the methods and assumptions that should beused to project benefit payments, discount projected benefit payments to their actuarial presentvalue, and attribute that present value to periods of employee service.
The adoption of Statement No. 68 has no impact on the Walton County Property Appraiser’sgovernmental fund financial statements, which continue to report expenditures in the amount ofthe actuarially determined contributions, as required by State law. The calculation of pensioncontributions is unaffected by the change. However, the adoption has resulted in the restatementof the Walton County’s Fiscal Year 2014 government wide financial statements to reflect thereporting of net pension liabilities and deferred inflows of resources and deferred outflows ofresources for each of its qualified pension plans and the recognition of pension expense inaccordance with the provisions of the Statement. There was no impact on the Walton CountyProperty Appraiser’s financial statements as a result of the implementation of Statement No. 68.
GASB Statement No. 69 improves financial reporting by addressing accounting and financialreporting for government combinations and disposals of government operations. The term“government combinations” is used to refer to a variety of arrangements including mergers andacquisitions. Mergers include combinations of legally separate entities without the exchange ofsignificant consideration. Government acquisitions are transactions in which a governmentacquires another entity, or its operations, in exchange for significant consideration. Governmentcombinations also include transfers of operations that do not constitute entire legally separateentities in which no significant consideration is exchanged. Transfers of operations may be presentin shared service arrangements, reorganizations, redistricting, annexations, and arrangements inwhich an operation is transferred to a new government created to provide those services. Therewas no impact on the Walton County Property Appraiser’s financial statements as a result of theimplementation of Statement No. 69.
GASB Statement No. 71 amends Statement No. 68 to require that, at transition, a governmentrecognize a beginning deferred outflow of resources for its pension contributions, if any, madesubsequent to the measurement date of the beginning net pension liability. There was no impacton the Walton County Property Appraiser’s financial statements as a result of the implementationof Statement No. 71.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
231
Accounting Standards Issued But Not Yet Effective
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. GASBStatement No. 72 requires the Walton Count Property Appraiser to use valuation techniques whichare appropriate under the circumstances and are either a market approach, a cost approach or anincome approach. Statement No. 72 establishes a hierarchy of inputs used to measure fair valueconsisting of three levels. Level 1 inputs are quoted prices in active markets for identical assets orliabilities. Level 2 inputs are inputs, other than quoted prices included within Level 1, that areobservable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservableinputs, such as management’s assumption of the default rate among underlying mortgages of amortgage backed security. Statement No. 72 also contains note disclosure requirements regardingthe hierarchy of valuation inputs and valuation techniques that was used for the fair valuemeasurements. The Walton County Property Appraiser has not completed the process ofevaluating the impact of GASB Statement No. 72 on its financial statements.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions andRelated Assets That Are Not within the Scope of GASB Statement 68, and Amendments to CertainProvisions of GASB Statements 67 and 68. The requirements of this statement extend the approachto accounting and financial reporting established in Statement No. 68 to all pensions to reflect thatfor accounting and financial reporting purposes, any assets accumulated for pensions that areprovided through pension plans that are not administered through trusts that meet the criteriaspecified in Statement No. 68 should not be considered pension plan assets. It also requires thatinformation similar to that required by Statement 68 be included in notes to financial statementsand required supplementary information by all similarly situated employers and nonemployercontributing entities. The provisions of Statement No. 73 that address accounting and financialreporting by employers and governmental nonemployer contributing entities for pensions that arenot within the scope of Statement No. 68 are effective for financial statements for fiscal yearsbeginning after June 15, 2016, and the requirements of this statement that address financialreporting for assets accumulated for purposes of providing those pensions are effective for fiscalyears beginning after June 15, 2015. The requirements of Statement No. 73 for pension plans thatare within the scope of Statement No. 67 or for pensions that are within the scope of Statement No.68 are effective for fiscal years beginning after June 15, 2015. Earlier application is encouraged. TheWalton County Property Appraiser has not completed the process of evaluating the impact ofStatement No. 73 on its financial statements.
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit PlansOther Than Pension Plans. The scope of this statement includes defined benefit and definedcontribution OPEB plans administered through trusts that meet specified criteria. This statementestablishes financial reporting standards for state and local governmental other postemploymentbenefit (“OPEB”) plans. The Statement replaces Statements No. 43, Financial Reporting forPostemployment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEBMeasurements by Agent Employers and Agent Multiple Employer Plans. Statement No. 74 iseffective for financial statements for fiscal years beginning after June 15, 2016. Earlier application isencouraged. The Walton County Property Appraiser has not completed the process of evaluatingthe impact of Statement No. 74 on its financial statements.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
232
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (OPEB). This statement addresses accounting andfinancial reporting for OPEB that is provided to the employees of state and local governmentalemployees. This Statement also establishes standards for recognizing and measuring liabilities,deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Fordefined benefit OPEB plans this statement identifies the methods and assumptions that arerequired to be used to project benefit payments, discount projected benefit payments to theiractuarial present value, and attribute that present value to periods of employee service. Notedisclosures and required supplementary information are also addressed by the statement. Thisstatement replaces the requirements of Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and Statement No. 57,OPEB Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. StatementNo. 75 is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged.The Walton County Property Appraiser has not completed the process of evaluating the impact ofStatement No. 75 on its financial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted AccountingPrinciples for State and Local Governments. This statement reduces the GAAP hierarchy to twocategories of authoritative GAAP and addresses the use of authoritative and nonauthoritativeliterature in the event that the accounting treatment for a transaction or other event is notspecified within a source of authoritative GAAP. This statement supersedes Statement No. 55, TheHierarchy of Generally Accepted Accounting Principles for State and Local Governments. It alsoamends Statement No. 62, Codification of accounting and financial Reporting Guidance Containedin Pre November 30, 1989 FASB and AICPA Pronouncements, paragraph 64, 74, and 82. Theprovisions of Statement No. 76 are effective for financial statements for periods beginning afterJune 15, 2015. Earlier application is permitted. The Walton County Property Appraiser has notcompleted the process of evaluating the impact of Statement No. 76 on its financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. For financial reportingpurposes, this statement defines tax abatement and contains required disclosures about a reportinggovernment’s own tax abatement agreements and those that are entered into by othergovernments and that reduce the reporting government’s tax revenues. The requirements of GASBStatement No. 77 are effective for financial statements for periods beginning after December 15,2015. Earlier application is encouraged. The Walton County Property Appraiser has not completedthe process of evaluating the impact of Statement No. 77 on its financial statements.
Budgetary Requirements
Florida Statutes Chapter 195.087 details the preparation, adoption and administration of theProperty Appraiser’s annual budget. On or before June 1 of each year, the Property Appraiser shallcertify to the Department of Revenue a proposed budget. The Department of Revenue has untilAugust 15 to approve or modify the budget. The Board has until September 30 to approve a finalbudget during hearings held pursuant to Florida Statute 200.065.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
233
Budgetary control is maintained at the major object expenditure level. Expenditures may notlegally exceed appropriations at the department level, and appropriations lapse at year end.Budgetary changes within major object expenditure categories are made at the discretion of theProperty Appraiser. Budgeted revenues and expenditures in the accompanying special purposefinancial statements reflect all amendments approved by the Department of Revenue and Board.
Inventories and Prepaid Items
The purchase method is used to account for inventory and payments to vendors for costs applicableto future periods (prepaid). Under the purchase method, expenditures are recognized when theavailable financial resource is expended. Inventory is not deemed significant and therefore noamount has been reported.
Capital Assets
Capital assets, including property, plant, and equipment, are recorded as expenditures in theGeneral Fund at the time an asset is acquired. Capital assets are capitalized at cost when purchasedand fair market value if donated. Title in all capital assets owned by the County is retained by theBoard and the Property Appraiser’s capital assets are reported on the county wide financialstatements. See Note 3 for detailed capital asset activity. The Property Appraiser maintainscustodial responsibility for capital assets used by his office.
The County maintains a $5,000 threshold for capitalization of equipment and other improvements.Additionally, the Property Appraiser maintains an inventory of all tangible personal property with adonated value or cost of $1,000 or more and a projected useful life of one year or more as requiredby Florida Statute 274 and Florida Administrative Code Sections 69(i) 73.002 and 69(i) 73.006.
Depreciation has been provided using the straight line method with an estimated useful life ofthree to five years for all tangible personal property. The Property Appraiser did not report anyland, buildings, or improvements.
Compensated Absences
It is the Property Appraiser's policy to allow employees to accumulate double the annual leavehours they accrue which is allowed for payment upon separation. Upon termination ofemployment, employees will receive pay for one half of their unused sick leave accrued up to amaximum payment of 480 hours. Expenditures for compensated absences in governmental fundsare those paid during the current fiscal year and the amount unpaid at the end of the reportingperiod that normally would be liquidated with expendable available financial resources. Accruedcompensated absences that will not be liquidated with expendable available financial resources ofthe Property Appraiser are the obligation of the County and are reported at the county wide level.The amount of accrued compensated absences to be reported at the county wide level is $53,082.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
234
The following is a schedule of changes in compensated absences:
Balance at October 1, 2014 $ 57,877Additions 126,085Deletions 130,880
Balance at September 30, 2015 53,082Less: Current portion 5,308
Long term balance $ 47,774
Governmental Fund Balances
Fund balances are classified either as nonspendable or as spendable. Spendable fund balances arefurther classified in a hierarchy based on the extent to which there are external and internalconstraints on the spending of these fund balances. These classifications are described as follows:
Nonspendable fund balances include amounts that cannot be spent because they are not inspendable form or legally or contractually required to be maintained intact. At September 30,2015, the Property Appraiser had no nonspendable fund balances.
Spendable fund balances are classified based on a hierarchy of the County’s ability to control thespending of these fund balances, and at September 30, 2015 the Property Appraiser had nospendable fund balances.
Restricted fund balances are fund balance amounts that are constrained for specific purposeswhich are externally imposed by creditors, grantors, contributors, or laws of regulations orimposed by law through constitutional provisions or enabling legislation.
Committed fund balances are fund balances intended to be used for specific purposes, butwhich are neither restricted nor committed.
Assigned fund balances are fund balances intended to be used for specific purposes imposed bycounty’s highest level of decision making authority or a body or official that has been given theauthority to assign funds.
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, orassigned. In funds other than the General Fund, unassigned fund balances are limited tonegative residual balances. As of September 30, 2015, the Property Appraiser had nounassigned fund balances because all excess revenues within the General Fund are required tobe remitted to the Board of County Commissioners.
When expenditures are incurred for purposes for which restricted or unrestricted fund balanceclassifications could be used, it is the Property Appraiser’s policy to use restricted funds first, thenunrestricted.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
235
Management Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand as well as demand deposits. At September 30,2015, all cash and cash equivalents were cash on hand or held in demand deposit bank accounts.
Custodial Risk
The Property Appraiser does not have a written investment policy but historically has limitedavailable investments to cash and cash equivalents. At year end, all cash was held in demanddeposits insured by the Federal Deposit Insurance Corporation and the multiple financialinstitutions collateral pool required by Section 280, Florida Statutes.
NOTE 3 – CAPITAL ASSETS
Capital asset activity for the fiscal year is as follows:
Balance Balance10/1/2014 Additions Deletions 9/30/2015
Governmental ActivitiesCapital assets depreciated:Machinery and equipment $ 278,911 $ 28,581 $ 21,084 $ 286,408Less accumulated depreciation:Machinery and equipment 254,061 12,466 21,084 245,443
Total governmental activitiesCapital assets, net $ 24,850 $ 16,115 $ $ 40,965
Title in all capital assets owned by the County is retained by the Board of County Commissionersand the above noted capital asset information and activity is reported in the county wide financialstatements.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
236
Depreciation expense to be reported by the County was charged to the functions of thegovernment as follows:
Governmental ActivitiesGeneral government $ 12,466
NOTE 4 – EXCESS REVENUE
Pursuant to Section 218.36(2), Florida Statutes, any excess revenues over expenditures, determinedas of the fiscal year end, “….shall be divided into parts for each governmental unit which was billedand which paid for the operation of the Property Appraiser’s office in the same proportion as thegovernmental units were originally billed. Such part shall be an advance on the current year’s bill, ifany.” The Property Appraiser has elected to return rather than credit as an advance all excess fees.
NOTE 5 – RETIREMENT PLAN
The Property Appraiser and all full time employees are participants in the Florida RetirementSystem (the “System”), a defined benefit, cost sharing, multiple employer public retirement system,which is controlled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida. Accordingly, the actuarial information and relateddisclosures attributable to the Property Appraiser's employees are not determinable.
The System's funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll, are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentage of payroll employercontribution rates, established by State law, is determined using the entry age actuarial fundingmethod. If an unfunded actuarial liability reemerges, future plan benefit changes, assumptionchanges, and methodology changes are amortized within 30 years, using level dollar amounts.Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses areamortized on a rolling 10% basis as a level dollar amount.
The System provides for employees hired before July 1, 2011 vesting of benefits after six years ofcreditable service. Normal retirement benefits are available to employees who retire at or after age62 with six or more years of service. Early retirement is available after six years of service with a 5%reduction of benefits for each year prior to the normal retirement age. For those employees hiredon or after July 1, 2011, the System provides for vesting of benefits after eight years of creditableservice. Normal retirement benefits are available to these employees who retire at or after age 65with eight years of service. Early retirement is available after eight years of service with a 5%reduction of benefits for each year prior to the normal retirement age. Retirement benefits arebased upon age, average compensation and years of service credit where average compensation iscomputed as the average of an individual's five highest years of earnings.
Walton County, FloridaProperty Appraiser
Notes To Special Purpose Financial Statements
237
Participating employer contributions are based upon State wide rates established by the State ofFlorida. These rates applied to employee salaries at year end are as follows: DROP Program –12.88%, regular employees – 7.26%, senior management – 21.43% and elected officials – 42.27%.These rates applied to employee salaries at year end for employee contributions are 3.00% for allclassifications, with the exception of the DROP Program.
Total payroll for the Property Appraiser's employees covered by the System was $1,213,699 for theyear ended September 30, 2015. The Property Appraiser's total payroll was $1,237,044 for thesame period. The Property Appraiser's contributions to the plan for the years ended September 30,2015, 2014, and 2013 were $161,669, $128,106, and $74,950, respectively and were paid by thedue date for the contribution.
The Property Appraiser has no responsibility to the System other than to make the periodicpayments required by State Statutes. The Florida Division of Retirement issues a publicly availablefinancial report that includes financial statements and required supplementary information for theSystem. The report may be obtained by writing Florida Division of Retirement, P.O. Box 9000,Tallahassee, FL 32315 9000 or at the Division’s website at dms.myflorida.com.
NOTE 6 – POST EMPLOYMENT BENEFITS OTHER THAN PENSION
In addition to the retirement plan in Note 5, the County, in accordance with Section 112.0801,Florida Statutes, provides post retirement health care benefits to all retired employees whoparticipated in the group health plan while employed. Employees of the Property Appraiser arecovered under the County’s plan. The County is required to measure and recognize the annual costof the future benefits and calculate the annual employer funding requirements and, to the extentfunding is not made by the County, recognize another post employment benefit (OPEB) liability onthe balance sheet of the County. These amounts, if any, are recorded in the County’s governmentwide financial statements.
NOTE 7 – CONTINGENT LIABILITIES
The Property Appraiser is currently involved in litigation arising in the normal course of operations.Those claims are challenging property valuations. Potential recoveries or liabilities in excess ofinsurance coverage, if any, are not determinable. No accruals for loss contingency have been madein the special purpose financial statements.
NOTE 8 – SUBSEQUENT EVENTS
The Property Appraiser has evaluated subsequent events through the date of issuance of thesespecial purpose financial statements, and has determined that no events occurring subsequent toyear end warranted disclosure.
238
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Patrick P. PilcherProperty AppraiserWalton County, Florida
We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the special purpose financialstatements of the Walton County, Florida Property Appraiser (the “Property Appraiser”) as of andfor the year ended September 30, 2015, and the related notes to the financial statements, whichcollectively comprise the Property Appraiser’s special purpose financial statements, and haveissued our report thereon dated June 21, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the special purpose financial statements, we consideredthe Property Appraiser’s internal control over financial reporting (internal control) to determine theaudit procedures that are appropriate in the circumstances for the purpose of expressing ouropinion on the special purpose financial statements, but not for the purpose of expressing anopinion on the effectiveness of the Property Appraiser’s internal control. Accordingly, we do notexpress 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 allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combinationof deficiencies, in internal control that is less severe than a material weakness, yet importantenough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or, significant deficiencies. Given these limitations, during our audit we did notidentify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified.
239
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Property Appraiser's special purposefinancial statements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts and grant agreements, noncompliance with whichcould have a direct and material effect on the determination of financial statement amounts.However, providing an opinion on compliance with those provisions was not an objective of ouraudit and, accordingly, we do not express such an opinion. The results of our tests disclosed noinstances of noncompliance or other matters that are required to be reported under GovernmentAuditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
240
INDEPENDENT AUDITOR’S REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Patrick P. PilcherProperty AppraiserWalton County, Florida
We have examined the Walton County, Florida Property Appraiser’s (the “Property Appraiser”)compliance with the requirements of Section 218.415, Florida Statutes, Local GovernmentInvestment Policies, during the year ended September 30, 2015. Management is responsible for theProperty Appraiser’s compliance with those requirements. Our responsibility is to express anopinion on the Property Appraiser’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the Property Appraiser’s compliance with those requirements and performingsuch other procedures as we considered necessary in the circumstances. We believe that ourexamination provides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the Property Appraiser’s compliance with specified requirements.
In our opinion, the Property Appraiser complied, in all material respects, with the aforementionedrequirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
241
MANAGEMENT LETTER
Honorable Patrick P. PilcherProperty AppraiserWalton County, Florida
Report on the Special Purpose Financial Statements
We have audited the special purpose financial statements of the Walton County, Florida PropertyAppraiser (the “Property Appraiser”) as of and for the fiscal year ended September 30, 2015, andhave issued our report thereon dated June 21, 2016.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of theAuditor General.
Other Reports and Schedule
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Special Purpose Financial StatementsPerformed in Accordance with Government Auditing Standards and Independent Accountant’sReport on an examination conducted in accordance with AICPA Professional Standards, Section 601,regarding compliance requirements in accordance with Chapter 10.550, Rules of the AuditorGeneral. Disclosures in those reports, which are dated June 21, 2016, should be considered inconjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address significant findings and recommendations made inthe preceding annual financial audit report. There were no findings and recommendations made inthe preceding annual financial audit report.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, wedid not have any such recommendations.
242
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less than material but whichwarrants the attention of those charged with governance. In connection with our audit, we did nothave any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, the Property Appraiser, and members ofmanagement and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
243
Tax CollectorWalton County, Florida
______________________
Special Purpose Financial Statements
For The Year Ended September 30, 2015
Walton County, FloridaTax Collector
Table of ContentsSeptember 30, 2015
244
Page
INDEPENDENT AUDITORS’ REPORT 245 – 246
SPECIAL PURPOSE FINANCIAL STATEMENTS
Special Purpose Balance Sheet – Governmental Funds 247
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Governmental Funds 248
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Budget and Actual – General Fund 249
Special Purpose Statement of Fiduciary Net Position 250
Notes to Special Purpose Financial Statements 251 – 262
COMBINING AND INDIVIDUAL FUND STATEMENTS
Description of Fiduciary Funds 263
Combining Special Purpose Statement of Fiduciary Net Position AgencyFunds 264
Combining Special Purpose Statement of Changes in Assets and LiabilitiesAgency Funds 265
COMPLIANCE SECTION
Independent Auditors’ Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Special PurposeFinancial Statements Performed in Accordance with Government AuditingStandards
Independent Auditors’ Report on Examination Conducted in Accordance withAICPA Professional Standards, Section 601, Regarding ComplianceRequirements in Accordance with Chapter 10.550, Rules of the Auditor General
266 – 267
268
MANAGEMENT LETTER 269 – 271
245
INDEPENDENT AUDITORS' REPORT
Honorable Rhonda SkipperTax CollectorWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the accompanying special purpose financial statements of the General Fund andfiduciary fund type of the Walton County, Florida Tax Collector (the Tax Collector), as of and for theyear 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 as listed in thetable of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these special purposefinancial statements in accordance with accounting principles generally accepted in the UnitedStates of America; this includes the design, implementation, and maintenance of internal controlrelevant to the preparation and fair presentation of special purpose financial statements that arefree 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 ouraudit. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thespecial purpose financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the specialpurpose financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of thespecial purpose financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the specialpurpose financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
246
Opinion
In our opinion, the special purpose financial statements referred to above present fairly, in allmaterial respects, the financial position of the General Fund and fiduciary fund type of the WaltonCounty, Florida Tax Collector, as of September 30, 2015, and the respective changes in financialposition and the budgetary comparison for the General Fund thereof for the year then ended inaccordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the special purpose financial statements, the special purpose financialstatements referred to above were prepared solely for the purpose of complying with the Rules ofthe Auditor General of the State of Florida. In conformity with the Rules, the accompanying specialpurpose financial statements are intended to present the financial position and changes in financialposition of the General Fund and fiduciary fund types, only for that portion of the General Fund andfiduciary fund types of Walton County, Florida that is attributable to the Tax Collector. They do notpurport to, and do not, present fairly the financial position of Walton County, Florida as ofSeptember 30, 2015, and the changes in its financial position for the fiscal year then ended inconformity with accounting principles generally accepted in the United States of America. Ouropinion is not modified with respect to these matters.
Other Matters
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the special purpose financialstatements that collectively comprise the Tax Collector’s financial statements. The combining andindividual fund statements, as listed in the table of contents, are presented for purposes of additionalanalysis and are not a required part of the special purpose financial statements and we do not expressan opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report on ourconsideration of the Tax Collector's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, rules, regulations, contracts, and grant agreements andother matters included under the heading Independent Auditors’ Report On Internal Control OverFinancial Reporting And On Compliance And Other Matters Based On An Audit Of The SpecialPurpose Financial Statements Performed In Accordance With Government Auditing Standards. Thepurpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the Tax Collector’sinternal control over financial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.Certified Public AccountantsJune 21, 2016
Walton County, FloridaTax Collector
Special Purpose Balance Sheet – Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.247
General Fund
AssetsCash and cash equivalents 852,288$Due from individuals 60,225
Total assets 912,513$
Liabilities and Fund BalanceLiabilitiesAccounts payable 24,395$Wages and benefits payable 135,909Due to Board of County Commissioners 684,537Due to other governments 67,672
Total liabilities 912,513
Fund balance
Total liabilities and fund balance 912,513$
Walton County, FloridaTax Collector
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Governmental Funds
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.248
General Fund
RevenuesCharges for services 3,318,500$
ExpendituresGeneral governmentPersonnel services 2,037,255Operating 342,659Capital outlay 192,491Debt servicePrincipal 10,961Interest 1,549
Total expenditures 2,584,915
Excess Revenues Over Expenditures 733,585
Other Financing Sources (Uses)Proceeds from issuance of capital leases 18,625Return of excess fees to other taxing authorities (67,672)Reversion to Board of County Commissioners (684,538)
Total other financing sources (uses) (733,585)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $
Walton County, FloridaTax Collector
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Budget and Actual General Fund
September 30, 2015
See accompanying notes to special purpose financial statements.249
Variancewith Final
Budgetary BudgetOriginalBudget Final Budget
BasisActual
Positive(Negative)
RevenuesCharges for services 2,668,673$ 2,759,655$ 3,318,500 558,845$
ExpendituresGeneral governmentPersonnel services 2,139,759 2,117,759 2,037,255 80,504Operating 374,914 465,896 342,659 123,237Capital outlay 154,000 176,000 173,866 2,134Debt servicePrincipal 10,961 (10,961)Interest 1,549 (1,549)
Total expenditures 2,668,673 2,759,655 2,566,290 193,365
Excess Revenues Over Expenditures 752,210 752,210
Other Financing Sources (Uses)Return of excess fees to othertaxing authorities (67,672) (67,672)
Reversion to Board of CountyCommissioners (684,538) (684,538)
Total other financing sources (uses) (752,210) (752,210)
Net change in fund balalnce
Fund Balance beginning
Fund Balance ending $ $ $ $
Budgeted Amounts
Walton County, FloridaTax Collector
Special Purpose Statement of Fiduciary Net PositionSeptember 30, 2015
See accompanying notes to special purpose financial statements.250
Agency Funds
AssetsCash 839,772$
LiabilitiesDue to other governments 323,562$Deposits 516,210
Total liabilities 839,772$
Walton County, FloridaTax Collector
Notes to Special Purpose Financial Statements
251
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The special purpose financial statements of the Walton County, Florida Tax Collector (the “TaxCollector”) have been prepared in accordance with the accounting principles and reportingguidelines established by the Governmental Accounting Standards Board (GASB), accountingprinciples generally accepted in the United States of America (GAAP), and accounting practicesprescribed by Chapter 10.550, Rules of the Auditor General, State of Florida. The more significantof these governmental accounting policies applicable to the Tax Collector are described below.
Reporting Entity
The Tax Collector is an elected official established pursuant to Article VIII Section 1(d) of theconstitution of the State of Florida. The Tax Collector is to serve the geographic boundaryestablished in Florida Statutes chapter 7.66. The Tax Collector's special purpose financialstatements do not purport to reflect the financial position or the results of operations of WaltonCounty, Florida (the “County”) taken as a whole. Pursuant to GASB Codification of GovernmentalAccounting and Financial Reporting Standards, Sections 2100 and 2600, the Tax Collector’s specialpurpose financial statements are combined with those of the Board of County Commissioners (the“Board”) and other elected constitutional officers into the reporting entity of the County.
Although the Tax Collector’s office is operationally autonomous from the Board, it does not holdsufficient corporate powers of its own to be considered a legally separate entity for financialreporting purposes. Therefore, the Tax Collector’s special purpose financial statements arecombined with those of the Board and other elected officials into the reporting entity of theCounty.
Basis of Presentation
As permitted by Chapter 10.556(4), Rules of the Auditor General State of Florida, the specialpurpose financial statements consist of only the fund level financial statements as defined in GASBCodification of Governmental Accounting and Financial Reporting Section 200.102, and do notinclude presentations of government wide financial statements of the Tax Collector.
In preparing these special purpose financial statements the following is reported as a majorgovernmental fund:
General Fund – The General Fund is used to account for all revenue and expendituresapplicable to the general operations of the Tax Collector that are not required either legally orby generally accepted accounting principles to be accounted for in another fund.
The Tax Collector also reported the following fiduciary fund type:
Agency Funds – Agency funds are custodial in nature and account for assets held in a trustcapacity or as an agent for individuals, other governmental units, and/or other funds. Agencyfunds only report assets and liabilities and do not measure results of operations.
Walton County, FloridaTax Collector
Notes to Special Purpose Financial Statements
252
Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures are recognized in theaccounts and reported in the financial statements. It relates to the timing of the measurementsmade, regardless of the measurement focus applied.
All governmental fund financial statements are reported using a current financial resourcesmeasurement focus on a modified accrual basis of accounting. The major modifications to theaccrual basis are: (a) revenues are recorded in the accounting period in which they becomeavailable and measurable (available means collectible within the current period or soon enoughthereafter to be used to pay liabilities of the current period, considered to be sixty days for propertytaxes and ninety days for all other revenue) and (b) expenditures are recorded in the accountingperiod in which the liability is incurred, if measurable, except for accumulated sick and vacationcompensation which is expensed when paid.
The fiduciary fund (agency fund) statements are prepared using the economic resourcesmeasurement focus and the accrual basis of accounting.
Measurement Focus
The accounting and financial reporting treatment applied to the fixed assets and long termliabilities associated with a fund are determined by its measurement focus. All governmental fundsare accounted for on a spending or “financial flow” measurement focus. This means that generally,only current assets and current liabilities are included in the balance sheet. Governmental fundoperating statements present increases (revenues and other financing sources) and decreases(expenditures and other financing uses) in net current assets. Accordingly, they present a summaryof sources and uses of “available spendable resources” during a period.
Impact of Recently Issued Accounting Pronouncements
Recently Issued and Adopted
In Fiscal Year 2015, the Tax Collector adopted three (3) new statements of financial accountingstandards issued by the Governmental Accounting Standards Board (GASB):
• Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASBStatement No. 27
• Statement No. 69, Government Combinations and Disposals of Government Operations• Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement
Date—an amendment of GASB Statement No. 68
Statement No. 68 establishes standards of accounting and financial reporting, but not funding orbudgetary standards, for defined benefit pensions and defined contribution pensions provided tothe employees of state and local governmental employers through pension plans that areadministered through trusts or equivalent arrangements. This Statement replaces the
Walton County, FloridaTax Collector
Notes to Special Purpose Financial Statements
253
requirements of Statement No. 27, Accounting for Pensions by State and Local GovernmentalEmployers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate topensions that are provided through pension plans within the scope of the Statement.
The requirements of Statement No. 68 apply to the financial statements of all state and localgovernmental employers whose employees (or volunteers that provide services to state and localgovernments) are provided with pensions through pension plans that are administered throughtrusts or equivalent arrangements, and to the financial statements of state and local governmentalnonemployer contributing entities that have a legal obligation to make contributions directly tosuch pension plans. This Statement establishes standards for measuring and recognizing liabilities,deferred outflows of resources, and deferred inflows of resources, and expense/expendituresrelated to pensions. Note disclosure and RSI requirements about pensions also are addressed. Fordefined benefit pensions, this Statement identifies the methods and assumptions that should beused to project benefit payments, discount projected benefit payments to their actuarial presentvalue, and attribute that present value to periods of employee service.
The adoption of Statement No. 68 has no impact on the Tax Collector’s special purpose financialstatements, which continue to report expenditures in the amount of the actuarially determinedcontributions, as required by State law. The calculation of pension contributions is unaffected bythe change. The adoption of Statement No. 68 is recorded and shown on the Walton County,Florida Board of County Commissioner’s government wide financial statements.
Statement No. 69 improves financial reporting by addressing accounting and financial reporting forgovernment combinations and disposals of government operations. The term “governmentcombinations” is used to refer to a variety of arrangements including mergers and acquisitions.Mergers include combinations of legally separate entities without the exchange of significantconsideration. Government acquisitions are transactions in which a government acquires anotherentity, or its operations, in exchange for significant consideration. Government combinations alsoinclude transfers of operations that do not constitute entire legally separate entities in which nosignificant consideration is exchanged. Transfers of operations may be present in shared servicearrangements, reorganizations, redistricting, annexations, and arrangements in which an operationis transferred to a new government created to provide those services. There was no impact on theTax Collector’s financial statements as a result of the implementation of Statement No. 69.
Statement No. 71 amends Statement No. 68 to require that, at transition, a government recognize abeginning deferred outflow of resources for its pension contributions, if any, made subsequent tothe measurement date of the beginning net pension liability. Adoption of this Statement had noeffect on the Tax Collector’s financial statements as its measurement date for revenue of pensionsis the same as the respective fiscal year end.
Accounting Standards Issued But Not Yet Effective
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application.Statement No. 72 requires the Tax Collector to use valuation techniques which are appropriateunder the circumstances and are either a market approach, a cost approach or an income approach.
Walton County, FloridaTax Collector
Notes to Special Purpose Financial Statements
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Statement No. 72 establishes a hierarchy of inputs used to measure fair value consisting of threelevels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2inputs are inputs, other than quoted prices included within Level 1, that are observable for theasset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs, such asmanagement’s assumption of the default rate among underlying mortgages of a mortgage backedsecurity. Statement No. 72 also contains note disclosure requirements regarding the hierarchy ofvaluation inputs and valuation techniques that was used for the fair value measurements. The TaxCollector has not completed the process of evaluating the impact of Statement No. 73 on itsfinancial statements.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions andRelated Assets That Are Not within the Scope of GASB Statement 68, and Amendments to CertainProvisions of GASB Statements 67 and 68. The requirements of this statement extend the approachto accounting and financial reporting established in Statement No. 68 to all pensions to reflect thatfor accounting and financial reporting purposes, any assets accumulated for pensions that areprovided through pension plans that are not administered through trusts that meet the criteriaspecified in Statement No. 68 should not be considered pension plan assets. It also requires thatinformation similar to that required by Statement 68 be included in notes to financial statementsand required supplementary information by all similarly situated employers and nonemployercontributing entities. The provisions of Statement No. 73 that address accounting and financialreporting by employers and governmental nonemployer contributing entities for pensions that arenot within the scope of Statement No. 68 are effective for financial statements for fiscal yearsbeginning after June 15, 2016, and the requirements of this statement that address financialreporting for assets accumulated for purposes of providing those pensions are effective for fiscalyears beginning after June 15, 2015. The requirements of Statement No. 73 for pension plans thatare within the scope of Statement No. 67 or for pensions that are within the scope of Statement No.68 are effective for fiscal years beginning after June 15, 2015. Earlier application is encouraged. TheTax Collector has not completed the process of evaluating the impact of Statement No. 73 on itsfinancial statements.
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit PlansOther Than Pension Plans. The scope of this statement includes defined benefit and definedcontribution OPEB plans administered through trusts that meet specified criteria. This statementestablishes financial reporting standards for state and local governmental other postemploymentbenefit (“OPEB”) plans. The Statement replaces Statements No. 43, Financial Reporting forPostemployment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEBMeasurements by Agent Employers and Agent Multiple Employer Plans. Statement No. 74 iseffective for financial statements for fiscal years beginning after June 15, 2016. Earlier application isencouraged. The Tax Collector has not completed the process of evaluating the impact ofStatement No. 74 on its financial statements.
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (OPEB). This statement addresses accounting andfinancial reporting for OPEB that is provided to the employees of state and local governmentalemployees. This Statement also establishes standards for recognizing and measuring liabilities,
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deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Fordefined benefit OPEB plans this statement identifies the methods and assumptions that arerequired to be used to project benefit payments, discount projected benefit payments to theiractuarial present value, and attribute that present value to periods of employee service. Notedisclosures and required supplementary information are also addressed by the statement. Thisstatement replaces the requirements of Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and Statement No. 57,OPEB Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. StatementNo. 75 is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged.The Tax Collector has not completed the process of evaluating the impact of Statement No. 75 onits financial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted AccountingPrinciples for State and Local Governments. This statement reduces the GAAP hierarchy to twocategories of authoritative GAAP and addresses the use of authoritative and nonauthoritativeliterature in the event that the accounting treatment for a transaction or other event is notspecified within a source of authoritative GAAP. This statement supersedes Statement No. 55, TheHierarchy of Generally Accepted Accounting Principles for State and Local Governments. It alsoamends Statement No. 62, Codification of accounting and financial Reporting Guidance Containedin Pre November 30, 1989 FASB and AICPA Pronouncements, paragraph 64, 74, and 82. Theprovisions of Statement No. 76 are effective for financial statements for periods beginning afterJune 15, 2015. Earlier application is permitted. The Tax Collector has not completed the process ofevaluating the impact of Statement No. 76 on its financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. For financial reportingpurposes, this statement defines a tax abatement and contains required disclosures about areporting government’s own tax abatement agreements and those that are entered into by othergovernments and that reduce the reporting government’s tax revenues. The requirements of GASBStatement No. 77 are effective for financial statements for periods beginning after December 15,2015. Earlier application is encouraged. The Tax Collector has not completed the process ofevaluating the impact of Statement No. 77 on its financial statements.
Budgetary Requirements
Florida Statutes, Chapter 195.087 details the preparation, adoption, and administration of the TaxCollector’s annual budget. On or before August 1 of each year, the Tax Collector submits an annualbudget to the Department of Revenue (the “Department”). If the Department finds the budgetinadequate or excessive, it shall return such budget to the Tax Collector, together with its rulingthereon. The Tax Collector shall revise the budget as required and resubmit it to the Department.After final approval by the Department, there shall be no reduction or increase by the Tax Collectoror Board without the approval of the Department. Budgetary control is maintained at the majorobject expenditure level. Expenditures may not legally exceed appropriations at the departmentlevel, and appropriations lapse at year end. Budgetary changes within major object expenditurecategories are made at the discretion of the Tax Collector. The budgeted revenues andexpenditures in the accompanying special purpose financial statements reflect all amendmentsapproved by the Board and the Department.
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The Tax Collector’s budget is prepared under a budgetary basis of accounting that differs fromgenerally accepted accounting principles (GAAP). The differences are due to capital lease proceedsand related expenditures. The actual results of operations in the Statement of Revenues,Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund are presented on abudgetary basis for budgetary accounting purposes. Adjustments to convert the results ofoperation of the general fund at the end of the year from the budgetary basis of accounting to theGAAP basis of accounting are as follows
ExpendituresOther FinancingSources (Uses)
Budget Basis 2,566,290$ (752,210)$Non budgeted expenditures and other sources:
Capital outlay 18,625Capital lease proceeds 18,625
2,584,915$ (733,585)$
Capital lease proceeds and related expenditures were not budgeted.
Inventories and Prepaid Items
The purchase method is used to account for inventory and payments to vendors for costs applicableto future periods (prepaid). Under the purchase method, expenditures are recognized when theavailable financial resource is expended. Inventory is not deemed significant and therefore noamount has been reported.
Capital Assets
Capital assets are recorded as expenditures in the general fund at the time an asset is acquired.Capital assets are capitalized at cost when purchased and fair market value if donated. Title in allcapital assets owned by the County is retained by the Board and the Tax Collector’s capital assetsare reported on the county wide financial statements. See Note 3 for detailed capital asset activity.
The Tax Collector maintains custodial responsibility for capital assets used in her office.
The County maintains a $5,000 threshold for capitalization of equipment and other improvements.Additionally, the Tax Collector maintains an inventory of all tangible personal property with adonated value or cost of $1,000 or more and a projected useful life of one year or more as requiredby Florida Statute 274 and Florida Administrative Code Sections 69(i) 73.002 and 69(i) 73.006.
Depreciation has been provided using the straight line method with an estimated useful life ofthree to five years for all tangible personal property. The Tax Collector did not report any land,buildings, or improvements.
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Capital Leases
The Tax Collector entered into various lease agreements as a lessee for financing the acquisition ofcopiers and mailing systems. The lease agreements qualify as capital leases for accountingpurposes and; therefore, have been recorded in the county wide financial statements at thepresent value of future minimum lease payments as of the lease inception date. The related assetsare reported as capital assets in the county wide financial statements. See Note 4 for detailedcapital lease activity.
Compensated Absences
The Tax Collector’s policy limits the accumulation of annual leave to 240 hours as of the first day ofeach calendar year. There is no limitation on the amount of sick leave accumulation. However,upon separation from employment, all accumulated sick leave up to 240 hours, regardless of lengthof employment, and all accumulated annual leave up to 240 hours, pending one full year ofemployment, will be paid provided one of the following conditions are met:
Resignation of position, with notice and in good standingElimination of position due to staff cutbacks and layoffsRetirementDeath
Expenditures for compensated absences in governmental funds are those paid during the currentfiscal year and the amount unpaid at the end of the reporting period that normally would beliquidated with expendable available financial resources.
Accrued compensated absences that will not be liquidated with expendable available financialresources of the Tax Collector are the obligation of the County and are reported at the county widelevel. The amount of Tax Collector’s accrued compensated absences to be reported at the countywide level is $255,431.
Governmental Fund Balances
Fund balances are classified either as nonspendable or as spendable. Spendable fund balances arefurther classified in a hierarchy based on the extent to which there are external and internalconstraints on the spending of these fund balances. These classifications are described as follows:
Nonspendable fund balances include amounts that cannot be spent because they are not inspendable form or legally or contractually required to be maintained intact. There were nononspendable fund balances at the Tax Collector as of September 30, 2015.
Spendable fund balances are classified based on a hierarchy of the Tax Collector’s ability to controlthe spending of these fund balances, and at September 30, 2015 the Tax Collector had nospendable fund balances.
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Restricted fund balances are fund balance amounts that are constrained for specific purposeswhich are externally imposed by creditors, grantors, contributors, or laws of regulations orimposed by law through constitutional provisions or enabling legislation.
Committed fund balances are fund balances constrained for specific purposes imposed by theTax Collector’s formal action of highest level of decision making authority.
Assigned fund balances are fund balances intended to be used for specific purposes, but whichare 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, orassigned. In funds other than the General Fund, unassigned fund balances are limited tonegative residual balances. As of September 30, 2015, the Tax Collector had no unassignedfund balances because all excess revenues within the General Fund are required to be remittedto the appropriate taxing agencies.
When expenditures are incurred for purposes for which restricted or unrestricted fund balanceclassifications could be used, it is the Tax Collector’s policy to use restricted funds first, thenunrestricted.
Management Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosureof contingent assets and liabilities at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results could differ from thoseestimates.
NOTE 2 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand as well as demand deposits. At September 30,2015, all cash and cash equivalents were on hand or being held in demand deposit bank accounts.
Custodial Risk
The Tax Collector does not have a written investment policy but historically has limited availableinvestments to cash and cash equivalents. At year end, all cash held in demand deposits was fullyinsured by the Federal Depository Insurance Corporation and the multiple financial institutionscollateral pool required by Section 280, Florida Statutes.
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NOTE 3 – CAPITAL ASSETS
Capital asset activity for the fiscal year is as follows:
Balance Balance9/30/14 Additions Deletions 9/30/15
Governmental ActivitiesCapital assets depreciated:Machinery and equipment 406,948$ 184,559$ $ 591,507$
Less: accumulated depreciationMachinery and equipment (358,502) (41,996) (400,498)
Total governmental activitiescapital assets, net 48,446$ 142,563$ $ 191,009$
Title in all capital assets owned by the County is retained by the Board and the above noted capitalasset information and activity is reported on the county wide financial statements.
Depreciation expense to be reported by the County was charged to the functions of thegovernment as follows:
Governmental ActivitiesGeneral government 41,996$
NOTE 4 – LONG TERM DEBT
The following is a summary of changes in long term debt:
Balance Balance Due in9/30/14 Additions Deletions 9/30/15 One year
Capital leases 25,203$ 18,624$ 10,961$ 32,866$ 8,276$Compensated absences 251,267 93,767 89,604 255,430 25,543
Total 276,470$ 112,391$ 100,565$ 288,296$ 33,819$
Capital leases and related assets, as well as compensated absences are reported on the countywide financial statements.
Capital Leases
The Tax Collector has entered into lease agreements as lessee for financing the acquisition of twocopier machines and two mailing systems. The lease agreements qualify as capital leases foraccounting purposes (term of lease is greater than 75% of the life of the asset) and; therefore, havebeen recorded at the present value of the future minimum lease payments as of the inception dateon the county wide financial statements.
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The following is an analysis of the property under capital lease at September 30, 2015:
CapitalAssets
Machinery and equipment 93,279$Less: accumulated depreciation (61,351)
Net leased property 31,928$
The future minimum lease obligations and the net present value of these minimum lease paymentsas of September 30, 2015 are as follows:
For the fiscal year ended September 30,
2016 9,720$2017 9,1682018 9,1682019 7,0982020 1,049
Total minimum lease payments 36,203Less: amount representing interest 3,337
Present value of future minimum lease payments 32,866$
NOTE 5 EXCESS REVENUE
Pursuant to Section 218.36(2), Florida Statutes, whenever a tax collector has excess revenues overexpenditures as determined as of the fiscal year end, “…he or she shall distribute the excess to eachgovernmental unit in the same proportion as the fees paid by the governmental unit bear to thetotal fee income of his or her office.” Excess revenues over expenditures were returned to thevarious taxing authorities before October 31, 2015 as required by Florida Statutes and are accruedand reported as other financing uses at September 30, 2015. For fiscal year 2015, $752,210 ofexcess fees was remitted to various taxing authorities.
NOTE 6 RETIREMENT PLAN
The Tax Collector and all full time employees are participants in the Florida Retirement System (the“System”), a defined benefit, cost sharing, multiple employer public retirement system, which iscontrolled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida. Accordingly, the actuarial information and relateddisclosures attributable to the Tax Collector's employees are not determinable.
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The System's funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentage of payroll employercontribution rates, established by State law, is determined using the entry age actuarial fundingmethod. If an unfunded actuarial liability reemerges, future plan benefit changes, assumptionchanges, and methodology changes are amortized within 30 years, using level dollar amounts.Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses areamortized on a rolling 10% basis, as a level dollar amount.
The System provides for those employees hired prior to July 1, 2011 vesting of benefits after sixyears of creditable service. Normal retirement benefits are available to employees who retire at orafter age 62 with six or more years of service. Early retirement is available after six years of servicewith a 5% reduction of benefits for each year prior to the normal retirement age. For thoseemployees hired on or after July 1, 2011, the System provides for vesting of benefits after eightyears of credible service. Normal retirement benefits are available to these employees who retireat or after age 65 with eight years of service with a 5% reduction of benefits for each year.Retirement benefits are based upon age, average compensation, and years of service credit whereaverage compensation is computed as the average of an individual's five highest years of earnings.
Participating employer contributions are based upon State wide rates established by the State ofFlorida. These rates applied to employee salaries at year end are as follows: regular employees –7.26%, DROP Program – 12.88%, senior management – 21.43%, and elected officials – 42.27%. Therate applied to employee salaries for employer contributions was 3% for all classifications, with theexception for the DROP Program.
Total payroll for the Tax Collector's employees covered by the System was $1,410,112 for the yearended September 30, 2015. The Tax Collector's total payroll was $1,476,131 for the same period.The Tax Collector's contributions to the plan for the years ended September 30, 2015, 20142014,and 20132013 were $201,503, $180,460, and $101,472, respectively. These contributions werepaid by the due date for the contribution.
The Tax Collector has no responsibility to the System other than to make the periodic paymentsrequired by State Statutes. The Florida Division of Retirement issues a publicly available financialreport that includes financial statements and required supplementary information for theSystem. The report may be obtained by writing Florida Division of Retirement, P O Box 9000,Tallahassee, FL 32315 9000 or at the Division’s website at dms.myflorida.com.
NOTE 7 POST EMPLOYMENT BENEFITS OTHER THAN PENSION
In addition to the retirement plan in Note 6, the County, in accordance with Section 112.0801,Florida Statutes, provides post retirement health care benefits to all retired employees whoparticipated in the group health plan while employed. Employees of the Tax Collector are coveredunder the County’s plan. The County is required to measure and recognize the annual cost of the
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future benefits and calculate the annual employer funding requirements and, to the extent fundingis not made by the County to recognize another post employment benefit (OPEB) liability on thebalance sheet of the County. These amounts, if any, are recorded in the County’s government widefinancial statements.
NOTE 8 – CONTINGENT LIABILITIES
The Tax Collector is involved in several litigations and claims arising in the normal course ofoperations. Potential recoveries or liabilities in excess of insurance coverage, if any, are notdeterminable. No accruals for loss contingency have been made in the financial statements.
NOTE 9 SUBSEQUENT EVENTS
The Tax Collector has evaluated subsequent events through the date of issuance of these specialpurpose financials statements, and has determined that no events occurring subsequent to yearend warranted disclosure.
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Fiduciary Funds
License – To account for collection and subsequent remittance of licenses andpermits.
Tag – To account for collection of motor vehicle registration receipts andsubsequent disbursement.
Tax – To account for the collection and disbursement of local property taxes.
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Combining Special Purpose Statement of Fiduciary Net PositionAgency Funds
September 30, 2015
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License Tag Tax Total
AssetsCash 3,759$ $ 204,818 $ 631,195 $ 839,772
LiabilitiesDue to other governments 3,759$ 204,818$ 114,984$ $ 323,561Deposits 516,211 516,211
Total liabilities 3,759$ $ 204,818 $ 631,195 $ 839,772
Walton County, FloridaTax Collector
Combining Special Purpose Statement ofChanges in Assets and Liabilities
Agency FundsFor the Year Ended September 30, 2015
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Balance Balance10/1/14 Additions Deductions 9/30/15
LicenseAssetsCash 1,536$ 158,385$ 156,162$ 3,759$
LiabilitiesDue to other governments 1,536$ 158,456$ 156,233$ 3,759$
TagAssetsCash 183,218$ 8,544,858$ 8,523,258$ 204,818$
LiabilitiesDue to other governments 183,218$ 8,767,279$ 8,745,679$ 204,818$
TaxAssetsCash 1,094,563$ 138,351,017$ 138,814,385$ 631,195$
LiabilitiesDue to other governments 394,250$ 138,900,390$ 139,179,656$ 114,984$Deposits 700,313 5,513,059 5,697,161 516,211
Total liabilities 1,094,563$ 144,413,449$ 144,876,817$ 631,195$
Total All Agency FundsAssetsCash 1,279,317$ 147,054,260$ 147,493,805$ 839,772$
LiabilitiesDue to other governments 579,004$ 147,826,125$ 148,081,568$ 323,561$Deposits 700,313 5,513,059 5,697,161 516,211
Total liabilities 1,279,317$ 153,339,184$ 153,778,729$ 839,772$
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INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Rhonda SkipperTax CollectorWalton County, Florida
We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the special purpose financialstatements of the Walton County, Florida Tax Collector (the “Tax Collector”), as of and for the yearended 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 haveissued our report thereon dated June 21, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the special purpose financial statements, we consideredthe tax Collector’s internal control over financial reporting (internal control) to determine the auditprocedures that are appropriate in the circumstances for the purpose of expressing our opinions onthe special purpose financial statements, but not for the purpose of expressing an opinion on theeffectiveness of the Tax Collector’s internal control. Accordingly, we do not express an opinion onthe effectiveness of the Tax Collector’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combinationof deficiencies, in internal control that is less severe than a material weakness, yet importantenough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or, significant deficiencies. Given these limitations, during our audit we did notidentify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified. We did identify a certain deficiency ininternal control, described in the accompanying management letter as finding 2015 01 that weconsider to be a significant deficiency.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Tax Collector’s special purposefinancial statements are free from material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grant agreements, noncompliance withwhich could have a direct and material effect on the determination of special purpose financialstatement amounts. However, providing an opinion on compliance with those provisions was notan objective of our audit, and accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reportedunder Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
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Certified Public Accountants
June 21, 2016
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INDEPENDENT AUDITOR’S REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONALSTANDARDS, SECTION 601, REGARDING COMPLIANCE REQUIREMENTSIN ACCORDANCE WITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Rhonda SkipperTax CollectorWalton County, Florida
We have examined the Walton County, Florida Tax Collector’s (the “Tax Collector”) compliance withthe requirements of Section 218.415, Florida Statutes, Local Government Investment Policies, duringthe year ended September 30, 2015. Management is responsible for the Tax Collector’s compliancewith those requirements. Our responsibility is to express an opinion on the Tax Collector’scompliance based on our examination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the Tax Collector’s compliance with those requirements and performing suchother procedures as we considered necessary in the circumstances. We believe that ourexamination provides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the Tax Collector’s compliance with specified requirements.
In our opinion, the Tax Collector complied, in all material respects, with the aforementionedrequirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
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MANAGEMENT LETTER
Honorable Rhonda SkipperTax CollectorWalton County, Florida
Report on the Special Purpose Financial Statements
We have audited the special purpose financial statements of the Walton County, Florida TaxCollector (the Tax Collector), as of and for the fiscal year ended September 30, 2015, and haveissued our report thereon dated June 21, 2016.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of theAuditor General.
Other Reports and Schedule
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Special Purpose Financial StatementsPerformed in Accordance with Government Auditing Standards; and Independent Accountant’sReport on an examination conducted in accordance with AICPA Professional Standards, Section 601,regarding compliance requirements in accordance with Chapter 10.550, Rules of the AuditorGeneral. Disclosures in those reports and schedule, which are dated June 21, 2016 should beconsidered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in thepreceding annual financial audit report. Corrective actions have been taken to address findings andrecommendations made in the preceding annual financial audit report.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. See finding 2015 01 below for ourfindings and recommendations.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the special purpose financial statements that is less than materialbut which warrants the attention of those charged with governance. See finding 2015 01 below.
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2015 01: Road & Bridge Tax Distributions to the City of Defuniak Springs, Florida
Florida Statute Section 197.383 Distribution of Taxes states “The Tax Collector shall distributetaxes collected for each taxing authority at least four times during the first 2 months after the taxroll comes into his or her possession for collection …”
Florida Statute §336.59 Levy of tax for road and bridge purposes; portion to municipalities section(2) states “One half the amount realized from such special tax on the property in incorporated citiesand towns shall be turned over to such cities …”
Finding – During fiscal year 2015 the Tax Collector made distributions to the City of DefuniakSprings, Florida of approximately $26,034 of the County’s fiscal year 2015 “Road & Bridge” advalorem tax collections. Though Florida Statute §336.59 section 2 authorizing the remittances to theCity was appealed in 1984 the distributions continued through fiscal year 2015. Public recordsindicated that the County had been distributing a portion of the Road and Bridge tax to the Citysince 1916.
Following the above noted distributions, the Tax Collector notified the Board of CountyCommissioners (“the Board”) of the distributions and inquired as to the authorization for thedistributions. The Board concluded the distributions were not appropriated and should not havebeen made.
There have been no subsequent distributions of Road and Bridge taxes to the City or action by theBoard or Tax Collector to recovery the above noted distributions.
Recommendation – Controls should be implemented documenting the source, authorization, andlegal authority for all ad valorem tax collections and distributions. These controls shouldincorporate a second documented review and approval performed by a senior level manager.
The Tax Collector provided documentation for FY 2013 and 2014, of the tax roll recap anddistribution reports provided to the Board in June of 2013 and 2014. However, the 2015 recap anddistribution report was not submitted to the Board. We recommend the recap and distributionreport be provided annually to each taxing authority along with a signed acknowledgment ofreceipt, and review by the various taxing agencies.
View of Responsible Officials and Planned Corrective Action –
We are in receipt of the 2015 Audited Special Purpose Financial Statements for our office. Aftermuch discussion related to Finding 2015 01 in the Management Letter, we find it necessary toobject to the finding against the Walton County Tax Collector (“Tax Collector”).
While we agree with your recommendation for the implementation of controls documenting thesource, authorization, and legal authority for all ad valorem tax collections and distributions, wecontend that the finding and recommendation set forth in the Management Letter should not beattributed to the Tax Collector, but rather to the Board of County Commissioners (“Board”). The TaxCollector has no authority to enact or discontinue taxation or the associated distributions. It is theresponsibility of the taxing authority, in this case the Board, to effectively and promptly notify theTax Collector that this distribution was no longer desired.
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The Tax Collector has provided the Board and the Clerk of Court for Walton County, Florida (“Clerk”)the annual ad valorem tax collections and distributions reports consistently since 2005. While saidreport was not sent in 2015, there was sufficient information provided to both the Board and theClerk to make them aware that the long standing distribution in question was being made. To date,the Board has taken no official action to question the legality or appropriateness of thedistributions. It is important to note, the distributions date back to the early 1900s.
The Tax Collector will continue to provide the annual recap and distribution report to the Board andthe Clerk, per the recommendation. However, it is our position that the Board, not the TaxCollector, should implement the controls discussed in the Management Letter.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, the Tax Collector and applicablemanagement, and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
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Supervisor of ElectionsWalton County, Florida
______________________
Special Purpose Financial Statements
For The Year Ended September 30, 2015
Walton County, FloridaSupervisor of Elections
Table of ContentsSeptember 30, 2015
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Page
INDEPENDENT AUDITORS’ REPORT 274 275
SPECIAL PURPOSE FINANCIAL STATEMENTS
Special Purpose Balance Sheet – Governmental Funds 276
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Governmental Funds 277
Special Purpose Statement of Revenues, Expenditures and Changes inFund Balance – Budget and Actual – General Fund 278
Special Purpose Statement of Net Position Proprietary Fund –Governmental Activities, Internal Service Fund 279
Special Purpose Statement of Revenues, Expenses and Changes in NetPosition Proprietary Fund – Governmental Activities, Internal Service Fund 280
Special Purpose Statement of Cash Flows Proprietary Fund –Governmental Activities, Internal Service Fund 281
Notes to Special Purpose Financial Statements 282 292
COMPLIANCE SECTION
Independent Auditors’ Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Special Purpose FinancialStatements Performed in Accordance with Government Auditing Standards 293 294
Independent Auditors’ Report on an Examination Conducted in Accordance withAICPA Professional Standards, Section 601, Regarding Compliance Requirementsin Accordance with Chapter 10.550, Rules of the Auditor General 295
MANAGEMENT LETTER 296 297
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INDEPENDENT AUDITORS' REPORT
Honorable Robert BeasleySupervisor of ElectionsWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the accompanying special purpose financial statements of the General Fund andproprietary fund type of the Walton County, Florida Supervisor of Elections (the “Supervisor ofElections”), as of and for the year ended September 30, 2015, and the related notes to the specialpurpose financial statements, which collectively comprise the Supervisor of Elections’ specialpurpose 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 special purposefinancial statements in accordance with accounting principles generally accepted in the UnitedStates of America; this includes the design, implementation, and maintenance of internal controlrelevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these special purpose financial statements based onour audit. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thespecial purpose financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the specialpurpose financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of thespecial purpose financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the specialpurpose financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
Opinion
In our opinion, the special purpose financial statements referred to above present fairly, in allmaterial respects, the respective financial position of the General Fund and proprietary fund type ofthe Supervisor of Elections as of September 30, 2015, and the respective changes in financialposition and the budgetary comparison for the General Fund for the year then ended in conformitywith accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the special purpose financial statements, the special purpose financialstatements referred to above were prepared solely for the purpose of complying with the Rules ofthe Auditor General of the State of Florida (“Rules”). In conformity with the Rules, theaccompanying special purpose financial statements are intended to present the financial positionand changes in financial position of the General Fund and proprietary fund type, only for thatportion of the General Fund and proprietary fund types of Walton County, Florida that isattributable to the Supervisor of Elections. They do not purport to, and do not, present fairly thefinancial position of Walton County, Florida as of September 30, 2015, and the changes in itsfinancial position for the fiscal year then ended in conformity with accounting principles generallyaccepted in the United States of America. Our opinion is not modified with respect to thesematters.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report on ourconsideration of the Supervisor of Elections’ internal control over financial reporting and on ourtests of its compliance with certain provisions of laws, rules, regulations, contracts and grantagreements and other matters included under the heading Independent Auditors’ Report OnInternal Control Over Financial Reporting And On Compliance and Other Matters Based On An AuditOf The Financial Statements Performed In Accordance With Government Auditing Standards. Thepurpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on internalcontrol over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the Supervisor'sinternal control over financial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
Walton County, FloridaSupervisor of Elections
Special Purpose Balance Sheet – Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.276
General Fund
AssetsCash and cash equivalents 75,352$Prepaid items 14,007
Total assets 89,359$
Liabilities and Fund BalanceLiabilitiesAccounts payable 2,572$Wages and benefits payable 24,371Due to Board of County Commissioners 62,416
Total liabilities 89,359
Fund balance
Total liabilities and fund balance 89,359$
Walton County, FloridaSupervisor of Elections
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Governmental Funds
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.277
General Fund
RevenuesAppropriations from Board of County Commissioners 668,268$Intergovernmental 12,373Miscellaneous revenues 24,568
Total revenues 705,209
ExpendituresGeneral governmentPersonnel services 454,402Operating 154,066Capital outlay 34,325
Total expenditures 642,793
Excess Revenues Over Expenditures 62,416
Other Financing Sources (Uses)Reversion to Board of County Commissioners 62,416
Net change in fund balance
$
Fund Balance beginning
Fund Balance ending
Walton County, FloridaSupervisor of Elections
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Budget and Actual – General Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.278
VarianceWith
Final BudgetOriginalBudget Final Budget Actual
Positive(Negative)
RevenuesAppropriations from Board ofCounty Commissioners 669,768$ 668,321$ 668,268$ (53)$
Intergovernmental 10,157 12,886 12,373 (513)Miscellaneous revenues 1,447 24,568 23,121
Total revenues 679,925 682,654 705,209 22,555
ExpendituresGeneral governmentPersonnel services 492,263 463,345 454,402 8,943Operating 161,242 179,983 154,066 25,917Capital outlay 26,420 39,326 34,325 5,001
Total expenditures 679,925 682,654 642,793 39,861
Excess of Revenues OverExpenditures 62,416 62,416
Other Financing Sources (Uses)Reversion to Board ofCounty Commissioners (62,416) (62,416)
Net change in fund balance
Fund Balance beginning
Fund Balance ending $ $ $ $
Budgeted Amounts
Walton County, FloridaSupervisor of Elections
Special Purpose Statement of Net Position Proprietary FundSeptember 30, 2015
See accompanying notes to special purpose financial statements.279
GovernmentalActivities
Internal ServiceFund
AssetsCash and cash equivalents 29,390$
LiabilitiesCurrent liabilitiesAccrued compensated absences 2,939
Non current liabilitiesAccrued compensated absences 26,451
Total liabilities 29,390
Net position $
Walton County, FloridaSupervisor of Elections
Special Purpose Statement of Revenues, Expensesand Changes in Net Position Proprietary Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.280
GovernmentalActivities
Internal ServiceFund
Operating RevenuesCharges for services 1,179$
Operating ExpensesPersonnel services 1,179
Change in net position
$Net Position ending
Net Position beginning
Walton County, FloridaSupervisor of Elections
Special Purpose Statement of Cash FlowsProprietary Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.281
GovernmentalActivities
Internal ServiceFund
Cash Provided by (Used in) Operating ActivitiesFunding of compensated absences liability 1,179$Payments on compensated absences liability (3,187)
Net decrease in cash and cash equivalents (2,008)
Cash and cash equivalents at the beginning of the year 31,398
Cash and cash equivalents at the end of the year 29,390$
Reconciliation of Change in Net Position to Net CashProvided by (Used in) Operating ActivitiesChange in net position $
Decrease in liabilities:Compensated absences payable (2,008)
(2,008)$Net Cash Used in Operating Activities
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Notes To Special Purpose Financial Statements
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The special purpose financial statements of the Walton County, Florida Supervisor of Elections (the“Supervisor of Elections”) have been prepared in accordance with the accounting principles andreporting guidelines established by the Governmental Accounting Standards Board (GASB),accounting principles generally accepted in the United States of America (GAAP), and accountingpractices prescribed by Chapter 10.550, Rules of the Auditor General, State of Florida. The moresignificant of these governmental accounting policies applicable to the Supervisor of Elections aredescribed below.
Reporting Entity
The Supervisor of Elections is an elected official established pursuant to Article VIII Section 1(d) ofthe constitution of the State of Florida and serves the geographic boundary established in FloridaStatutes chapter 7.66. The Supervisor of Elections’ special purpose financial statements do notpurport to reflect the financial position or the results of operations of Walton County, Florida (theCounty) taken as a whole. Pursuant to GASB Codification of Governmental Accounting and FinancialReporting Standards, Section 2100 and 2600, the Supervisor of Elections’ financial statements arecombined with those of the Board of County Commissioners (the “Board”) and other electedconstitutional officers into the reporting entity of the County.
Although the Supervisor of Elections’ office is operationally autonomous from the Board, it does nothold sufficient corporate powers of its own to be considered a legally separate entity for financialreporting purposes. Therefore, the Supervisor of Elections is reported as part of the primarygovernment of the County.
Basis of Presentation
As permitted by Chapter 10.556(4), Rules of the Auditor General State of Florida, the specialpurpose financial statements consist of only the fund level financial statements as defined in GASBCodification of Governmental Accounting and Financial Reporting Section 2200.102, and do notinclude presentations of government wide financial statements of the Supervisor of Elections.
In preparing these special purpose financial statements the following is reported as a majorgovernmental fund:
General Fund – The General Fund is used to account for all revenue and expenditures applicableto the general operations of the Supervisor of Elections that are not required either legally or bygenerally accepted accounting principles to be accounted for in another fund.
The Supervisor of Elections also reported the following fund type.
Internal Service Fund – The internal service fund (a proprietary fund) is used to report fundedand accrued compensated absences.
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Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures are recognized in theaccounts and reported in the financial statements. It relates to the timing of the measurementsmade, regardless of the measurement focus applied.
All governmental fund financial statements are reported using a current financial resourcesmeasurement focus on a modified accrual basis of accounting. The major modifications to theaccrual basis are: (a) revenues are recorded in the accounting period in which they becomeavailable and measurable (available means collectible within the current period or soon enoughthereafter to be used to pay liabilities of the current period, considered to be sixty days for propertytaxes and ninety days for all other revenue) and (b) expenditures are recorded in the accountingperiod in which the liability is incurred, if measurable except for accumulated sick and vacationcompensation which is expensed when paid.
Proprietary funds (the internal service fund) are reported using the accrual basis of accounting.Proprietary funds distinguish operating revenues and expenses from non operating items.Operating revenues and expenses generally result from providing services and producing anddelivering goods in connection with the proprietary fund’s principle ongoing operations. Theprinciple operating revenues of the Supervisor of Elections’ internal service fund are charges tofunds related to the Supervisor of Elections compensated absences activity. Operating expenses forthe internal service fund include recognition of changes in the compensated absences liabilities. Allrevenues and expenses not meeting these definitions are reported as non operating revenues andexpenses.
Measurement Focus
The accounting and financial reporting treatment applied to the fixed assets and long termliabilities associated with a fund are determined by its measurement focus. All governmental fundsare accounted for on a spending or “financial flow” measurement focus. This means that, generally,only current assets and current liabilities are included in the balance sheet. Governmental fundoperating statements present increases (revenues and other financing sources) and decreases(expenditures and other financing uses) in net current assets. Accordingly, they present a summaryof sources and uses of “available spendable resources” during a period.
The operations of the Supervisor of Elections are funded by the Board. The receipts from the Boardare recorded as appropriations on the Supervisor of Elections’ financial statements and asexpenditures on the Board’s financial statements. Any excess of revenue and other financingsources received over expenditures are remitted to the Board at year end.
Impact of Recently Issued Accounting Pronouncements
New Accounting Standards Adopted
In fiscal year 2015, the Walton County Supervisor of Elections’ adopted three (3) new statements offinancial accounting standards issued by the Governmental Accounting Standards Board:
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• GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment ofGASB Statement No. 27
• GASB Statement No. 69, Government Combinations and Disposals of Government Operations• GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date—an amendment of GASB Statement No. 68
GASB Statement No. 68 establishes standards of accounting and financial reporting, but not fundingor budgetary standards, for defined benefit pensions and defined contribution pensions provided tothe employees of state and local governmental employers through pension plans that areadministered through trusts or equivalent arrangements. This Statement replaces therequirements of Statement No. 27, Accounting for Pensions by State and Local GovernmentalEmployers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate topensions that are provided through pension plans within the scope of the Statement.
The requirements of Statement No. 68 apply to the financial statements of all state and localgovernmental employers whose employees (or volunteers that provide services to state and localgovernments) are provided with pensions through pension plans that are administered throughtrusts or equivalent arrangements, and to the financial statements of state and local governmentalnonemployer contributing entities that have a legal obligation to make contributions directly tosuch pension plans. This Statement establishes standards for measuring and recognizing liabilities,deferred outflows of resources, and deferred inflows of resources, and expense/expendituresrelated to pensions. Note disclosure and RSI requirements about pensions also are addressed. Fordefined benefit pensions, this Statement identifies the methods and assumptions that should beused to project benefit payments, discount projected benefit payments to their actuarial presentvalue, and attribute that present value to periods of employee service.
The adoption of Statement No. 68 has no impact on the Walton County Supervisor of Elections’governmental fund financial statements, which continue to report expenditures in the amount ofthe actuarially determined contributions, as required by State law. The calculation of pensioncontributions is unaffected by the change. However, the adoption has resulted in the restatementof the Walton County’s Fiscal Year 2014 government wide financial statements to reflect thereporting of net pension liabilities and deferred inflows of resources and deferred outflows ofresources for each of its qualified pension plans and the recognition of pension expense inaccordance with the provisions of the Statement. There was no impact on the Walton CountySupervisor of Elections’ financial statements as a result of the implementation of Statement No. 68.
GASB Statement No. 69 improves financial reporting by addressing accounting and financialreporting for government combinations and disposals of government operations. The term“government combinations” is used to refer to a variety of arrangements including mergers andacquisitions. Mergers include combinations of legally separate entities without the exchange ofsignificant consideration. Government acquisitions are transactions in which a governmentacquires another entity, or its operations, in exchange for significant consideration. Governmentcombinations also include transfers of operations that do not constitute entire legally separateentities in which no significant consideration is exchanged. Transfers of operations may be present
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in shared service arrangements, reorganizations, redistricting, annexations, and arrangements inwhich an operation is transferred to a new government created to provide those services. Therewas no impact on the Walton County Supervisor of Elections’ financial statements as a result of theimplementation of Statement No. 69.
GASB Statement No. 71 amends Statement No. 68 to require that, at transition, a governmentrecognize a beginning deferred outflow of resources for its pension contributions, if any, madesubsequent to the measurement date of the beginning net pension liability. There was no impacton the Walton County Supervisor of Elections’ financial statements as a result of theimplementation of Statement No. 71.
Accounting Standards Issued But Not Yet Effective
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. GASBStatement No. 72 requires the Walton County Supervisor of Elections’ to use valuation techniqueswhich are appropriate under the circumstances and are either a market approach, a cost approachor an income approach. Statement No. 72 establishes a hierarchy of inputs used to measure fairvalue consisting of three levels. Level 1 inputs are quoted prices in active markets for identicalassets or liabilities. Level 2 inputs are inputs, other than quoted prices included within Level 1, thatare observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservableinputs, such as management’s assumption of the default rate among underlying mortgages of amortgage backed security. Statement No. 72 also contains note disclosure requirements regardingthe hierarchy of valuation inputs and valuation techniques that was used for the fair valuemeasurements. The Walton County Supervisor of Elections has not completed the process ofevaluating the impact of GASB Statement No. 72 on its financial statements.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions andRelated Assets That Are Not within the Scope of GASB Statement 68, and Amendments to CertainProvisions of GASB Statements 67 and 68. The requirements of this statement extend the approachto accounting and financial reporting established in Statement No. 68 to all pensions to reflect thatfor accounting and financial reporting purposes, any assets accumulated for pensions that areprovided through pension plans that are not administered through trusts that meet the criteriaspecified in Statement No. 68 should not be considered pension plan assets. It also requires thatinformation similar to that required by Statement 68 be included in notes to financial statementsand required supplementary information by all similarly situated employers and nonemployercontributing entities. The provisions of Statement No. 73 that address accounting and financialreporting by employers and governmental nonemployer contributing entities for pensions that arenot within the scope of Statement No. 68 are effective for financial statements for fiscal yearsbeginning after June 15, 2016, and the requirements of this statement that address financialreporting for assets accumulated for purposes of providing those pensions are effective for fiscalyears beginning after June 15, 2015. The requirements of Statement No. 73 for pension plans thatare within the scope of Statement No. 67 or for pensions that are within the scope of Statement No.68 are effective for fiscal years beginning after June 15, 2015. Earlier application is encouraged. TheWalton County Supervisor of Elections has not completed the process of evaluating the impact ofStatement No. 73 on its financial statements.
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In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit PlansOther Than Pension Plans. The scope of this statement includes defined benefit and definedcontribution OPEB plans administered through trusts that meet specified criteria. This statementestablishes financial reporting standards for state and local governmental other postemploymentbenefit (“OPEB”) plans. The Statement replaces Statements No. 43, Financial Reporting forPostemployment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEBMeasurements by Agent Employers and Agent Multiple Employer Plans. Statement No. 74 iseffective for financial statements for fiscal years beginning after June 15, 2016. Earlier application isencouraged. The Walton County Supervisor of Elections has not completed the process ofevaluating the impact of Statement No. 74 on its financial statements.
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (OPEB). This statement addresses accounting andfinancial reporting for OPEB that is provided to the employees of state and local governmentalemployees. This Statement also establishes standards for recognizing and measuring liabilities,deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Fordefined benefit OPEB plans this statement identifies the methods and assumptions that arerequired to be used to project benefit payments, discount projected benefit payments to theiractuarial present value, and attribute that present value to periods of employee service. Notedisclosures and required supplementary information are also addressed by the statement. Thisstatement replaces the requirements of Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and Statement No. 57,OPEB Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. StatementNo. 75 is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged.The Walton County Supervisor of has not completed the process of evaluating the impact ofStatement No. 75 on its financial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted AccountingPrinciples for State and Local Governments. This statement reduces the GAAP hierarchy to twocategories of authoritative GAAP and addresses the use of authoritative and nonauthoritativeliterature in the event that the accounting treatment for a transaction or other event is notspecified within a source of authoritative GAAP. This statement supersedes Statement No. 55, TheHierarchy of Generally Accepted Accounting Principles for State and Local Governments. It alsoamends Statement No. 62, Codification of accounting and financial Reporting Guidance Containedin Pre November 30, 1989 FASB and AICPA Pronouncements, paragraph 64, 74, and 82. Theprovisions of Statement No. 76 are effective for financial statements for periods beginning afterJune 15, 2015. Earlier application is permitted. The Walton County Supervisor of has not completedthe process of evaluating the impact of Statement No. 76 on its financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. For financial reportingpurposes, this statement defines tax abatement and contains required disclosures about a reportinggovernment’s own tax abatement agreements and those that are entered into by othergovernments and that reduce the reporting government’s tax revenues. The requirements of GASBStatement No. 77 are effective for financial statements for periods beginning after December 15,2015. Earlier application is encouraged. The Walton County Supervisor of has not completed theprocess of evaluating the impact of Statement No. 77 on its financial statements.
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Budgetary Requirements
Florida Statutes Chapter 129.201 and 129.03 details the preparation, adoption and administrationof the Supervisor of Elections’ annual budget. By June 1 of each year, the Supervisor of Electionsshall certify to the Board a proposed budget of expenditures for carrying out the duties of his officefor the ensuing fiscal year. The Board has until September 30 to approve and/or modify theSupervisor of Elections proposed budget during hearings held pursuant to Florida Statutes 129. Thebudgeted revenues and expenditures in the accompanying financial statements reflect allamendments approved by the Board. Budgetary control is maintained at the major objectexpenditure level. Expenditures may not legally exceed appropriations at the department level, andappropriations lapse at year end. Budgetary changes within major object expenditure categoriesare made at the discretion of the Supervisor of Elections.
Inventories and Prepaid Items
The purchase method is used to account for inventory and payments to vendors for costs applicableto future periods (prepaid). Under the purchase method, expenditures are recognized when theavailable financial resource is expended. Inventory is not deemed significant and therefore noamount has been reported.
Capital Assets
Capital assets, including property, plant, and equipment, are recorded as expenditures in theGeneral Fund at the time an asset is acquired. Capital assets are capitalized at cost when purchasedand fair market value if donated. Title in all capital assets owned by the County is retained by theBoard and the Supervisor of Election’s capital assets are reported on the County wide financialstatements. See Note 3 for detailed capital asset activity. The Supervisor of Elections maintainscustodial responsibility for the capital assets used by his office.
The County maintains a $5,000 threshold for capitalization of equipment and other improvements.Additionally, the Supervisor of Elections maintains an inventory of all tangible personal propertywith a donated value or cost of $1,000 or more and a projected useful life of one year or more asrequired by Florida Statute 274 and Florida Administrative Code Sections 69(i) 73.002 and 69(i)73.006.
Depreciation has been provided using the straight line method with an estimated useful life ofthree to five years for all tangible personal property. The Supervisor of Elections did not report anyland, buildings, or improvements.
Compensated Absences
It is the Supervisor of Elections' policy to allow employees to accumulate 240 hours of annual leaveall of which is allowed for payment upon separation. Employees will receive pay for their unused
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sick leave accrued up to a maximum of 240 hours. Expenditures of compensated absences ingovernmental funds are those paid during the current fiscal year and the amount unpaid at the endof the reporting period that normally would be liquidated with expendable available financialresources. Liabilities and expenses for compensated absences are recorded in the internal servicefund.
Governmental Fund Balances
Fund balances are classified either as nonspendable or as spendable. Spendable fund balances arefurther classified in a hierarchy based on the extent to which there are external and internalconstraints on the spending of these fund balances. These classifications are described as follows:
Nonspendable fund balances include amounts that cannot be spent because they are not inspendable form or legally or contractually required to be maintained intact. There were nononspendable fund balances at the Supervisor of Elections as of September 30, 2015.
Spendable fund balances are classified based on a hierarchy of the County’s ability to control thespending of these fund balances, and at September 30, 2015 the Supervisor of Elections had nospendable fund balances.
Restricted fund balances are fund balance amounts that are constrained for specific purposeswhich are externally imposed by creditors, grantors, contributors, or laws of regulations orimposed by law through constitutional provisions or enabling legislation.
Committed fund balances are fund balances intended to be used for specific purposes, butwhich are neither restricted nor committed.
Assigned fund balances are fund balances intended to be used for specific purposes imposed bythe Supervisor of Elections formal action of highest level of decision making authority.
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, orassigned. In funds other than the General Fund, unassigned fund balances are limited tonegative residual balances. As of September 30, 2015, the Supervisor of Elections had nounassigned fund balances because all excess revenues within the General Fund are required tobe remitted to the Board of County Commissioners.
When expenditures are incurred for purposes for which restricted or unrestricted fund balanceclassifications could be used, it is the Supervisor of Elections’ policy to use restricted funds first,then unrestricted.
Management Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimates and assumptions that
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affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand as well as demand deposits. At September 30,2015, all cash and cash equivalents were on hand or being held in demand deposit bank accounts.
Custodial Risk
The Supervisor of Elections does not have a written investment policy but historically has limitedavailable investments to cash and cash equivalents. At year end, all cash held in demand depositswas fully insured by the Federal Deposit Insurance Corporation and the multiple financialinstitutions collateral pool required by Sections 280, Florida Statutes.
Credit and Interest Rate Risk
The Supervisor of Elections adheres to the investment policy adopted by the Board, thereby limitingits exposure to both credit and interest rate risk as noted below. Concentration of credit risk is therisk of loss attributable to the quantity of the Supervisor of Elections’ investments in a single issuer.
The Supervisor of Elections’ deposits are held in a public funds net interest bearing checkingaccount, paying interest at the current federal funds rate less five (5) basis points with no reserverequirements. Balances in the account are fully collateralized in compliance with applicable Statestatutes.
NOTE 3 – CAPITAL ASSETS
Capital asset activity for the fiscal year is as follows:
Balance Balance10/1/2014 Additions Deletions 9/30/2015
Governmental ActivitiesCapital assets depreciated:Machinery, equipment, and improvements 368,540$ 8,382$ $ 376,922$Less: accumulated depreciation:Machinery, equipment, and improvements (368,540) (233) (368,773)
Total governmental activitiescapital assets, net $ 8,149$ $ 8,149$
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Title in all capital assets owned by the County is retained by the Board and the above noted capitalasset information and activity has been reported on the County wide financial statements.
Depreciation expense to be reported by the County was charged to the functions of thegovernment as follows:
Governmental ActivitiesGeneral government $ 233
NOTE 4 – LONG TERM DEBT
The following is a summary of changes in long term debt:
CompensatedAbsences
Balance, October 1, 2014 31,398$Additions 1,179Deletions (3,187)
Balance, September 30, 2015 29,390Less current portion (2,939)
Long term balance 26,451$
The internal service fund is designed to record the annual cost related to the Supervisor ofElections’ compensated absences policies, to record the short term and long term components ofsuch liabilities, and to collect and hold cash to liquidate such liabilities. The related cost associatedwith the fund will be recovered via charges to the General Fund.
NOTE 5 – LEASES
The Supervisor of Elections is a party to various leases which are classified as operating leases.Total rent for all leases totaled $10,374 for the year ended September 30, 2015.
Future minimum lease payments under noncancelable operating leases with initial or remainingterms of one year or more are as follows:
2016 6,797$2017 6,0602018 3,771
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NOTE 6 – EXCESS REVENUE
Pursuant to Section 129.202(1)(f), Florida Statutes, “all unexpended balances at the end of eachfiscal year shall be returned to the Board of County Commissioners and deposited to the countyfund or funds from which payment was originally made.” Excess revenues over expenditures werereturned to the Board by October 31, 2015 as required by Florida Statutes. Total excess feestransferred to the Board for the year ended September 30, 2015 totaled $62,416.
NOTE 7 – RETIREMENT PLAN
The Supervisor of Elections and all full time employees are participants in the Florida RetirementSystem (the “System”), a defined benefit, cost sharing, multiple employer public retirement system,which is controlled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida. Accordingly, the actuarial information and relateddisclosures attributable to the Supervisor of Elections' employees are not determinable.
The System's funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentage of payroll employercontribution rates, established by state law, is determined using the entry age actuarial fundingmethod. If an unfunded actuarial liability reemerges, future plan benefit changes, assumptionchanges, and methodology changes are amortized within 30 years, using level dollar amounts.
Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses areamortized on a rolling 10% basis, as a level dollar amount.
The System provides for employees hired before July 1, 2011 vesting of benefits after six years ofcreditable service. Normal retirement benefits are available to employees who retire at or after age62 with six or more years of service. Early retirement is available after six years of service with a 5%reduction of benefits for each year prior to the normal retirement age. For those employees hiredon July 1, 2011 or after, the System provides for vesting of benefits after eight years of creditableservice. Normal retirement benefits are available to these employees who retire at or after age 65with eight years of service with a 5% reduction of benefits for each year. Retirement benefits arebased upon age, average compensation and years of service credit where average compensation iscomputed as the average of an individual's five highest years of earnings.
Participating employer contributions are based upon state wide rates established by the State ofFlorida. These rates applied to employee salaries at year end are as follows: regular employees –7.26%, DROP Program – 12.88%, senior management – 21.43% and elected officials – 42.27%. Theserates applied to employee salaries at year end for employee contributions are 3.00% for allclassifications, with the exception of the DROP program.
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Notes To Special Purpose Financial Statements
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Total payroll for the Supervisor of Elections' employees covered by the System was $306,441 for theyear ended September 30, 2015. The Supervisor of Elections' total payroll was $365,351 for thesame period. The Supervisor of Elections' contributions to the plan for the years ended September30, 2015, 2014, and 2013 were $62,161 $53,795, and $27,377, respectively. These contributionswere paid by the due date for the contribution.
The Supervisor of Elections has no responsibility to the System other than to make the periodicpayments required by State Statutes. The Florida Division of Retirement issues a publicly availablefinancial report that includes financial statements and required supplementary information for theSystem. The report may be obtained by writing Florida Division of Retirement, P.O. Box 9000,Tallahassee, FL 32315 9000 or at the Division’s website at dms.myflorida.com.
NOTE 8 – POST EMPLOYMENT BENEFITS OTHER THAN PENSION
In addition to the retirement plan in Note 7, the County, in accordance with Section 112.0801,Florida Statutes, provides post retirement health care benefits to all retired employees whoparticipated in its group health plan while employed. Employees of the Supervisor of Elections arecovered under the County’s plan. The County is required to measure and recognize the annual costof the future benefits and calculate the annual employer funding requirements and, to the extentfunding is not made by the County recognize another post employment benefit (OPEB) liability onthe balance sheet of the County. These amounts, if any, are recorded in the County’s governmentwide financial statements.
NOTE 9 – CONTINGENT LIABILITIES
The Supervisor of Elections receives grants from federal and state sources that are subject to reviewand audit by the funding sources. Such reviews and audits could result in the discovery ofunallowable activities and unallowable costs. Consequently, any of the funding sources may, attheir discretion, request reimbursement for expenses or return of funds, or both, as a result ofnoncompliance by the Supervisor of Elections with the terms of the grants/contracts. In the opinionof the Supervisor of Elections’ management, such allowances, if any, would not be significant inrelation to the special purpose financial statements of the Supervisor of Elections.
NOTE 10 – SUBSEQUENT EVENTS
The Supervisor of Elections has evaluated subsequent events through the date of issuance of thesespecial purpose financial statements and has determined that no events occurring subsequent toyear end warranted disclosure.
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INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Robert BeasleySupervisor of ElectionsWalton County, Florida
We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the special purpose financialstatements of the Walton County, Florida Supervisor of Elections (the “Supervisor of Elections”) asof and for the year ended September 30, 2015, and the related notes to the special purposefinancial statements, and have issued our report thereon dated June 21, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the special purpose financial statements, we consideredthe Supervisor of Elections’ internal control over financial reporting (internal control) to determinethe audit procedures that are appropriate in the circumstances for the purpose of expressing ouropinions on the special purpose financial statements, but not for the purpose of expressing anopinion on the effectiveness of the Supervisor of Elections’ internal control. Accordingly, we do notexpress an opinion on the effectiveness of the Supervisor of Elections’ internal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or acombination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or, significant deficiencies. Given these limitations, during our audit we did notidentify any deficiencies in internal control that we consider to be material weaknesses. However,material weaknesses may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Supervisor of Elections' specialpurpose financial statements are free of material misstatement, we performed tests of itscompliance with certain provisions of laws, regulations, contracts and grant agreements,noncompliance with which could have a direct and material effect on the determination of financialstatement amounts. However, providing an opinion on compliance with those provisions was notan objective of our audit and, accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reportedunder Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
295
INDEPENDENT AUDITOR’S REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Robert BeasleySupervisor of ElectionsWalton County, Florida
We have examined the Walton County, Florida Supervisor of Elections’ (the “Supervisor ofElections”) compliance with the requirements of Section 218.415, Florida Statutes, LocalGovernment Investment Policies, during the year ended September 30, 2015. Management isresponsible for the Supervisor of Elections’ compliance with those requirements. Our responsibilityis to express an opinion on the Supervisor of Elections’ compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the Supervisor of Elections’ compliance with those requirements andperforming such other procedures as we considered necessary in the circumstances. We believethat our examination provides a reasonable basis for our opinion. Our examination does notprovide a legal determination on the Supervisor of Elections’ compliance with specifiedrequirements.
In our opinion, the Supervisor of Elections complied, in all material respects, with theaforementioned requirements for the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
296
MANAGEMENT LETTER
Honorable Robert BeasleySupervisor of ElectionsWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the special purpose financial statements of the Walton County, Florida Supervisorof Elections (the “Supervisor of Elections”) as of and for the fiscal year ended September 30, 2015,and have issued our report thereon dated June 21, 2016.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America, and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and chapter 10.550Rules of the Florida Auditor General.
Other Reports and Schedule
We have issued our Independent Auditor’s Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Special Purpose Financial StatementsPerformed in Accordance with Government Auditing Standards and Independent Accountant’sReport on an Examination Conducted In Accordance with AICPA Professional Standards, Section601, Regarding Compliance Requirements in Accordance with Chapter 10.550, Rules of the AuditorGeneral. Disclosures in those reports, which are dated June 21, 2016, should be considered inconjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address significant findings and recommendations made inthe preceding annual financial audit report. There were no findings and recommendations made inthe preceding annual financial audit report.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, wedid not have any such recommendations.
297
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less than material but whichwarrants the attention of those charged with governance. In connection with our audit, we did nothave any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, federal and other granting agencies, the Supervisor of Elections, and applicablemanagement and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
298
SheriffWalton County, Florida
______________________
Special Purpose Financial Statements
For The Year Ended September 30, 2015
Walton County, FloridaSheriff
Table of ContentsSeptember 30, 2015
299
Page
INDEPENDENT AUDITORS’ REPORT 300 – 302
SPECIAL PURPOSE FINANCIAL STATEMENTS
Special Purpose Balance Sheet – Governmental Funds 303
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balances – Governmental Funds 304
Special Purpose Statement of Revenues, Expenditures, and Changes inFund Balance – Budget and Actual – General Fund 305
Special Purpose Statement of Fiduciary Net Position 306
Notes to Special Purpose Financial Statements 307 – 320
COMBINING AND INDIVIDUAL FUND STATEMENTS
Description of Nonmajor Governmental Funds 321
Combining Special Purpose Balance Sheet – Nonmajor Governmental Funds 322
Combining Special Purpose Statement of Revenues, Expenditures, andChanges in Fund Balances – Nonmajor Governmental Funds 323
Description of Fiduciary Funds 324
Combining Special Purpose Statement of Fiduciary Net Position – Agency Funds 325
Combining Special Purpose Statement of Changes in Fiduciary NetPosition – Agency Funds 326
COMPLIANCE SECTION
Independent Auditors’ Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on an Audit of Special PurposeFinancial Statements Performed in Accordance with Government AuditingStandards 327 – 328
Independent Accountants’ Report on an Examination Conducted in Accordancewith AICPA Professional Standards, Section 601, Regarding ComplianceRequirements in Accordance with Chapter 10.550 of the Auditor General 329
MANAGEMENT LETTER 330 – 331
300
INDEPENDENT AUDITORS' REPORT
Honorable Michael A. Adkinson, Jr.SheriffWalton County, Florida
Report on Special Purpose Financial Statements
We have audited the accompanying special purpose financial statements of each major fund, theaggregate remaining nonmajor governmental funds and fiduciary fund type of the Walton County,Florida Sheriff (the “Sheriff”), as of and for the year ended September 30, 2015, and the relatednotes to the special purpose financial statements, which collectively comprise the Sheriff’s specialpurpose 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 special purposefinancial statements in accordance with accounting principles generally accepted in the UnitedStates of America; this includes the design, implementation, and maintenance of internal controlrelevant to the preparation and fair presentation of special purpose financial statements that arefree from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these special purpose financial statements based onour audit. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thespecial purpose financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose financial statements. The procedures selected depend on theauditors’ judgment, including the assessment of the risks of material misstatement of the specialpurpose financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of thespecial purpose financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the specialpurpose financial statements.
301
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
Opinions
In our opinion, the special purpose financial statements referred to above present fairly, in allmaterial respects, the respective financial position of each major fund, the aggregate remainingnonmajor governmental funds and the fiduciary fund of the Walton County Sheriff as of September30, 2015, and the respective changes in financial position and budgetary comparison for theGeneral Fund for the year then ended in conformity with accounting principles generally acceptedin the United States of America.
Emphasis of Matter
As discussed in Note 1 to the special purpose financial statements, the special purpose financialstatements referred to above were prepared solely for the purpose of complying with the Rules ofthe Auditor General of the State of Florida. In conformity with the Rules, the accompanying specialpurpose financial statements are intended to present the financial position and changes in financialposition of each major fund, fiduciary fund types, and the remaining nonmajor fund information,only for that portion of the major funds, fiduciary fund types, and the remaining nonmajor fundinformation of Walton County, Florida that is attributable to the Sheriff. They do not purport to,and do not, present fairly the financial position of Walton County, Florida as of September 30, 2015,and the changes in its financial position for the fiscal year then ended in conformity with accountingprinciples generally accepted in the United States of America. Our opinion is not modified withrespect to these matters.
Other Matters
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the special purpose financialstatements that collectively comprise the Sheriff’s financial statements. The combining andindividual fund statements, as listed in the table of contents, are presented for purposes ofadditional analysis and are not a required part of the special purpose financial statements and wedo not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report on ourconsideration of the Sheriff's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, rules, regulations, contracts, and grant agreements andother matters included under the heading Independent Auditors’ Report on Internal Control OverFinancial Reporting and on Compliance and Other Matters Based on an Audit of the Special PurposeFinancial Statements Performed in Accordance With Government Auditing Standards. The purposeof that report is to describe the scope of our testing of internal control over financial reporting and
302
compliance and the results of that testing, and not to provide an opinion on the internal controlover financial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the Sheriff’s internal control overfinancial reporting and compliance.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
Walton County, FloridaSheriff
Special Purpose Balance Sheet – Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.
General FundInmate Canteen
Fund
AssetsCash and cash equivalents 1,074,946$ 408,859$Accounts receivable 19,292Interfund receivable 2,954 5,800Due from Board of County Commissioners 149,197Due from other governments 324,789
Total assets 1,551,886$ 433,951$
Liabilities and Fund BalancesLiabilitiesAccounts payable 450,012$ 42,075$Wages and benefits payable 460,189Interfund payable 92,309 2,945Unearned revenueDue to Board of County Commissioners 549,376 13,033Inmate deposits 8,073Due to individuals
Total liabilities 1,551,886 66,126
Fund balancesRestricted for:Public Safety Law Enforcement 367,825
Total liabilities and fund balances 1,551,886$ 433,951$
303
OtherGovernmental
Funds
TotalGovernmental
Funds
414,301$ 1,898,106$2,686 21,97886,474 95,228
149,197324,789
503,461$ 2,489,298$
7,743$ 499,830$460,189
128 95,382128 128
562,4098,073
32,996 32,996
40,995 1,659,007
462,466 830,291
503,461$ 2,489,298$
Walton County, FloridaSheriff
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balances – Governmental Funds
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.
General FundInmate Canteen
Fund
RevenuesAppropriations from Board of County Commissioners 26,160,332$ $Fines and forfeituresIntergovernmental 267,619Miscellaneous 13,000 269,826
Total revenues 26,440,951 269,826
ExpendituresPublic safetyPersonnel services 21,147,281 84,662Operating 4,573,810 98,606Capital outlay 616,558 43,318Debt servicePrincipal 99,832Interest 168
Total expenditures 26,437,649 226,586
Excess Revenues Over (Under) Expenditures 3,302 43,240
Other Financing Sources (Uses)Reversion to Board of County Commissioners (3,302)
Net change in fund balance 43,240
Fund Balance beginning 324,585
Fund Balance ending $ 367,825$
304
OtherGovernmental
Funds
TotalGovernmental
Funds
356,000$ 26,516,332$128,472 128,4728,676 276,29565,691 348,517
558,839 27,269,616
21,231,943142,127 4,814,543269,805 929,681
128,199 228,03119,373 19,541
559,504 27,223,739
(665) 45,877
(3,302)
(665) 42,575
463,131 787,716
462,466$ 830,291$
Walton County, FloridaSheriff
Special Purpose Statement of Revenues, Expenditures andChanges in Fund Balance – Budget and Actual – General Fund
For the Year Ended September 30, 2015
See accompanying notes to special purpose financial statements.305
Variance withBudgetary Final Budget
OriginalBudget
FinalBudget
BasisActual
Positive(Negative)
RevenuesAppropriations from Boardof County Commissioners 24,684,881$ 26,160,332$ 26,160,332$ $
ExpendituresPublic safetyPersonnel services 20,495,497 21,540,025 21,061,633 478,392Operating 4,152,389 4,441,511 4,378,839 62,672Capital outlay 36,995 178,796 616,558 (437,762)
Debt servicePrincipal 99,832 (99,832)Interest 168 (168)
Total expenditures 24,684,881 26,160,332 26,157,030 3,302
Excess Revenues Over (Under)Expenditures 3,302 3,302
Reversion to Board ofCounty Commissioners (3,302) (3,302)
Net change in fundbalance
Fund Balance beginning
Fund Balance ending $ $ $ $
Budgeted Amounts
Other Financing Sources (Uses)
Walton County, FloridaSheriff
Special Purpose Statement of Fiduciary Net PositionAgency Fund
September 30, 2015
See accompanying notes to special purpose financial statements.306
Agency Funds
AssetsCash 19,235$Interfund receivable 163
Total assets 19,398$
LiabilitiesDue to individuals 6,963$Interfund payable 9Due to other governments 12,426
Total liabilities 19,398$
Walton County, FloridaSheriff
Notes To Special Purpose Financial Statements
307
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The special purpose financial statements of the Walton County, Florida Sheriff (the “Sheriff”) havebeen prepared in accordance with the accounting principles and reporting guidelines established bythe Governmental Accounting Standards Board (GASB), accounting principles generally accepted inthe United States of America (GAAP), and accounting practices prescribed by Chapter 10.550, Rulesof the Auditor General, State of Florida. The more significant of these governmental accountingpolicies applicable to the Sheriff are described below.
Reporting Entity
The Sheriff is an elected official established pursuant to Article VIII Section 1(d) of the constitutionof the State of Florida and serves the geographic boundary established in Florida Statutes Chapter7.66. The Sheriff's special purpose financial statements do not purport to reflect the financialposition or the results of operations of Walton County, Florida (the “County”) taken as a whole.Pursuant to GASB Codification of Governmental Accounting and Financial Reporting Standards,Sections 2100 and 2600, the Sheriff's special purpose financial statements are combined with thoseof the Board of County Commissioners (the “Board”) and other elected officials into the reportingentity of the County.
Although the Sheriff's office is operationally autonomous from the Board, it does not hold sufficientcorporate powers of its own to be considered a legally separate entity for financial reportingpurposes. Therefore, the Sheriff’s special purpose financial statements are combined with those ofthe Board and other elected officials into the reporting entity of the County.
Basis of Presentation
As permitted by the Chapter 10.556(4), Rules of the Auditor General State of Florida, the specialpurpose financial statements consist of only the fund level financial statements as defined in GASBCodification of Governmental Accounting and Financial Reporting Standards, Section 2200.102, anddo not include presentations of government wide financial statements of the Sheriff.
In preparing these special purpose financial statements the following are reported as majorgovernmental funds:
General Fund – The General Fund is used to account for all revenue and expendituresapplicable to the general operations of the Sheriff that are not required either legally or bygenerally accepted accounting principles to be accounted for in another fund.
Inmate Canteen The Inmate Canteen Fund is a special revenue fund used to account forinmate canteen sales and phone commissions. Excess revenues over expenditures from theInmate Canteen Fund are used for inmate welfare.
Walton County, FloridaSheriff
Notes To Special Purpose Financial Statements
308
The Sheriff has nine additional special revenue funds which have been combined into a singleaggregate presentation as other governmental funds. Individual data for these non major funds isprovided in the combining statements of this report. Special revenue funds account for specificrevenue sources that are legally restricted to expenditures for specified purposes.
The Sheriff also reported the following fund type:
Agency Fund – Agency funds are custodial in nature and account for assets held in a trustcapacity or as an agent for individuals, other governmental units and/or other funds. Agencyfunds only report assets and liabilities and do not measure results of operations.
Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures are recognized in theaccounts and reported in the special purpose financial statements. It relates to the timing of themeasurements made, regardless of the measurement focus applied.
All governmental fund special purpose financial statements are reported using a current financialresources measurement focus on a modified accrual basis of accounting. The major modificationsto the accrual basis are: (a) revenues are recorded in the accounting period in which they becomeavailable and measurable (available means collectible within the current period or soon enoughthereafter to be used to pay liabilities of the current period, considered to be sixty days for propertytaxes and ninety days for all other revenue) and (b) expenditures are recorded in the accountingperiod in which the liability is incurred, if measurable, except for accumulated sick and vacationcompensation which are expensed when paid.
Fiduciary fund (agency fund) statements are prepared using economic resources measurementfocus and the accrual basis of accounting.
Measurement Focus
The accounting and financial reporting treatment applied to the fixed assets and long termliabilities associated with a fund are determined by its measurement focus. All governmental fundsare accounted for on a spending or "financial flow" measurement focus. This means that generally,only current assets and current liabilities are included in the balance sheet. Governmental fundoperating statements present increases (revenues and other financing sources) and decreases(expenditures and other financing uses) in net current assets. Accordingly, they present a summaryof sources and uses of "available spendable resources" during a period.
The portion of the Sheriff’s revenue that is a budget appropriation from the Board rather than acharge for services is reported as an appropriation by the Sheriff and as expenditures by the Board.Any excess of revenue and other financing sources received over expenditures are remitted to theBoard at year end.
Walton County, FloridaSheriff
Notes To Special Purpose Financial Statements
309
Impact of Recently Issued Accounting Pronouncements
Recently Issued and Adopted
In Fiscal Year 2015, the Sheriff adopted three (3) new statements of financial accounting standardsissued by the Governmental Accounting Standards Board:
• GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment ofGASB Statement No. 27
• GASB Statement No. 69, Government Combinations and Disposals of Government Operations• GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date—an amendment of GASB Statement No. 68
GASB Statement No. 68 establishes standards of accounting and financial reporting, but not fundingor budgetary standards, for defined benefit pensions and defined contribution pensions provided tothe employees of state and local governmental employers through pension plans that areadministered through trusts or equivalent arrangements. This Statement replaces therequirements of Statement No. 27, Accounting for Pensions by State and Local GovernmentalEmployers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate topensions that are provided through pension plans within the scope of the Statement.
The requirements of Statement No. 68 apply to the financial statements of all state and localgovernmental employers whose employees (or volunteers that provide services to state and localgovernments) are provided with pensions through pension plans that are administered throughtrusts or equivalent arrangements, and to the financial statements of state and local governmentalnonemployer contributing entities that have a legal obligation to make contributions directly tosuch pension plans. This Statement establishes standards for measuring and recognizing liabilities,deferred outflows of resources, and deferred inflows of resources, and expense/expendituresrelated to pensions. Note disclosure and RSI requirements about pensions also are addressed. Fordefined benefit pensions, this Statement identifies the methods and assumptions that should beused to project benefit payments, discount projected benefit payments to their actuarial presentvalue, and attribute that present value to periods of employee service. There was no impact on theSheriff’s special purpose financial statements as a result of the implementation of Statement No.68.
GASB Statement No. 69 improves financial reporting by addressing accounting and financialreporting for government combinations and disposals of government operations. The term“government combinations” is used to refer to a variety of arrangements including mergers andacquisitions. Mergers include combinations of legally separate entities without the exchange ofsignificant consideration. Government acquisitions are transactions in which a governmentacquires another entity, or its operations, in exchange for significant consideration. Governmentcombinations also include transfers of operations that do not constitute entire legally separateentities in which no significant consideration is exchanged. Transfers of operations may be presentin shared service arrangements, reorganizations, redistricting, annexations, and arrangements inwhich an operation is transferred to a new government created to provide those services. There
Walton County, FloridaSheriff
Notes To Special Purpose Financial Statements
310
was no impact on the Sheriff’s special purpose financial statements as a result of theimplementation of Statement No. 69.
GASB Statement No. 71 amends Statement No. 68 to require that, at transition, a governmentrecognize a beginning deferred outflow of resources for its pension contributions, if any, madesubsequent to the measurement date of the beginning net pension liability. There was no impacton the Sheriff’s special purpose financial statements as a result of the implementation of StatementNo. 71.
Recently Issued But Not Yet Effective
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application.Statement No. 72 requires the Sheriff to use valuation techniques which are appropriate under thecircumstances and are either a market approach, a cost approach or an income approach.Statement No. 72 establishes a hierarchy of inputs used to measure fair value consisting of threelevels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2inputs are inputs, other than quoted prices included within Level 1, that are observable for theasset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs, such asmanagement’s assumption of the default rate among underlying mortgages of a mortgage backedsecurity. Statement No. 72 also contains note disclosure requirements regarding the hierarchy ofvaluation inputs and valuation techniques that was used for the fair value measurements. TheSheriff has not completed the process of evaluating the impact of Statement No. 72 on its financialstatements.
In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions andRelated Assets That Are Not within the Scope of GASB Statement 68, and Amendments to CertainProvisions of GASB Statements 67 and 68. The requirements of this statement extend the approachto accounting and financial reporting established in Statement No. 68 to all pensions to reflect thatfor accounting and financial reporting purposes, any assets accumulated for pensions that areprovided through pension plans that are not administered through trusts that meet the criteriaspecified in Statement No. 68 should not be considered pension plan assets. It also requires thatinformation similar to that required by Statement 68 be included in notes to financial statementsand required supplementary information by all similarly situated employers and nonemployercontributing entities. The provisions of Statement No. 73 that address accounting and financialreporting by employers and governmental nonemployer contributing entities for pensions that arenot within the scope of Statement No. 68 are effective for financial statements for fiscal yearsbeginning after June 15, 2016, and the requirements of this statement that address financialreporting for assets accumulated for purposes of providing those pensions are effective for fiscalyears beginning after June 15, 2015. The requirements of Statement No. 73 for pension plans thatare within the scope of Statement No. 67 or for pensions that are within the scope of Statement No.68 are effective for fiscal years beginning after June 15, 2015. Earlier application is encouraged. TheSheriff has not completed the process of evaluating the impact of Statement No. 73 on its financialstatements.
Walton County, FloridaSheriff
Notes To Special Purpose Financial Statements
311
In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit PlansOther Than Pension Plans. The scope of this statement includes defined benefit and definedcontribution OPEB plans administered through trusts that meet specified criteria. This statementestablishes financial reporting standards for state and local governmental other postemploymentbenefit (“OPEB”) plans. The Statement replaces Statements No. 43, Financial Reporting forPostemployment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEBMeasurements by Agent Employers and Agent Multiple Employer Plans. Statement No. 74 iseffective for financial statements for fiscal years beginning after June 15, 2016. Earlier application isencouraged. The Sheriff has not completed the process of evaluating the impact of Statement No.74 on its financial statements.
In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (OPEB). This statement addresses accounting andfinancial reporting for OPEB that is provided to the employees of state and local governmentalemployees. This Statement also establishes standards for recognizing and measuring liabilities,deferred outflows of resources, deferred inflows of resources, and expense/expenditures. Fordefined benefit OPEB plans this statement identifies the methods and assumptions that arerequired to be used to project benefit payments, discount projected benefit payments to theiractuarial present value, and attribute that present value to periods of employee service. Notedisclosures and required supplementary information are also addressed by the statement. Thisstatement replaces the requirements of Statements No. 45, Accounting and Financial Reporting byEmployers for Postemployment Benefits Other Than Pensions, as amended, and Statement No. 57,OPEB Measurements by Agent Employers and Agent Multiple Employer Plans, for OPEB. StatementNo. 75 is effective for fiscal years beginning after June 15, 2017. Earlier application is encouraged.The Sheriff has not completed the process of evaluating the impact of Statement No. 75 on itsfinancial statements.
In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted AccountingPrinciples for State and Local Governments. This statement reduces the GAAP hierarchy to twocategories of authoritative GAAP and addresses the use of authoritative and nonauthoritativeliterature in the event that the accounting treatment for a transaction or other event is notspecified within a source of authoritative GAAP. This statement supersedes Statement No. 55, TheHierarchy of Generally Accepted Accounting Principles for State and Local Governments. It alsoamends Statement No. 62, Codification of accounting and financial Reporting Guidance Containedin Pre November 30, 1989 FASB and AICPA Pronouncements, paragraph 64, 74, and 82. Theprovisions of Statement No. 76 are effective for financial statements for periods beginning afterJune 15, 2015. Earlier application is permitted. The Sheriff has not completed the process ofevaluating the impact of Statement No. 76 on its financial statements.
In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. For financial reportingpurposes, this statement defines a tax abatement and contains required disclosures about areporting government’s own tax abatement agreements and those that are entered into by othergovernments and that reduce the reporting government’s tax revenues. The requirements of GASBStatement No. 77 are effective for financial statements for periods beginning after December 15,2015. Earlier application is encouraged. The Sheriff has not completed the process of evaluating theimpact of Statement No. 77 on its financial statements.
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Budgetary Requirements
Florida Statutes Chapters 30.49 and 129.03 details the preparation, adoption and administration ofthe Sheriff's annual budget. The Sheriff establishes an annual balanced budget for his office whichdisplays the revenues available to the office and the functions for which the money is to beexpended and submits it to the Board for approval. By June 1 of each year, the Sheriff shall certifyto the Board a proposed budget of expenditures for carrying out the duties of his office for theensuing fiscal year. The Board has until September 30 to approve and/or modify the Sheriff'sproposed budget during hearings held pursuant to Florida Statutes 129. Once approved, anysubsequent amendments must be approved by the Board.
Budgetary control is maintained at the major object expenditure level. Expenditures may notlegally exceed appropriations at the department level, and appropriations lapse at year end.Budgetary changes within major object expenditure categories are made at the discretion of theSheriff. The budgeted revenues and expenditures in the accompanying special purpose financialstatements reflect all amendments approved by the Board. The major special revenue funds arenot budgeted.
The Sheriff’s budget is prepared under a budgetary basis of accounting that differs from generallyaccepted accounting principles (GAAP). The major differences are recognition of unanticipatedgrant revenue and grant expenditures. The actual results of operations in the Statement ofRevenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund arepresented on a budgetary basis for budgetary accounting purposes. Adjustments to convert theresults of operation of the general fund at the end of the year from the budgetary basis ofaccounting to the GAAP basis of accounting are as follows:
Expenditures Total Revenue
Budget basis $ 26,157,030 $ 26,160,332
Non budgeted revenues, expenditures and other sources:
Personnel services 85,648Operating expenditures 194,971Intergovernmental grants 267,619Miscellaneous 13,000
GAAP basis $ 26,437,649 $ 26,440,951
Inventories and Prepaid Items
The purchase method is used to account for inventory and payments to vendors for costs applicableto future periods (prepaid). Under the purchase method, expenditures are recognized when theavailable financial resource is expended. Inventory is not deemed significant and therefore noamount has been reported.
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Capital Assets
Capital assets are recorded as expenditures in the general and special revenue funds at the time anasset is acquired. Capital assets are recorded at cost when purchased and fair market value ifdonated. The Sheriff maintains a $5,000 threshold for capitalization of equipment and $25,000 forland, buildings and improvements. Additionally, the Sheriff maintains an inventory of all tangiblepersonal property with a donated value or cost of $1,000 or more and a projected useful life of oneyear or more as required by Florida Statute 274 and Florida Administrative Code Sections 69I73.002 and 69I 73.006.
The Sheriff’s assets are reported on the county wide financial statements. The Sheriff maintainscustodial responsibility for the capital assets used by his office.
Depreciation has been provided using the straight line method with an estimated useful life ofthree to seven years for all tangible personal property and 15 to 30 years for buildings andimprovements.
Capital Leases
The Sheriff entered into lease agreements as a lessee for financing the acquisition of a computeraided dispatch system (CAD). The lease agreements qualify as capital leases for accountingpurposes and; therefore, have been recorded in the county wide financial statements at thepresent value of future minimum lease payments as of the lease inception date. The related assetsare reported as capital assets in the county wide financial statements. See Note 6 for detailedcapital lease activity
Compensated Absences
It is the Sheriff's policy to allow employees to accumulate unlimited unused sick time. Accumulatedannual leave is limited to 240 hours per year. Accumulated annual leave up to a maximum of 240hours is payable upon termination. Additionally, employees who retire from the agency with aminimum of ten years continuous service will be paid for 25% of their unused sick leave hours up toa maximum of 500 hours.
Accrued compensated absences that will not be liquidated with expendable available financialresources are the obligation of the County and are reported at the county wide level. The amountof the Sheriff’s accrued compensated absences to be reported at the county wide level is$1,282,222.
Governmental Fund Balances
Fund balances are classified either as nonspendable or as spendable. Spendable fund balances arefurther classified in a hierarchy based on the extent to which there are external and internalconstraints on the spending of these fund balances. These classifications are described as follows:
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Nonspendable fund balances include amounts that cannot be spent because they are not inspendable form or legally or contractually required to be maintained intact. There were nononspendable fund balances as of September 30, 2015.
Spendable fund balances are classified based on a hierarchy of the Sheriff’s ability to control thespending of these fund balances.
Restricted fund balances are fund balance amounts that are constrained for specific purposeswhich are externally imposed by creditors, grantors, contributors, or laws and regulationsimposed through constitutional provisions or enabling legislation. As of September 30, 2015,the Sheriff had restricted fund balances only in special revenue funds.
Committed fund balances are fund balances intended to be used for specific purposes imposedby the Sheriff’s formal action of highest level of decision making authority. As of September 30,2015, there were no committed fund balances.
Assigned fund balances are fund balances intended to be used for specific purposes, but whichare neither restricted nor committed. As of September 30, 2015, there were no assigned fundbalances.
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, orassigned. In funds other than the General Fund, unassigned fund balances are limited tonegative residual balances. As of September 30, 2015, the Sheriff had no unassigned fundbalances because all excess revenues within the General Fund are required to be remitted tothe Board and there were no negative residual balances in the special revenue funds.
When expenditures are incurred for purposes for which restricted or unrestricted fund balanceclassifications could be used, it is the Sheriff’s policy to use restricted funds first, then unrestricted.
Management Estimates and Assumptions
The preparation of special purpose financial statements in conformity with GAAP requiresmanagement to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the special purposefinancial statements and the reported amounts of revenues and expenses during the reportingperiod. Actual results could differ from those estimates.
NOTE 2 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand as well as demand deposits.
Walton County, FloridaSheriff
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Custodial Risk
The Sheriff does not have a written investment policy but historically has limited availableinvestments to cash and cash equivalents. Demand deposits are fully insured by the Federal DepositInsurance Corporation (FDIC) or the multiple financial institutions collateral pool required bySections 280.07 and 280.08, Florida Statutes.
NOTE 3 INTERFUND BALANCES
Receivables (due from other funds) and payables (due to other funds) resulting from variousinterfund transactions are as follows:
Interfund Receivables:
General FundInmate Canteen $ 2,945Fee collection 9
$ 2,954
Inmate Canteen FundGeneral fund $ 5,800
Other Governmental Funds:General fund $ 86,346Marijuana eradication 128
$ 86,474
Fiduciary FundsGeneral fund $ 163
Interfund Payables:
General FundInmate Canteen $ 5,800Federal forfeitures 7,386Law enforcement education and automation 50,760Abandoned property 15,000Fee collection 163State forfeitures 13,200
$ 92,309
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Inmate Canteen FundGeneral fund $ 2,945
Other Governmental FundsDrug control $ 128
Fiduciary FundsFee collection $ 9
Amount due from Inmate Canteen is for salary and benefit reimbursements. Amount due from FeeCollection is for a wrecker fee. Amount due from the General Fund is for inmate social security$5,800, training for CAS/RMS system $39,190, law enforcement training $11,570, capital outlay$35,586, and towing fees $163. Amount due from drug control is reimbursement for overtime.
NOTE 4 DUE FROM OTHER GOVERNMENTS
Due from other governments at September 30, 2015 consisted of the following:
GeneralFund
Department of Justice Bullet Proof Vest Partnership $ 5,234Department of Justice Victims of Crime Grant 10,844Drug Enforcement Task Force 4,296U.S. Marshals Service Regional Task Force 1,656Federal Bureau of Investigation 3,409Escamiba County Corrections 297,943Federal Inmate Housing 1,407
Total $ 324,789
NOTE 5 – ALLOWANCE FOR UNCOLLECTIBLES
All accounts receivable and amounts due from other governments are deemed collectible and noallowance for uncollectible accounts has been recorded.
Walton County, FloridaSheriff
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NOTE 6 – CAPITAL ASSETS
Capital asset activity including donated assets of $19,000 for the fiscal year is as follows:
Balance Balance10/1/2014 Additions Deletions 9/30/2015
Governmental ActivitiesCapital assets depreciated:Machinery and equipment $ 11,205,747 $ 617,371 $ (682,918) $ 11,140,200Buildings and improvements 182,516 331,311 513,827
Machinery and equipment (7,513,706) (995,641) 682,918 (7,826,429)Buildings and improvements (14,778) (7,426) (22,204)
Total governmental activitiescapital assets, net $ 3,859,779 $ (54,385) $ $ 3,805,394
Less accumulated depreciation:
Title in all capital assets is retained by the Board and the above noted capital asset information andactivity is reported on the county wide financial statements.
Depreciation expense to be reported by the County was charged to the function of government asfollows:
Governmental ActivitiesPublic safety $ 1,003,067
NOTE 7 – LONG TERM DEBT
The following is a summary of changes in long term debt:
Balance10/01/14
Additions ReductionsBalance9/30/15
Due in OneYear
Compensated absences $ 1,159,942 $ 578,918 $ 456,638 $ 1,282,222 $ 128,222Capital leases 645,431 228,031 417,400 134,939
Total $ 1,805,373 $ 578,918 $ 684,669 $ 1,699,622 $ 263,161
In September 2014, the Sheriff entered into a lease agreement as the lessee for a computer aideddispatch system (CAD). The agreement qualifies as a capital lease for accounting purposes and,therefore, has been recorded at the present value of the future minimum lease payments as of thedate of the execution of the lease. As of September 30, 2015, the Sheriff capitalized $975,431 forthe CAD system, however, since the system was still in the build out phase and not placed inservice, no depreciation has been taken on the asset.
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The following is a schedule of future minimum lease payments under this capital lease, and thepresent value of the minimum lease payments at September 30, 2015.
Long termDebt
2016 $ 147,5722017 147,5722018 147,572Less: amount representing interest 25,414
Present value of net minimum lease payment $ 417,302
NOTE 8 EXCESS REVENUE
Pursuant to Section 30.50(6), Florida Statutes, any excess revenues over expenditures determinedas of the date specified in Section 30.50(5), Florida Statutes, “...shall be refunded to the Board ofCounty Commissioners…". Excess revenues over expenditures returned to the Board of CountyCommissioners as required by Florida Statues are accrued and reported as other financing (uses).All special revenue funds in excess of revenue remains with the Sheriff.
NOTE 9 – RETIREMENT PLAN
The Sheriff and all full time employees are participants in the Florida Retirement System (the“System”), a defined benefit, cost sharing, multiple employer public retirement system, which iscontrolled by the State Legislature and administered by the State of Florida, Department ofAdministration, Division of Retirement. The plan covers full time employees of variousgovernmental units within the State of Florida. Accordingly, the actuarial information and relateddisclosures attributable to the Sheriff’s employees are not determinable.
The System's funding policy provides for monthly employer contributions at actuarially determinedrates that, expressed as percentages of annual covered payroll are adequate to accumulatesufficient assets to pay benefits when due (see rates below). Level percentage of payroll employercontribution rates, established by state law, is determined using the entry age actuarial fundingmethod. If an unfunded actuarial liability reemerges, future plan benefit changes, assumptionchanges, and methodology changes are amortized within 30 years, using level dollar amounts.Except for gains reserved for rate stabilization, it is anticipated future actuarial gains and losses areamortized on a rolling 10% basis, as a level dollar amount.
The System provides for those employees hired prior to July 1, 2011 vesting of benefits after sixyears of creditable service. Normal retirement benefits are available to employees who retire at orafter age 62 with six or more years of service. Early retirement is available after six years of servicewith a 5% reduction of benefits for each year prior to the normal retirement age. For thoseemployees hired on or after July 1, 2011, the System provides for vesting of benefits after eightyears of credible service. Normal retirement benefits are available to these employees who retire at
Walton County, FloridaSheriff
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or after age 65 with eight years of service with a 5% reduction of benefits for each year. Retirementbenefits are based upon age, average compensation and years of service credit where averagecompensation is computed as the average of an individual's five highest years of earnings.
Participating employer contributions are based upon state wide rates established by the State ofFlorida. These rates applied to employee salaries at year end are as follows: regular employees –7.26%, DROP Program – 12.88%, senior management – 21.43%, special risk – 22.04% and electedofficial – 42.27%. The rate applied to employee salaries for employer contributions was 3% for allclassifications, with the exception for the DROP Program.
Total payroll for the Sheriff's employees covered by the System was $14,939,936 for the year endedSeptember 30, 2015. The Sheriff's total payroll was $14,975,022 for the same period. The Sheriff'scontributions to the plan, net of accrued contributions, for the years ended September 30, 2015,2014, and 2013 were $2,457,833, $1,956,122, and $1,386,174, respectively. These contributionswere paid by the due date for the contribution.
The Sheriff has no responsibility to the System other than to make the periodic payments requiredby state statutes. The Florida Division of Retirement issues a publicly available financial report thatincludes financial statements and required supplementary information for the System. The reportmay be obtained by writing to the Florida Division of Retirement, P.O. Box 9000, Tallahassee, FL32315 9000 or at the Division’s website at dms.myflorida.com.
NOTE 10 POST EMPLOYMENT BENEFITS OTHER THAN PENSION
In addition to the retirement plan in Note 9, the County, in accordance with Section 112.0801,Florida Statutes, provides post retirement health care benefits to all retired employees whoparticipated in its group health plan while employed. Employees of the Sheriff are covered underthe County's plan. The County is required to measure and recognize the annual cost of the futurebenefits and calculate the annual employer funding requirements and, to the extent funding is notmade by the County recognize an other post employment benefit (OPEB) liability on the balancesheet of the County. These amounts, if any, are recorded in the County's government wide financialstatements.
NOTE 11 – CONTINGENT LIABILITIES
At September 30, 2015, the Sheriff was involved in several litigations and claims arising in thenormal course of operations. It is the opinion of the Florida Sheriff’s Self Insurance Fund thatcoverage provided by the Self Insurance Fund is more than adequate to eliminate any exposureresulting from those claims.
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The Sheriff receives grants from federal and state sources that are subject to review and audit bythe funding sources. Such reviews and audits could result in the discovery of unallowable activitiesand unallowable costs. Consequently, any of the funding sources may, at their discretion, requestreimbursement for expenses or return of funds, or both, as a result of noncompliance by the Sheriffwith the terms of the grants/contracts. In the opinion of the Sheriff’s management, suchallowances, if any, would not be significant in relation to the financial statements of the Sheriff.
NOTE 12 – FUND BALANCE
At September 30, 2015, fund balance is comprised of the following:
Restricted Fund Balance
Inmate Canteen $ 367,825Law Enforcement Education and Automation 142,477Federal Forfeiture Sharing 74,242Law Enforcement Trust 13,921Crime Prevention 51,149Traffic and Parking Enforcement 22,365Abandoned Property 19,825Aviation 133,568Marijuana Eradication 4,919
Total restricted fund balance $ 830,291
NOTE 13 SUBSEQUENT EVENTS
The Sheriff has evaluated subsequent events through the date of issuance of these financialstatements and has determined that no events occurring subsequent to year end warranteddisclosure.
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NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Law Enforcement Education and Automation – To account for appropriationsrestricted to educating law enforcement officers and for the automation of lawenforcement operations.
Federal Forfeiture Sharing – This fund is used to account for federal forfeiturerevenue and expenditures are restricted to law enforcement use.
Drug Control – This fund is for activity related to a grant from the Florida Departmentof Law Enforcement and is restricted to investigations.
Law Enforcement Trust – This fund is used to account for state forfeiture andrestitution revenue and expenditures are restricted to the investigation or preventionof drug related crimes.
Crime Prevention – To account for funds used for public related education in crimeprevention.
Traffic and Parking Enforcement – To account for fines collected by the Clerk of theCircuit Court for traffic and parking enforcement.
Abandoned Property – To account for state and local forfeitures restricted to lawenforcement.
Aviation – To account for funds restricted to on going maintenance of Sheriffdepartment aircraft.
Marijuana Eradication – To account for grant revenue restricted to drug eradication.
Walton County, FloridaSheriff
Combining Special Purpose Balance Sheet –Nonmajor Governmental Funds
September 30, 2015
See accompanying notes to special purpose financial statements.
Law EnforcementEducation andAutomation
FederalForfeitureSharing Drug Control
AssetsCash and cash equivalents 91,748$ 67,610$ $Accounts receivableInterfund receivable 50,759 7,387 128
Total assets 142,507$ 74,997$ 128$
Liabilities and Fund BalancesLiabilities
Accounts payable 30$ 755$ $Interfund payableDue to individualsUnearned revenue 128
Total liabilities 30 755 128
Fund balancesRestricted for:Public Safety Law Enforcement 142,477 74,242
Total liabilities and fund balances 142,507$ 74,997$ 128$
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LawEnforcement
TrustCrime
Prevention
Traffic andParking
EnforcementAbandonedProperty Aviation
MarijuanaEradication Total
721$ 53,928$ 19,679$ 42,000$ 133,568$ 5,047$ 414,301$2,686 2,686
13,200 15,000 86,474
13,921$ 53,928$ 22,365$ 57,000$ 133,568$ 5,047$ 503,461$
$ 2,779$ $ 4,179$ $ $ 7,743$- 128 128
32,996 32,996128
2,779 37,175 128 40,995
13,921 51,149 22,365 19,825 133,568 4,919 462,466
13,921$ 53,928$ 22,365$ 57,000$ 133,568$ 5,047$ 503,461$
Walton County, FloridaSheriff
Combining Special Purpose Statement of Revenues,Expenditures and Changes in Fund Balances
Nonmajor Governmental FundsSeptember 30, 2015
See accompanying notes to special purpose financial statements.
Law EnforcementEducation andAutomation
FederalForfeitureSharing
DrugControl
RevenuesAppropriations from Board ofCounty Commissioners 321,000$ $ $Fines and foreitures 50,000 70,262Intergovernmental 6,676Miscellaneous 5,847 126
Total revenues 376,847 70,388 6,676
ExpendituresPublic safetyOperating 31,357 6,676Capital outlay 119,191 82,341Debt service
Principal 128,199Interest 19,373
Total expenditures 298,120 82,341 6,676
Excess Revenues Over (Under)Expenditures 78,727 (11,953)
Fund Balance beginning 63,750 86,195
Fund Balance ending 142,477$ 74,242$ $
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LawEnforcement
TrustCrime
Prevention
Traffic andParking
EnforcementAbandonedProperty Aviation
MarijuanaEradication Total
$ 35,000$ $ $ $ $ 356,000$8,210 128,472
2,000 8,676515 33,666 28 25,268 230 11 65,691
515 68,666 8,238 25,268 230 2,011 558,839
2,462 67,680 10,395 23,201 356 142,12768,273 269,805
128,19919,373
2,462 67,680 78,668 23,201 356 559,504
(1,947) 986 8,238 (53,400) (22,971) 1,655 (665)
15,868 50,163 14,127 73,225 156,539 3,264 463,131
13,921$ 51,149$ 22,365$ 19,825$ 133,568$ 4,919$ 462,466$
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Fiduciary Funds
Suspense – To account for the collections and remittance of miscellaneous receiptsheld in trust.
Individual Depositors – To account for the collection and disbursement of civil fees.
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Combining Special Purpose Statement of Fiduciary Net PositionSeptember 30, 2015
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SuspenseIndividualDepositers Total
AssetsCash 5,250$ 13,985$ 19,235$Interfund receivable 163 163
Total assets 5,250$ 14,148$ 19,398$
LiabilitiesDue to individuals 5,250$ 1,713$ 6,963$Interfund payable 9 9Due to other governments 12,426 12,426
Total liabilities 5,250$ 14,148$ 19,398$
Walton County, FloridaSheriff
Combining Special Purpose Statement ofChanges in Fiduciary Net Position
Agency FundsSeptember 30, 2015
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Balance10/01/14 Additions Deductions
Balance9/30/15
Suspense
AssetsCash $ 29,393 $ 3,777 $ 27,920 5,250$
LiabilitiesDue to individuals $ 8,968 $ 3,777 $ 7,495 5,250$Deposits 20,425 23,372 43,797
Total liabilities $ 29,393 $ 27,149 $ 51,292 $ 5,250
Individual Depositors
AssetsCash $ 52,747 $ 137,354 $ 176,116 13,985$Interfund receivable 233 70 163
Total assets $ 52,747 $ 137,587 $ 176,186 14,148$
LiabilitiesDue to individuals $ 42,581 $ 5,000 $ 45,868 1,713$Interfund payable 9 9Due to other governments 10,166 310,589 308,329 12,426
Total liabilities $ 52,747 $ 315,598 $ 354,197 $ 14,148
Total Agency Funds
AssetsCash $ 82,140 $ 141,131 $ 204,036 $ 19,235Interfund receivable 233 70 163
Total assets $ 82,140 $ 141,364 $ 204,106 $ 19,398
LiabilitiesDue to individuals 51,549$ 8,777$ 53,363$ 6,963$Deposits 20,425 23,372 43,797Interfund payable 9 9Due to other governments 10,166 310,589 308,329 12,426
Total liabilities $ 82,140 $ 342,747 $ 405,489 $ 19,398
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INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Michael A. Adkinson, Jr.SheriffWalton County, Florida
We have audited, in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the special purpose financialstatements of each major fund, and the aggregate remaining nonmajor governmental funds andfiduciary fund type of Walton County, Florida Sheriff (the “Sheriff”) as of and for the year endedSeptember 30, 2015, and the related notes to the special purpose financial statements, and haveissued our report thereon dated June 21, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the special purpose financial statements, we consideredthe Sheriff’s internal control over financial reporting (internal control) to determine the auditprocedures that are appropriate in the circumstances for the purpose of expressing our opinion onthe financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe Sheriff’s internal control. Accordingly, we do not express an opinion on the effectiveness of theSheriff’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control, such that there is a reasonablepossibility that a material misstatement of the entity’s financial statements will not be prevented,or detected and corrected on a timely basis. A significant deficiency is a deficiency, or acombination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or, significant deficiencies. Given these limitations, during our audit we didnot identify any deficiencies in internal control that we consider to be material weaknesses.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Sheriff's special purpose financialstatements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts, and grant agreements, noncompliance with which couldhave a direct and material effect on the determination of special purpose financial statementamounts. However, providing an opinion on compliance with those provisions was not an objectiveof our audit, and accordingly, we do not express such an opinion. The results of our tests disclosedno instances of noncompliance or other matters that are required to be reported underGovernment Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theentity’s internal control or on compliance. This report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering the entity’s internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
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INDEPENDENT ACCOUNTANT’S REPORT ON AN EXAMINATIONCONDUCTED IN ACCORDANCE WITH AICPA PROFESSIONAL STANDARDS,SECTION 601, REGARDING COMPLIANCE REQUIREMENTS IN ACCORDANCEWITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Michael A. Adkinson, Jr.SheriffWalton County, Florida
We have examined the Walton County, Florida Sheriff’s (the “Sheriff”) compliance with therequirements of Section 218.415, Florida Statutes, Local Government Investment Policies,respectively, during the year ended September 30, 2015. Management is responsible for theSheriff’s compliance with those requirements. Our responsibility is to express an opinion on theSheriff’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by theAmerican Institute of Certified Public Accountants, and, accordingly, included examining, on a testbasis, evidence about the Sheriff’s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our examinationprovides a reasonable basis for our opinion. Our examination does not provide a legaldetermination on the Sheriff’s compliance with specified requirements.
In our opinion, the Sheriff complied, in all material respects, with the aforementioned requirementsfor the year ended September 30, 2015.
This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016
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MANAGEMENT LETTER
Honorable Michael A. Adkinson, Jr.SheriffWalton County, Florida
Report on the Special Purpose Financial Statements
We have audited the special purpose financial statements of the Walton County, Florida Sheriff (the“Sheriff”) as of and for the fiscal year ended September 30, 2015, and have issued our reportthereon dated June 21, 2016.
Auditors’ Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of theFlorida Auditor General.
Other Reports and Schedule
We have issued our Independent Auditors' Report on Internal Control over Financial Reporting andCompliance and Other Matters Based on an Audit of the Financial Statements Performed inAccordance with Government Auditing Standards and Independent Accountant’s Report on anExamination Conducted in Accordance with AICPA Professional Standards, Section 601, regardingcompliance requirements in accordance with Chapter 10.550, Rules of the Auditor General.Disclosures in those reports, which are dated June 21, 2016, should be considered in conjunctionwith this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in thepreceding annual financial audit report. There were no recommendations made in the precedingannual financial audit report.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the managementletter any recommendations to improve financial management. In connection with our audit, wedid not have any such recommendations.
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Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance withprovisions of contracts or grant agreements, or abuse, that have occurred, or are likely to haveoccurred, that have an effect on the financial statements that is less than material but whichwarrants the attention of those charged with governance. In connection with our audit, we did nothave any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative AuditingCommittee, members of the Florida Senate and the Florida House of Representatives, the FloridaAuditor General, Federal and other granting agencies, Sheriff, and applicable management and isnot intended to be and should not be used by anyone other than these specified parties.
CARR, RIGGS & INGRAM, L.L.C.
Certified Public Accountants
June 21, 2016