Audit Report 09.30.1992 I
Financial Statements
1
GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1992
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
September 30, 1992
CITY COUNCIL
James E. Kirk
Mayor, Chairman
Danny Entry Dowling Watford, Jr.
. Councilmember Councilmember
Nick Collins Jerry E. Walker
Councilmember Councilmember
ADMINISTRATIVE
John J. Drago John Cook
City Administrator City Attorney
Bonnie S. Thomas, CMC Susan Groover, P.E.
City Clerk Interim Public Utilities
Director
Louis K. Torrey II Charles Elders
Chief of Fire Director of Public Works
Larry Mobley Lola Parker
Chief of Police Finance Director
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
September 30, 1992
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1-2
General Purpose Financial Statements:
Combined Balance Sheets - All Fund Types and
Account Groups 3
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - All Governmental Fund Types 4
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - Budget and Actual - Governmental Funds 5
Combined Statements of Revenue, Expenses and Changes in
Fund Equity - Proprietary Fund and Similar Trust Funds . 6-7
Statement of Cash Flows - Proprietary Fund 8-9
Notes to Combined Financial Statements 10-31
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and Actual 32-33
Schedule of Expenditures - Budget and Actual 34
Debt Service Fund -
Statement of Revenue and Expenditures - Budget and
Actual 35
Employee Pension Trust Funds -
Combining Balance Sheets 36
Combining Statements of Revenue, Expenses and Changes
in Fund Balances 37
Historical Information (Unaudited) 38
Unaudited Information:
Summary of Insurance Coverage - Unaudited 39
Schedule of Assessed Values, Tax Levies and Rates -
Unaudited 40
Schedule of Certain Revenue - Unaudited 41
Schedule of Federal Financial Assistance 42
Other Reports:
Independent Auditors' Report on Compliance with Laws
and Regulations 43
• Single Audit Report on Compliance with Requirements
Applicable to Non major Federal Financial Assistance
Program Transactions 44
Single Audit Combined Report on the Internal Control
Structure 45-48
Management Letter 49-50
J.D. GILBERT S. COMPANY
alliLID. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
We have audited the accompanying general purpose financial
statements of the City of Okeechobee, Florida (City) as of
September 30, 1992, and for the year then ended, as listed in the
table of contents. These general purpose financial statements are
the responsibility of the City's management. Our responsibility is
to express an opinion on these general purpose financial statements
based on our audit. We did not audit the financial statements of
the Employee Pension Trust, which represent the amounts shown as
the Fiduciary Fund Types. Those financial statements were audited
. by other auditors whose report thereon has been furnished to us,
and our opinion, insofar as it relates to the amounts included for
the Fiduciary Fund Types - Employee Pension Trust, is based solely
on the report of the other auditors.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the general purpose financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
general purpose financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall general
purpose financial statement presentation. We believe that our
audit and the report of other auditors provide a reasonable basis
for our opinion.
As disclosed in Notes 5 and 6 to the general purpose financial
statements, the City has not maintained adequate detailed fixed
asset records to support the cost of the water and sewer utility
plant in service in the proprietary fund and fixed assets included
in the general fixed asset account group with respect to the stated
cost of assets acquired prior to October 1, 1981. Depreciation
• expense and accumulated depreciation in the proprietary fund have
been computed based on these recorded costs. Due to the inadequate
records, we were unable to satisfy ourselves, in accordance with
• generally accepted auditing standards, as to the propriety of the
recorded cost, accumulated depreciation and depreciation expense
for fixed assets acquired prior to October 31, 1981. It is not
practicable to determine the effects on the general purpose
financial statements of this departure from generally accepted
accounting principles.
S
1 251 East Sample Road • Pompano Beach, FL 33064 • (305) 781-1250
In our opinion, based on our audit and the report of other
auditors, except for the effects of the departure from generally
accepted accounting principles in the proprietary fund and general
fixed asset account group, as discussed in the preceding paragraph,
the general purpose financial statements referred to above present
fairly, in all material respects, the financial position of the
City of Okeechobee, Florida as of September 30, 1992 and the
results of its operations and the cash flows of its proprietary
fund type for the year then ended in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on
the general purpose financial statements taken as a whole. The
accompanying information listed in the table of contents is
presented for purposes of additional analysis and is not a required
part of the general purpose financial statements of the City. Such
• information, except for the portion marked "unaudited", on which we
express no opinion, has been subjected to the auditing procedures
applied in the audit of the general purpose financial statements
and, in our opinion, based upon our audit and the report of the
other auditors, except for the effects on the proprietary fund and
general fixed asset account group of not maintaining adequate
detailed fixed asset records as discussed in the third paragraph
above, is fairly stated in all material respects in relation to the
general purpose financial statements taken as whole.
oe . C-4
J.D. Gilbert & Company, CPAs
February 25, 1993
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1992
Proprietary Fiduciary
Governmental Fund Types Fund Types Fund Types Account Groups
Employee General General Total
Debt Pension Fixed Long-Term (Memorandum
General Service Enterprise Trust Assets Debt Only)
ASSETS
Cash $367,821 $84,159 $271,571 $40,345 - - $763,896
Investments 425,000 - 850,000 2,810,511 - - 4,085,551
- Receivables:
Taxes 79,355 - - - - - 79,355
Accounts loss Allowance of$42,283 20,720 - 306,954 - - - 329,674
Due from Other Government Agencies 118,285 - - - - - 118,285
• Due from Other Funds 279 - 2,631 - - - 2,910
Inventory 8,312 - - - - - 8,312
Restricted Assets-
Cash 2,644 - 1,271,237 - - - 1,273,881
Investments - - 1,063,987 - - - 1,063,987
Fixed Assets - - 13,451,924 - 2,001,357 - 15,453,281
Unamortized Bond Expenses - - 279,639 - - - 279,639
Amount Available in Debt Service Fund - - - - - 81,712 81,712
Amount to be Provided for Retirement
of General Long-Term Debt - - - - - 1,152,607 1,152,607
TOTAL ASSETS $1,022,416 $84,159 $17,499,943 $2,850,896 $2,001,357 $1,234,319 $24,693,090
LIABILITIES
Accounts Payable 30,021 - 26,089 5,725 - - 61,835
Accrued Liabilities 23,864 - 36,858 - - 93,124 153,846
Accrued Interest 65,894 - - - - - 65,894
•
Payable from Restricted Assets:
Accounts Payable - - 62,400 - - - 62,400
Customer Deposits - - 338,482 - - - 338,482
Retainage Payable - - 63,512 - - - 63,512
Accrued Interest on Bonds Payable - - 173,568 - - - 173,568
Matured Bonds and Interest Coupons - 2,012 - - - - 2,012
Due to Other Funds - 435 - 2,475 - - 2,910
Deferred Revenue 20,693 - - - - - 20,693
Long-Term Debt - - 9,407,213 - - 1,141,195 10,548,408
TOTAL UABILITIES $140,472 $2,447 $10,108,122 $8,200 - $1,234,319 $11,493,560
FUND EQUITY
Contributed Capital - - 5,116,257 - - - 5,116,257
investment in General Fixed Assets - - - - 2,001,357 - 2,001,357
Retained Earnings:
•
Reserved for Revenue Bond
Retirement - - 551,069 - - - 551,069
Unreserved - - 1,724,495 - - - 1,724,495
. Fund Balances:
Reserved for:
Employees'Retirement - - - 2,842,696 - - 2,842,696
Debt Service - 81,712 - - - - 81,712
Inventory 8,312 - - - - - 8,312
Encumbrances 57,178 - - - - - 57,178
Unreserved 816,454 - - - - - 816,454
TOTAL FUND EQUITY 881,944 81,712 7,391,821 2,842,696 2,001,357 - 13,199,530
TOTAL LIABILITIES AND FUND
EQUITY $1,022,416 $84,159 $17,499,943 $2,850,896 $2,001,357 $1,234,319 $24,693,090
,
The Notes to Combined Financial Statements
are an Integral Part of this Statement
• 3
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 1992
TOTALS
DEBT (MEMORANDUM
GENERAL SERVICE ONLY)
Revenues
Taxes $1, 122,446 $61,917 $1, 184, 363
Intergovernmental 872,816 - 872,816
Charges for Services 218,788 - 218,788
Licenses and Permits 45, 002 - 45, 002
Fines and Forfeitures 44, 615 - 44, 615
Interest Income 29,246 1,800 31,046
Miscellaneous 110,350 - 110, 350
Total Revenue 2,443,263 63 ,717 2,506,980
Expenditures
Current:
Public Safety 1, 142,593 - 1, 142,593
General Government 383, 136 - 383, 136
Transportation 459,705 - 459,705
Physical Environment 187,229 - 187,229
Health and Human Services 47,643 - 47, 643
Debt Service:
Principal 103,974 30, 000 133,974
Interest 85, 004 10,956 95,960
Professional Fees - 1.000 1,000
Total Expenditures 2,409,284 41,956 2,415,240
Excess of Revenue
Over Expenditures 33,979 21,761 55,740
Fund Balances Beginning of
Year 847,965 59,951 907,916
Fund Balances End of Year $ 881,944 $ 81,712 $ 963,656
The Notes to Combined Financial Statements
are an Integral Part of this Statement
4
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GOVERNMENTAL FUND TYPES
Year Ended September 30, 1992
Totals
General Fund Debt Service Fund (Memorandum only)
Actual(on Variance Variance Actual(on Variance-
Budgetary Favorable Favorable Budgetary Favorable
Budget Basis) (Unfavorable) Budget Actual (Unfavorable) Budget Basis) (Unfavorable)
•
REVENUE
Taxes $1,152,000 $1,122,447 ($29,553) $52,100 $81,917 $9,817 $1,204,100 $1,184,364 ($19,736)
Intergovern-
mental 835,900 872,816 36,916 - - - 835,900 872,816 36,916
Charges for
services 276,950 218,788 (58,162) - - - 276,950 218,788 (58,162)
Licenses and
permits 47,250 45,002 (2,248) - - - 47,250 45,002 (2,248)
Fines and
forfeitures 20,800 44,615 23,815 - - - 20,800 44,615 23,815
Interest
Income 25,600 29,246 3,646 5,500 1,800 (3,700) 31,100 31,046 (54)
Miscellaneous 77,525 110,350 32,825 - - - 77,525 110,350 32,825
' TOTAL REVENUE 2,436,025 2,443,264 7,239 57,600 63,717 6,117 2,493,625 2,506,981 13,358
EXPENDITURES
Public safety 1,192,910 1,139,557 53,353 - - - 1,192,910 1,139,557 53,353
. General
government 385,570 376,185 9,385 - - - 385,570 376,185 9,385
Transporta-
tion 817,320 499,059 318,261 - - - 817,320 499,059 318,261
Physical
environment 237,600 187,229 50,371 - - - 237,600 187,229 50,371
Health and
human
services 42,825 47,643 (4,818) - - - 42,825 47,643 (4,818)
Debt service 195,753 188,978 6,775 41,456 41,956 (500) 237,209 230,934 6,275
TOTAL
EXPENDITURES 2,871,978 2,438,851 433,327 41,458 41,956 (500) 2,913,434 2,480,607 432,827
EXCESS OF
REVENUE OVER
(UNDER)
EXPENDITURES ($435,953) 4,613 $440,566 $16,144 21,761 $5,617 ($419,809) 26,374 $446,183
-
• FUND BALANCES
Beginning of
year 847,965 59,951 907,916
Adjustment to
• conform to
generally
accepted
accounting
principles:
Adjustment for
encumbrances 29,366 - 29,366
End of year $881,944 $81,712 $963,658
The Notes to Combined Financial Statements
are an Integral Part of this Statement
5
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN RETAINED EARNINGS/FUND BALANCES -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS
Year Ended September 30, 1992
Proprietary Fiduciary
Fund Type Fund Type
Employee Totals
Pension (Memorandum
Enterprise Trust (2nly)
Operating Revenues:
Charges for Services $2,624,827 $ - $2 , 624,827
Contributions - 194,598 194,598
Investment Income - 231,994 231994
Total Operating Revenues 2, 624,827 426,592 3 , 051,419
Operating Expenses:
Personal Services 635,297 - 635, 297
Professional Services 156,915 42,128 199, 043
Materials and Operating
• Supplies 277, 714 - 277,714
Utilities 131,921 - 131,921
Insurance 62,643 - 62, 643
Repairs and Maintenance 190,799 - 190,799
Administrative Supplies
and Expense 28,206 17 28,223
Depreciation 471, 334 - 471,334
Benefit Payments - 28, 162 28, 162
Contribution Refunds - 23,434 24,434
General Fund
Administrative Charge 100.000 - 100,000
Total Operating Expenses 2,054,829 93,741 2, 148,570
Operating Income 569.998 332.851 902,849
•
The Notes to Combined Financial Statements
are an Integral Part of this Statement
6
C J.D. GILBERT S. COMPANY
•
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN RETAINED EARNINGS/FUND BALANCES -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS (CONTINUED)
Year Ended September 30, 1992
Proprietary Fiduciary
Fund Type Fund Type
Employee Totals
Pension (Memorandum
Enterprise Trust Only)
Nonoperating Revenues
• (Expenses) :
System Capacity
Fees $ 197,767 $ - $ 197,767
Connection Fees 99,782 - 99,782
Interest Revenue 131,433 - 131,433
Interest Expense (718, 115) - (718, 115)
Other Fiscal Charges (1,986) - (1,986)
Miscellaneous 1,353 - 1, 353
Nonoperating Expenses,
• net (289,766) - (289,766)
Net Income 280,232 332,851 613, 083
Fund Equity, Beginning of
Year 7,067 ,844 2,509 ,845 9,577, 689
7,348,076 2,842, 696 10, 190,772
Capital Contribution 43,745 - 43,745
Fund Equity, End of Year $7,391,821 $2,842,696 $10,234,517
•
The Notes to Combined Financial Statements
are an Integral Part of this Statement
7
• C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE
Year Ended September 30, 1992
Increase (Decrease) in Cash and Restricted Cash
Proprietary
Fund Type
Enterprise
Cash Flows from Operating Activities
Cash received from customers $2,851,405
Cash payments for goods and services (1, 076, 157)
Cash payments to employees for services (509,473)
Other operating cash received 29,402
Net Cash Provided by Operating Activities 1,295, 177
Cash Flows from Noncapital Financing Activities
Net cash advanced on interfund borrowing (4,205)
Net Cash Used in Noncapital Financing
Activities (4,205)
Cash Flows from Capital and Related Financing
• Activities
Acquisition and construction of capital assets (999,207)
Principal payments on revenue bond maturities (90, 053)
Interest paid on revenue bonds (707, 133)
Grant 43 ,745
Net Cash Used in Capital and Related Financing
Activities (1,752,648)
Cash Flows from Investing Activities
Investment in Certificates of Deposit (1,913,987)
Sale of investment securities 494, 199
Interest and dividend on investments 131,433
Net Cash Used in Investing Activities (1,288, 355)
Net Decrease in Cash and Restricted Cash (1,750,031)
Cash and Restricted Cash at Beginning of Year 3,292 ,839
Cash and Restricted Cash at End of Year $1,542,808
The Notes to the Combined Financial Statements
are an Integral Part of this Statement
8
C J.D. GILBERT & COMPANY
•
CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE (CONTINUED)
Year Ended September 30, 1992
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Proprietary
Fund Type
Enterprise
Operating Income $ 569, 998
. Adjustments to reconcile operating income to net
cash provided by operating activities:
System capacity and connection fees 297,549
• Other nonoperating expenses, net (633)
Depreciation 471, 334
Changes in Assets and Liabilities:
Increase in Accounts Receivable (71,204)
Decrease in Accounts Payable 6,074
Increase in Other Accrued Liabilities 22.059
Net Cash Provided by Operating Activities $1,295, 177
•
The Notes to Combined Financial Statements
are an Integral Part of this Statement
9
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Okeechobee (the City) was originally incorporated in
1915 and its present charter was adopted in 1919 under Chapter 8318
of Special Acts of 1919. The City operates under the council form
of government and provides the following services as authorized by
• its charter: public safety, public works and culture and
recreation. The accounting policies of the City conform to
generally accepted accounting principles as applicable to
• governmental units. The following is a summary of the more
significant policies:
A. SCOPE OF REPORTING ENTITY
The accompanying financial statements include all
organizations, activities and functions over which the City
maintains direct manifestations of oversight responsibility,
and those organizations where other circumstances or
relationships require their inclusion to conform with
generally accepted accounting principles. These circumstances
include special financing relationships and consideration of
. the scope of public services provided by a particular
organization or agency.
This report includes all funds and account groups of the City.
The specific organizations and agencies included in the
accompanying financial statements, and a summary description
of how the specific elements of oversight responsibility, and
other criteria, were considered in the determination of
whether or not to include the organization in the financial
statements are presented below.
The City of Okeechobee Pension Trust Funds
The three retirement plans included in the financial
statements are the General Employee's Pension Trust Fund, the
Police Officer's Pension Trust Fund and the Fire Fighters
Pension Trust Fund. All are governed by a separate Board of
Trustees, as appointed by the City Council, subject to the
requirements of local ordinances and by applicable provisions
of Florida law.
10
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The plans require participation by all employees in the
respective governing authorities with the exception of the
City Administrator who maintains a preexisting pension trust
fund. Additionally, the organizations exist for the benefit
• of the employees of the City.
B. BASIS OF PRESENTATION - FUND ACCOUNTING AND ACCOUNT GROUPS
• The accounts of the City are organized on the basis of funds
and account groups, each of which is considered a separate
accounting entity. The operations of each fund are accounted
for with a separate set of self-balancing accounts that
comprise its assets, liabilities, fund equity, revenues and
expenditures/expenses. Government resources are allocated to
and accounted for in individual funds based upon the purposes
for which they are to be spent, and the means by which
spending activities are controlled. The various funds are
summarized by type in the combined financial statements. The
following fund types and account groups are used by the City:
Governmental Fund Types
Governmental funds are those through which most governmental
functions of the City are financed. The acquisition, use and
balances of the City's expendable financial resources and
related liabilities are accounted for through governmental
funds. The measurement focus is upon determination of changes
in financial resources, rather than upon net income
determination. The following are the City's governmental fund
types:
General Fund - The general fund is the general operating
fund of the City. It is used to account for all
financial resources except those required to be accounted
for in another fund.
Debt Service Fund - The debt service fund is used to account
for the accumulation of resources for, and the payment
of, principal, interest and certain related costs of
general long-term debt.
11
J.D. GILBERT & COMPANY
CITY OF OHEECHOBFE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Proprietary Fund Type
The proprietary fund is used to account for the City's ongoing
organizations and activities which are similar to those often
• found in the private sector. The measurement focus is upon
determination of net income.
The following is the City's proprietary fund type:
Enterprise Fund - The enterprise fund is used to account for
operations that are financed and operated in a manner
similar to a private business enterprise where the intent
of the governing body is that the costs (Le , expenses,
including depreciation) of providing water and sewer
services to the general public on a continuing basis be
financed or recovered primarily through user charges.
Fiduciary Fund Type
Fiduciary funds are used to account for assets held by the
City in a trustee capacity or as an agent for individuals,
private organizations, other governmental units or other
funds. The following is the City's proprietary fund type:
Employee Pension Trust Fund - Pension trust funds are accounted
for essentially the same as the proprietary fund since a
primary focus is on capital maintenance.
Account Groups
Account groups are used to establish accounting control and
accountability for the City's general fixed assets and general
long-term debt. The two account groups are not "funds" . They
are not involved with measurement of results of operations.
The following are the City's account groups:
General Fixed Assets Account Group - The account group is
established to account for all fixed assets of the City
used for general purposes (i.e., excludes fixed assets used
for proprietary fund purposes) . No depreciation is
recorded on general fixed assets.
12
• C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
General Long-Term Debt Account Group - This account group is
used to account for long-term debt to be financed from
governmental fund types.
Total Columns on Combined Statements
Total columns on the combined financial statements are
captioned "Memorandum Only" to indicate they are presented
only to facilitate financial analysis. Data in these columns
do not present financial position, results of operations or
cash flows in conformity with generally accepted accounting
principles. Neither is such data comparable to a
consolidation. Interfund eliminations have not been made in
the aggregation of this data.
C. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS
Basis of accounting refers to the timing of the recognition of
revenues and expenditures (or expenses) in the accounts and in
the financial statements. The basis of accounting is
independent of the measurement focus, which refers to
objectives in recording of financial resources and
expenditures or expenses.
Governmental Fund Types
Governmental funds are accounted for using the modified
accrual basis of accounting. Therefore, revenues are
generally recognized when they become measurable and available
as current assets. Expenditures are generally recognized when
the related fund liability is incurred. Exceptions to this
general rule include accumulated unpaid compensated absences
and unmatured principal and interest on general long-term
debt; these expenditures are recognized when due or when
expected to be paid with expendable available financial
resources.
The measurement focus is on current financial resources. The
accounting and reporting treatment applied to fixed assets and
long-term liabilities associated with a fund is determined by
its measurement focus. This means that only current assets
and current liabilities are generally included on governmental
fund balance sheets. Their reported governmental fund balance
(net current assets) is considered a measure of "expendable
available financial resources".
13
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental fund operating statements present increases
(revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets.
Accordingly, they are said to present a summary of sources and
uses of current financial resources during a period.
Special reporting treatment is also applied to governmental
• fund inventories to indicate that they do not represent
"expendable available financial resources", even though they
are a component of net current assets. Such amounts are
offset by fund balance reserve accounts.
Proprietary and Pension Trust Funds
Proprietary funds and pension trust funds are accounted for on
the accrual basis of accounting. Therefore, revenues are
recognized when earned and expenses are recognized when
• incurred. Estimated unbilled water and sewer utility service
revenues are recorded as receivables at September 30 in the
proprietary fund. The measurement focus is on the flow of
economic resources. Therefore, all assets and liabilities
associated with the operation of these funds are included on
the balance sheet.
D. BUDGET AND BUDGETARY ACCOUNTING
The City enacts by ordinance, an annual budget for the
revenues and expenditures of the governmental funds. The
budget is prepared on a basis consistent with generally
accepted accounting principles except encumbrances are
presented as expenditures.
The City follows these procedures in establishing the
budgetary data included in the financial statements:
•
1. The City Administrator submits to the City Council a
proposed operating budget for the fiscal year commencing
on October 1st. The operating budget includes proposed
expenditures and means of financing them.
2 . Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through the passage of an
ordinance by City Council on or before the fifteenth day
of September of the fiscal year currently ending.
14
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STAB (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
4. The level of budgetary control is the department. The
City Administrator is authorized to transfer budgeted
amounts within departments of any fund; revisions to
budgeted totals of any department require approval of the
City Council. Unencumbered appropriations lapse at year
end.
The reported budgetary data represents the final approved
budget after amendments adopted by the City Council.
Formal budget integration is not employed for proprietary or
trust funds because effective budgetary control is achieved by
alternate measures.
E. ENCUNBRANCES
The governmental funds use encumbrance accounting under which
purchase orders, contracts and other commitments related to
unperformed contracts for goods and services which will
require expenditure of funds are recorded at year end as a
reserve of fund balance. They do not constitute expenditures
or liabilities, but are recorded to reserve that portion of
the applicable appropriation.
F. CASH AND INVESTMENTS
Cash accounts for the City are maintained in interest-bearing
accounts which include money market accounts and certificates
of deposit with maturity dates of three months or less. These
deposits are carried on the balance sheet under the caption
"cash". Certificates of deposit purchased with initial
maturities of greater than three months are included in
• investments.
G. INVENTORY
Inventory consists of motor fuels which is stated at cost
determined on the first-in, first out method. Inventory is
considered an expenditure or expense when used.
H. FIXED ASSETS
Fixed assets used in governmental funds are recorded as
expenditures in the governmental fund and capitalized at cost
in the General Fixed Assets Account Group. Assets contributed
15
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
to the City are recorded at their estimated fair value on the
date donated. Public domain general fixed assets
("infrastructure", including unimproved land, roads, bridges,
curbs and gutters, streets and sidewalks, drainage systems,
• and lighting systems) are not capitalized. No depreciation
has been provided on governmental fund fixed assets.
Fixed assets used in the enterprise fund are capitalized at
cost, which includes ancillary charges necessary for asset
aquisition. The City capitalizes net interest costs and
interest earned as part of the cost of constructing various
water and sewer projects, when material. Depreciation is
provided in amounts sufficient to relate the cost of the
depreciable assets to operations over their estimated service
lives on the straight-line basis.
I. ALLOCATION OF ADMINISTRATIVE CHARGES
•
Certain administrative expenses are incurred by the City's
general fund on behalf of the City's enterprise fund. The
general fund charges for these services based upon management
estimates. Reimbursement for these services is recorded as an
operating expense of the enterprise fund and as a reduction of
general government expenditures of the general fund. For the
year ended September 30, 1992, these charges aggregated
$100,000.
The enterprise fund's maintenance facility, water towers, and
water and sewer plants, except for the new sewer plant, are
located on city-owned real estate which is not recorded in the
enterprise fund. Additionally, the enterprise fund's
administrative staff offices are located in City Hall. No
• interfund charges have been recorded for rental of either the
land or the office space. The general fund also does not
receive any franchise fee from the enterprise fund for the
operation of the utility plant; such franchise fee if charged,
would be based upon revenue of the water and sewer operation.
J. COMPENSATED ABSENCES
Full-time and permanent employees accrue a paid vacation
ranging from 6 days after 6 months or continuous service up to
20 days after 15 years of service. Unused vacation may be
accumulated up to a maximum of 30 days.
16
J.D. GILBERT & COMPANY
i
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Sick leave for employees is accumulated at the rate of 12 days
per year. Payment for unused sick leave upon termination of
employment may be made for employees with 10 years or more of
continuous service at a rate of 25% of the unused sick leave
balance.
The amount of vacation leave for the proprietary fund and the
amount of vacation leave expected to be paid from current
financial resources of the general fund are included with
accrued liabilities. The vested portion of sick leave and the
remaining balance of vacation leave for the general fund is
included under long-term debt. A long-term liability of
$93, 124 has been recorded in the General Long-Term Debt Group
of accounts, representing the City's commitment to fund such
costs from future operations for the general fund. A
liability of $27,045 is reflected within the enterprise fund
for accrued vacation and sick leave.
• E. AMORTIZATION OF BOND EXPENSE
The cost of issuance of bonds is being amortized, on the
straight-line method, over the life of the bonds.
NOTE 2 - COMPARISION OF BUDGET TO ACTUAL RESULTS
The actual results of operations are presented in accordance with
generally accepted accounting principles which differ in certain
respects from those practices used in the preparation of the 1991-
92 budget. For purposes of preparing the combined statements of
revenue, expenditures and changes in fund balances - budget and
actual - governmental funds, the actual results of operations have
been adjusted to a basis consistent with the City's budgeted
revenues and expenditures, formulated on the encumbrance system of
accounting.
The adjustments for encumbrances shown on the combined statements
• of revenue, expenditures and changes in fund balances - budget and
actual - governmental funds is as follows:
GENERAL FUND
Actual expenditures $2,409,284
Encumbrances - September 30, 1992 57, 178
Less prior year encumbrances paid (27.811)
Adjustment for encumbrances 29, 367
Expenditures on Budgetary Basis $2,438,651
17
C J.D. GILBERT & COMPANY
CITY OF OI EECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 2 - COMPARISION OF BUDGET TO ACTUAL RESULTS (Continued)
Prior year encumbrances paid includes $11,318 not recorded as
encumbered at September 30, 1991, due to an error in accumulating
the 1991 amounts.
NOTE 3 - CASH AND INVESTMENTS
Florida Statutes require state and local governmental units to
deposit monies with a financial institution classified as a
"Qualified Public Depository", which is a multiple financial
institution pool whereby groups of securities pledged by the
various financial institutions provide common collateral for their
deposits of public funds. This pool is additional insurance to the
federal depository insurance and allows for additional assessments
against the member institutions, providing full insurance for
public deposits. The City had deposits with qualifying
institutions at September 30, 1992 totalling $4,376,765 which is
included in cash and investments in the accompanying combining
balance sheets.
The investment guidelines, as established by local ordinance and
Florida Statutes, allow surplus funds to be invested in the local
government surplus funds trust fund, obligations of the U.S.
government or agencies thereof, banking institutions within the
state and other such institutions within the guidelines of the
state statutes, commercial paper with certain ratings, pre-refunded
municipal obligations, banker's acceptances maturing within one
year, investment agreements, direct and general long-term
obligations of any state with proper credit rating and full faith
and credit pledge, municipal obligations with proper credit rating
and repurchase agreements with maturities of 30 days or less with
organizations with certain stipulations and requirements.
The City's investments are categorized by type to give an
• indication of the level of credit risk assumed by the City at year
end. Category 1 includes investments that are insured or
registered or for which the securities are held by the City or its
• agent in the City's name. Category 2 includes uninsured and
unregistered investments for which the securities are held by the
City's custodian in the City's name. Category 3 includes uninsured
and unregistered investments for which the securities are held by
the City's custodian but not in the City's name.
18
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 3 - CASH AND INVESTMENTS (Continued)
The following is a list of the City's investments, not
collateralized by the "Qualified Public Depository" pool, by
categories of risks established by Governmental Accounting
Standards Board Statement No. 3:
Book Market
. Value Value
Securities which are uninsured and
unregistered, with securities
• held by the counterparty's trust
department or agent but not in
the City's name (Category 3) :
Pension trust funds:
Police officers' pension trust
fund:
Cash equivalents $ 19,066 $ 19,066
Government and agency
securities 763 ,844 812,684
Corporate stocks 264,474 325, 169
Cash and accrued income 22,248 22,248
1,069 ,632 1. 179. 167
Fire fighters' pension trust fund:
Cash equivalents 8, 037 8, 037
Government and agency securities 263,467 279,973
Corporate stocks 91, 071 114,972
Cash and accrued income 7,709 7.709
370,284 410,691
General employees' pension trust
fund:
Cash equivalents 36,087 36, 087
Government and agency securities 963,363 1,028,731
Corporate stocks 343,375 428,691
• Cash and accrued income 27,810 27 ,810
1, 370,635 1.521.319
Total Investments $2,810,551 $3, 111,177
19
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 4 - PROPERTY TAXES
The City's property tax is levied annually on the real and personal
property located in the City on January 1st of the prior year. The
assessed value on which the 1991-92 levy was based was
• $135,523,693 . The assessed values are established by the
Okeechobee County Property Appraiser. Tax collections by the
Okeechobee County Tax Collector begin normally in November of each
year with a due date of March 31 of the following year. Current
tax collections for the year ended September 30, 1992 were 97.50%
of the total tax levied.
The City is permitted by state law to levy taxes up to 10 mills of
assessed valuation for the general fund. The tax rate for the
1991-92 fiscal year was 4. 15 mills.
NOTE 5 - FIXED ASSETS - PROPRIETARY FUND
The carrying value of fixed assets recorded in the proprietary fund
as of September 30, 1991 is summarized as follows:
Utility Plant Construction
In Service In Progress Total
Balance September 30,
1991 $11,244, 024 $4,834,212 $16,078,236
Additions 159,745 809, 014 968,759
Transfers 4,736,110 (4,736, 110) -
16, 139,879 907, 116 17, 046,995
Less Accumulated
Depreciation 3,595.071 - 3,595,071
Balance September 30,
1992 $12,544,808 $ 907, 116 $13,451,924
Included in the proprietary fund construction in progress is
$86,234 which represents engineering fees and construction costs
for the expansion to the wastewater treatment system; $782, 127 of
engineering fees and other costs related to the water plant
expansion project; and $38,755 in engineering fees and professional
services for water facilities and fire hydrants.
20
•
•
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 5 - FIRED ASSETS - PROPRIETARY FUND (Continued)
The City has not maintained adequate detailed fixed asset records
to support the cost of the water and sewer utility plant in service
for assets acquired prior to October 1, 1981. At September 30,
' 1992, the cost of assets acquired prior to October 1, 1981 was
$4, 032,978 (less $2,014, 622 of accumulated depreciation) .
_ Depreciation expense recorded for these assets was $100,824 in
1992.
NOTE 6 - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
Balance Balance
October 1,1991 Additions Retirements September 30,1992
Land and improvements S 805,358 S - S - $ 805,358
• Buildings and improvements 402,703 - - 402,703
Furnishings and equipment 427,714 33,487 - 461,201
Rolling stock 332,095 - - 332.095
Totals $1,967,870 $33,487 S - $2,001,357
The City has not maintained adequate detailed fixed asset records
to support the cost of general fixed assets acquired prior to
October 1, 1981. At September 30, 1992, the value assigned to
general fixed assets acquired prior to October 1, 1981 was
$852,904.
NOTE 7 - LONG-TERM DEBT
Long-term debt as of September 30, 1992 is summarized as follows:
GENERAL LONG-TERN DEBT
General Obligation Bonds:
$480,500 original issue General Obligation
Bonds, due in remaining annual installments
of $30,000 to $35, 000 through July 1, 1996;
interest rates ranging from 6.75% to 6.875% $ 130,000
21
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 7 - LONG-TERM DEBT (Continued)
Notes Payable:
8.23% capital improvement notes to a bank,
payment of $195,753, including interest,
due annually through December 15, 1988;
• collateralized by and payable from a pledge
of the City's share of a state revenue
sharing gasoline tax 1, 101,195
Total General Long-Term Debt $1, 141, 195
PROPRIETARY FOND LONG-TERN DEBT
Revenue Bonds:
$5, 000, 000 original issue Water and Sewer
Refunding and Improvement Revenue Bonds,
Series 1987, due in remaining annual
principal installments ranging from
$75, 000 to $405,000 through January 1,
2017; interest ranging from 5.75% to
7.875% (issue included $1,235, 000 of
Serial Bonds and $3,765, 000 of Term
Bonds) ; net of unamortized discount of
$89,212 $4,655,788
$4,830, 000 original issue Water and Sewer
Improvement Revenue Bonds, Series 1989,
due in remaining annual principal
installments ranging from $95,000 to
$370, 000 through January 1, 2015; interest
ranging from 6% to 7. 125% (issue included
$1, 535, 000 of Serial Bonds and $3,295, 000
of Term Bonds) ; net of unamortized discount
• of $48,575 4,751,425
Total Proprietary Fund Long-Term Debt $9,407,213
22
J.D. GILBERT 6. COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 7 - LONG-TERM DEBT (Continued)
The Water and Sewer Refunding and Improvement Revenue Bonds, Series
1987 and the Water and Sewer Improvement Revenue Bonds, Series
1989, are collateralized by a pledge of the net revenues of the
water and certain sewer system, public service taxes, certain
franchise revenues and state revenue sharing funds. The bond
covenants state, among other things, that the City may not lease,
sell or encumber the utility plant assets in any manner and that
various funds are required to be established and maintained for
purposes of a sinking fund, reserve fund and various other
accounts.
Additional covenants contain provisions which restrict the issuance
of additional revenue bonds unless the pledged revenues are equal
to or greater than 125% of maximum bond service requirement coming
due in any subsequent year and the net revenues, as adjusted, are
not less than 80% of the maximum bond service requirement coming
due in any subsequent year on present outstanding bonds and
additional bonds issued.
The 1987 and 1989 Water and Sewer Refunding and Improvement Revenue
Bonds ordinance requires, among other things, deposits on a monthly
basis of amounts necessary to provide for semiannual interest and
annual principal requirements. The sinking and reserve funds on
deposit at September 30, 1992 are as follows:
1987 1989
Revenue Revenue
MAXIMUM RESERVE Bonds Bonds
Sinking Fund $147, 190 $153,879
Remaining in construction fund
account - 512,265
Totals $147, 190 $666, 144
23
C J.D. GILBERT IS COMPANY
. CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 7 - LONG-TERM DEBT (Continued)
A summary of changes in all long-term debt for the year ended September 30,1992 is as follows:
PROPRIETARY FUND
GENERAL LONG-TERM DEBT WATER AND SEWER REVENUE BONDS
GENERAL
OBLIGATION NOTES 1987 1989
BONDS PAYABLE TOTAL SERIES SERIES TOTAL
Balance at September 30,1991 $160,000 $1,115,169 $1,275,169 $4,815,000 $4,830,000 $9,645,000
Payments 30,000 103,974 133,974 70,000 30,000 100,000
130,000 1,011,195 1,141,195 4,745,000 4,800,000 9,545,000
Less unamortized bond discount - - - 89,212 48,575 137,787
Balance at September 30, 1992 $130,000 $1,011,195 $1,141,195 $4,655,788 $4,751,425 $9,407,213
Annual principal requirements for
the next five years and thereafter
are as follows:
Year ending-
1993 $30,000 $112,532 $142,532 $75,000 $95,000 $170,000
1994 30,000 121,793 151,793 75,000 100,000 175,000
1995 35,000 131,817 166,817 80,000 105,000 185,000
1996 35,000 142,665 177,665 85,000 115,000 200,000
1997 - 154,406 154,406 95,000 120,000 215,000
Thereafter - 347,982 347,982 4,335,000 4,285,000 8,600,000
TOTALS $130,000 $1,011,195 $1,141,195 $4,745,000 $4,800,000 $9,545,000
The annual requirements to amortize all debt outstanding as of September 30,1992,including interest payments aggregating$11,175,041 are
as follows:
PROPRIETARY FUND
GENERAL LONG-TERM DEBT WATER AND SEWER REVENUE BONDS
GENERAL TOTAL
OBLIGATION NOTES 1987 1989 LONG-TERM
BONDS PAYABLE TOTAL SERIES SERIES TOTAL DEBT
Year Ending-
1993 $38,894 $195,753 $234,647 $436,509 $422,665 $859,174 $1,093,821
1994 36,831 195,753 232,584 431,934 421,765 853,699 1,086,283
1995 39,769 195,753 235,522 432,049 420,486 852,535 1,088,057
1996 37,362 195,753 233,115 431,883 423,692 855,375 1,088,490
1997 - 195,753 195,753 435,649 421,348 856,997 1,052,750
Thereafter - 391,506 391,506 8,556,084 7,504,245 16,060,329 16,451,835
TOTALS $152,856 $1,370,271 $1,523,127 $10,723,908 $9,614,201 $20,338,109 $21,861,236
The annual changes in general long-term debt accrued vacation and medical leave benefits as of September 30,1992 are as follows:
OCTOBER 1, 1991 INCREASE SEPTEMBER 30,1992
$80,618 $12,506 $93,124
24
C J.D. GILBERT & COMPANY
_ CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 8 - PRIOR YEAR DEFEASANCE OF DEBT
In 1987, the City defeased the 1983 Series A Water and Sewer
Revenue Bonds by depositing sufficient funds in an irrevocable
trust to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and the liability for
the defeased bonds are not included in the City's financial
statements. At September 30, 1992, $805, 000 of bonds outstanding
are considered defeased.
NOTE 9 - INTERFUND RECEIVABLES AND PAYABLES
The following is a summary of amounts due from and due to other
funds:
Due from Due to
Other Funds Other Funds
General fund $ 279 $ -
Debt service fund - 435
• Proprietary fund 2,631 -
Fiduciary fund - 2 ,475
Total all Funds $2,910 $2,910
NOTE 10 - CONTRIBUTED CAPITAL
The source and additions to contributed capital are as follows:
Balance Balance
October 1, September 30,
1991 Additions 1992
. Connection fees $ 421,758 $ - $ 421,758
Developers 338,761 - 338,761
Federal Grant 953, 108 43,745 996,853
Local Public Works Grant 417,740 - 417,740
Federal Revenue Sharing Funds 619, 572 - 619,572
General Fund 100, 000 - 100,000
Okeechobee Beach Water
Association 275,000 - 275, 000
Environmental Protection
Agency Grant 1,946, 573 - 1,946,573
Totals $5, 072, 512 $43 ,745 $5, 116,257
25
C J.D. GILBERT & COMPANY
,
CITY OF OKEECHOBEE, FLORIDA
•
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 11 - SEGMENT INFORMATION
The City maintains one enterprise fund, a water and sewer
operation. Working capital at September 30, 1992 for this fund was
$1,200,209.
NOTE 12 - PENSION PLANS
} The City has three pension plans, under a single employer public
employee retirement system, covering substantially all the City's
- regular employees. The plans were established by the City in
accordance with the City charter and state statutes. Total pension
expense for the year was $54,682 based on a covered payroll and a
total payroll as follows:
Covered
Payroll as
Covered Total Percent of
Payroll Payroll Total Payroll
General $864,543 $1, 013 ,292 85. 3%
Police 349,507 409, 615 85. 3%
Fire 196,630 217,511 90.4%
All regular employees working over 20 hours per week are eligible
to participate on the date of employment following attainment of
age 18. Participation is mandatory. Normal retirement is provided
for at age 65 (60 for fire and police) and 5 years of service (10
years for fire and police) , or at 30 years of service regardless of
age. The benefit is calculated at 1.6% (2% for fire and police) of
average monthly earnings times years of continuous service with the
City. Benefits are payable by monthly annuity for 10 years certain
and life thereafter with other options available. Early retirement
is provided for at age 60 (age 55 for fire and police) and 10 years
of participation. Death and disability benefits are also available
. through the plans. Upon termination of employment with less than
5 years of service (10 years for fire and police) the plan refunds
accumulated employee contributions. After 5 years of service (10
• years for fire and police) the pension benefit is accrued to date
of termination and payable at normal retirement age if employee
contributions are left in the fund.
_ 26
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 12 - PENSION PLANS (Continued)
The significant actuarial asumptions used to compute the
actuarially determined contribution requirement are the same as
those used to compute the pension benefit obligation. The
actuarially determined pension contribution for the year ended
September 30, 1992, which consisted entirely of normal cost, was as
follows:
•
General $ (14,221)
Police 5,724
Fire 5,593
The actual City and employees contributions by fund for the year
ended September 30, 1992 were as follows:
City Employees
General fund $27,349 $49,635
Proprietary fund 27 ,333 22 ,257
. Totals $54, 682 $71,892
The plans covering the City's fire fighters and police officers are
also funded by the State of Florida from a tax on fire insurance
premiums collected. State contributions to the fire fighters and
police officers plans totalled $17,717 and $50,307, respectively,
during the year ended September 30, 1992.
The pension benefit obligation shown below is a standardized
disclosure measurement established by the Governmental Accounting
Standards Board (GASB) Statement number 5 that, with some
exceptions, must be covered by a PERS. The standardized
measurement is the actuarial present value of credited projected
benefits. This pension valuation method reflects the present value
of pension benefits, adjusted for the effects of projected salary
increases an step-rate benefits, estimated to be payable in the
future as a result of employee service to date.
27
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 12 - PENSION PLANS (Continued)
The standardized measure of the pension benefit obligation and the
net assets available for benefits at September 30, 1992 (the most
recent valuation date) is as follows:
Police Fire General
Pension benefit obligation:
Retirees and beneficiaries
currently receiving
benefits and terminated
employees entitled to
benefits but not yet
receiving them $ - $ 7,324 $ 324,147
Current employees:
Accumulated employee
contributions including
allocated investment
. income 169, 666 47,823 353, 153
Employer-financed vested 222, 032 38, 184 283,805
Employer-financed
- nonvested 51,695 32,999 20,352
Total pension benefit
obligation 443,393 126, 330 981,457
Net assets available for
benefits (at cost which
approximates market-see
market value information
at Note 3) 1,075,827 376, 050 1.390,819
Assets in excess of
pension benefit
obligation $ 632,434 $249,720 $ 409,362
•
There were no changes in benefit provisions or actuarial
assumptions and methods since the previous actuarial valuation.
Principal actuarial assumptions used in the most recent actuarial
valuation are summarized as follows:
•
28
• a J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 12 - PENSION PLANS (Continued)
Mortality - The 1983 Group Annuity Mortality Table.
Interest - 8% per year compounded annually, after paying
investment management fees.
Retirement age - 60 for police officers and fire fighters, 65
for all other employees, immediately if over assumed
retirement age.
Salary increases - 6% for police and general; 7% for fire
fighters, until the assumed retirement age.
Funding method - Aggregate actuarial cost method.
Administrative expense (other than investment management fees)
$9, 000 for each group.
Three year historical information is disclosed in the accompanying
supplementary information.
NOTE 13 - GRANTS
• Hospice
During the year ended September 30, 1992, the City was awarded a
Community Services Block Grant (92SB-69-07-57-02-076) totalling
$5,526 for local community health and human services assistance.
Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee.
The City received $5,455 under the grant award for the year ended
September 30, 1992 and, upon presentation of invoices by Hospice,
disbursed the funds.
Land Development Regulation
The City was awarded a local government land development regulation
assistance program grant from the State of Florida Department of
Transportation in the amount of $12,500. In 1992, $12,500 was
• recorded as reimbursement for expenditures incurred by the City
relating to the project. Also received was $2,500 applicable to
the prior year grant.
Farmers Home Administration
During 1992, no Farmers Home Administration grant funds were
received in connection with completing construction of the City's
wastewater treatment and collection system. This grant is dated
September 17, 1985, in the original amount of $1, 000, 000; of this
• amount $118, 052 is undisbursed.
29
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1992
NOTE 13 - GRANTS (Continued)
Community Development Block Grant
The City has been awarded a $575, 000 Community Development Block
Grant through the State of Florida Department of Community Affairs.
At September 30, 1992, the City had received draws of $43,745 on
this grant.
NOTE 14 - COMMITMENTS AND CONTINGENCIES
During 1992, the City had rent expenditures of $28,968 under an
operating lease agreement executed April 10, 1992 for public safety
and other vehicles. Lease commitments under this agreement
aggregate $52,801 for 1993 ; $52,801 for 1994 and $52,994 for 1995.
Rent expenditures for the year ended September 30, 1992, under a
prior operating lease for vehicles aggregated $28,551.
The City had contracts for engineering and construction projects in
process at September 30, 1992 that occurred during the normal
course of business amounting to approximately $1, 150, 000.
The City is defendant in a lawsuit filed by a contractor in
February 1992. The City filed a counterclaim against the
contractor in May 1992. The potential exposure to or recovery by
the City is not determinable.
NOTE 15 - SUBSEQUENT EVENT
The City issued Water and Sewer Improvement Revenue Bonds, Series
1992A, with principal of $5,495, 000 in November 1992 . The bonds
are due in annual principal installments of $125, 000 to $430,000
commencing January 1, 1995 through January 1, 2017. The interest
rates on the bonds range from 3.90% to 6.50%. The issue included
$995,000 in serial bonds and $4,500, 000 in term bonds. The
collateral on these bonds is comparable to that of the prior
• revenue bonds as disclosed in Note 7. The proceeds of the bonds
are to be used for construction of a groundwater treatment plant,
improvements in the water distribution system and debt service.
The following table sets forth the debt service payments for the
1992 bonds for the years ending September 30:
•
30
•
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
Year Ended September 30, 1992
NOTE 15 - SUBSEQUENT EVENT (Continued)
Principal Interest Total
1993 $ - $ 223, 113 $ 223, 113
1994 - 334,670 334,670
1995 125,000 332,233 457,233
1996 130,000 327,065 457, 065
1997 135, 000 321,264 456,264
1998-2017 5, 105, 000 3 ,899,673 9,004, 673
$5,495,000 $5,438,018 $10,933,018
•
31
C J.O. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30, 1992
Variance
Favorable
Budget Actual (Unfavorable)
TAXES
Ad valorem taxes $ 554,000 $ 556,468 $ 2,468
Franchise fees 313,900 272,415 (41,485)
Utility service taxes 282, 100 292, 615 10,515
Public service taxes 2 , 000 949 (1,051)
1, 152.000 1, 122,447 (29,553)
INTERGOVERNMENTAL
• State shared revenue:
Cigarette tax - Two Cent 86,000 75,726 (10,274)
Revenue sharing 172, 000 176, 013 4, 013
Mobile home licenses 2, 000 2,994 994
One-half cent sales tax 168, 000 174, 068 6, 068
Alcoholic beverage
licenses 1,200 1,252 52
Gasoline tax refund 1,500 2, 080 580
Local option gasoline tax 290,700 288,249 (2,451)
Fire fighters supplement - (347) (347)
721.400 720,035 (1. 365)
Shared revenue from other
local units:
County occupational
licenses 4,500 6,062 1,562
City share of 5 and 6
cent gas tax 110, 000 146,719 36,719
114,500 152 ,781 38,281
835,900 872,816 36,916
CHARGES FOR SERVICES
Sanitation fees 264, 000 203, 005 (60,995)
Highway maintenance
contract 12,500 15,000 2,500
Miscellaneous 450 783 333
276,950 218,788 (58, 162)
32
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
(CONTINUED)
Year Ended September 30, 1992
Variance
Favorable
Budget Actual (Unfavorable)
LICENSES AND PERMITS
• Occupational licenses
and Regulatory fees 47,250 45,002 (2,248)
FINES AND FORFEITURES
Court fines 20, 000 43, 590 23,590
Police education 500 760 260
Code enforcement fines 300 265 (35)
20,800 44,615 23 ,815
INTEREST INCOME 25,600 29,246 3,646
MISCELLANEOUS
•
Comprehensive Planning
Grant 7,500 14,920 7,420
Hospice Grant 5,625 5,455 (170)
Miscellaneous
Improvements 3, 000 20,972 17,972
Sale of assets 40, 000 34, 361 (5, 639)
Rents and royalties 100 540 440
Refunds of prior year
expenditures 100 14 (86)
Miscellaneous and other 21,200 34, 088 12,888
77,525 110,350 32 ,825
Total Revenue $2,436, 025 $2,443,264 $ 7,239
33
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1992
ENCUMBRANCES ACTUAL ON VARIANCE
BUDGETARY FAVORABLE
BUDGET ACTUAL 1991 1992 BASIS (UNFAVORABLE)
PUBLIC SAFETY
Law enforcement:
Personal services $631,670 $626,721 - - $626,721 $4,949
Operating expenses 176,400 162,885 205 47 162,727 13,673
Capital outlay 7,000 2,796 2,796 - 0 7,000
815,070 792,402 3,001 47 789,448 25,622
Fire control:
Personal services 278,440 269,505 - - 269,505 8,935
Operating expenses 81,400 70,302 130 46 70,218 11,182
Capital outlay 18,000 10,386 - - 10,386 7,614
377,840 350,193 130 46 350,109 27,731
1,192,910 1,142,595 3,131 93 1,139,557 53,353
GENERAL GOVERNMENT
Legislative:
Personal services 42,750 41,414 - - 41,414 1,336
Operating expenses 17,625 19,047 - - 19,047 (1,422)
Allocation of administrative charges (18,000) (18,000) - - (18,000) 0
42,375 42,461 - - 42,461 (86)
Executive-city administrator: .
Personal services 70,110 70,267 - - 70,267 (157)
Operating expenses 16,200 9,330 - - 9,330 6,870
Allocation of administrative charges (29,000) (29,000) - - (29,000) 0
57,310 50,597 - - 50,597 6,713
Executive-city clerk:
• Personal services 56,070 56,011 - - 56,011 59
Operating expenses 13,370 8,625 72 2,000 10,553 2,817
Allocation of administrative charges (12,000) (12,000) - - (12,000) 0
57,440 52,636 72 2,000 54,564 2,876
Financial and Administrative:
Personal services 62,780 61,308 - - 61,308 1,472
Operating expenses 25,400 23,055 - - 23,055 2,345
Allocation of administrative charges (20,000) (20,000) - - (20,000) 0
68,180 64,363 - - 64,363 3,817
General services:
Personal services 82,490 82,485 - - 82,485 5
Operating expenses 76,575 87,941 7,088 114 80,967 (4,392)
Capital outlay 2,200 3,592 1,904 - 1,688 512
Allocation of administrative charges (21,000) (21,000) - - (21,000) 0
140,265 153,018 8,992 114 144,140 (3,875)
Judicial:
Operating expenses 20,000 20,060 - - 20,060 (60)
385,570 383,135 9,064 2,114 376,185 9,385
TRANSPORTATION
_ Road and street facilities:
Personal services 220,290 213,400 - - 213,400 6,890
Operating expenses 206,530 162,707 752 1,376 183,331 43,199
Capital outlay 390,500 83,597 14,864 53,595 122,328 268,172
817,320 459,704 15,616 54,971 499,059 318,261
PHYSICAL ENVIRONMENT
Garbage/solid waste control services:
Operating expenses 237,800 187,229 - - 187,229 50,371
HEALTH AND HUMAN SERVICES
Operating expenses 42,825 47,643 - - 47,643 (4,818)
DEBT SERVICE
Principal 103,974 103,974 - - 103,974 0
Interest 91,779 85,004 - - 85,004 6,775
195,753 188,978 - - 188,978 6,775
TOTAL EXPENDITURES $2,871,978 $2,409,284 $27,811 $57,178 $2,438,651 $433,327
34
•
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
DEBT SERVICE FUND
STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1992
Variance
Favorable
Budget Actual (Unfavorable)
REVENUE
Ad valorem taxes $52,100 $61,918 $9,818
Interest income 5,500 1,800 (3,700)
Total Revenue 57 , 600 63,718 6,118
EXPENDITURES
Bond principal retirements 30, 000 30,000 -
Bond interest expense 10,956 10,956 -
Professional fees 500 1,000 (500)
Total Expenditures 41456 41,956 (500)
Excess of Revenue Over
Expenditures $16, 144 $21,762 $5,618
35
J.D. GILBERT & COMPANY
. CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING BALANCE SHEETS
Year Ended September 30, 1992
Police Fire General
Officers' Fighters Employees'
Pension Pension Pension
Trust Trust Trust
Fund Fund Fund Total
ASSETS
Cash $ 8, 364 $ 6,522 $ 25,459 $ 40, 345
Investments 1,069, 632 370,284 1, 370, 635 2,810,551
$1, 077,996 $376,806 $1,396,094 $2,850,896
LIABILITIES
Accounts payable $ 2, 169 $ 756 $ 2,800 $ 5,725
Due to City General
Fund - - 2,475 2,475
2,169 756 5,275 8,200
FUND BALANCES
I. Reserved for
employees'
retirement 1,075,827 376,050 1, 390,819 2,842. 696
Total Liabilities
and Fund Balances $1,077, 996 $376,806 $1,396,094 $2,850,896
36
GI J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING STATEMENTS OF REVENUE, EXPENSES
AND CHANGES IN FUND BALANCES
Year Ended September 30, 1992
Police Fire General
Officers' Fighters Employees'
Pension Pension Pension
Trust Trust Trust
Fund Fund Fund Total
OPERATING REVENUE
State tax on insurance
. premiums $ 50,307 $ 17,717 $ - $ 68, 024
Employer's contributions - 535 54, 147 54, 682
Employees' contributions 17,780 9,913 44, 199 71,892
Investment income 67,994 23, 398 90,214 181, 606
Gain on sale of
securities 19,836 6.642 23 ,910 50, 388
Total Operating
Revenue 155,917 58,205 212,470 426,592
. OPERATING EXPENSES
Employees' contribution
refunds and interest 7,784 2, 342 13,308 23 ,434
• Retirement benefits - - 28, 162 28, 162
Professional services 14,963 9,684 17,481 42, 128
Administrative expense - 6 11 17
Total Operating
Expenses 22,747 12,032 58,962 93 ,741
Net Income 133, 170 46, 173 153 ,508 332 ,851
FUND BALANCES
Beginning of year 942 .657 329.877 1, 237, 311 2.509,845
End of year $1, 075,827 $376, 050 $ 1, 390,819 $2,842, 696
37
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE
EMPLOYEE PENSION TRUST FUNDS
HISTORICAL INFORMATION
September 30, 1992, 1991 and 1990
(Unaudited)
For the years ended September 30,1992,1991 and 1990,the pension benefit obligation and net assets available for benefits and net assets
available for benefits expressed as percentages of the pension benefit obligation,were as follows:
1992
Police Fire General
Net assets available for
benefits as a percentage of
pension benefit obligation 243% 298% 142%
Assets in excess of pension
benefit obligation as a
_ percentage of covered payroll 181% 127% 47%
Contributions as an approximate
percent of annual covered
payroll:
Employer - <1% 6%
Employee 5% 5% 5%
1991
Police Fire General
Net assets available for
benefits as a percentage of
pension benefit obligation 241% 331% 139%
Assets in excess of pension
benefit obligation as a
percentage of covered payroll 157% 125% 40%
Contributions as an approximate
percent of annual covered
payroll:
Employer - <1% 6%
Employee 5% 5% 5%
1990
Police Fire General
Net assets available for
benefits as a percentage of
pension benefit obligation 212% 276% 120%
Assets in excess of pension
benefit obligation as a
percentage of covered payroll 145% 114% 22%
Contributions as an approximate
percent of annual covered
payroll:
- Employer - <1% 6%
Employee 6% 5% 5%
Historical information from 1987 through 1992 is presented in a separately issued report for the pension employees retirement system
(PERS). As the valuation for the year ended September 30,1987 was the first year using the valuation method described herein,ten-year
trend information is not available.
38
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
Year Ended September 30, 1992
DESCRIPTION COVERAGE
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance -
$250 deductible) $3,450,400
Scheduled Property Floater ($250 deductible) $362, 100
Public Officials Bonds $20,000
• UMBRELLA POLICY $1, 000,000
LAW ENFORCEMENT LIABILITY
Bodily injury, personal injury, property damage
($5,000 deductible) $1, 000,000
WORKERS COMPENSATION AND EMPLOYER'S LIABILITY $500, 000
VEHICULAR EQUIPMENT
Bodily injury and property damage $1, 000,000
Collision ($250 deductible)
Comprehensive ($250 deductible)
PUBLIC OFFICIAL LIABILITY ($5,000 Deductible) $1, 000, 000
. THIRD PARTY POLLUTION LIABILITY COVERAGE
($500 deductible) $1, 000,000
39
• C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
1983 - 1992
ASSESSED VALUES
FISCAL REAL PERSONAL HOMESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1992 $112,820,753 $22,702,940 $135,523, 693 $25,288, 396
1991 106, 606, 185 21,489,024 128,095,209 24,718,577
1990 100,715,930 19, 081, 124 119,797, 054 24,017,296
' 1989 92, 069,710 17,714, 646 109,784, 356 23,841,771
1988 90,523,355 17,276,363 107,799,718 22,969,436
1987 85, 234, 122 15,026,483 100,260,605 21,793,353
1986 70,533,985 14,573, 190 85, 107, 175 20,715, 053
1985 59,835, 384 14, 042,767 73,878, 151 19, 504,959
1984 57,820,098 13, 060, 620 70,880,718 19, 007, 098
1983 54,725, 644 12, 102, 101 66,827,745 17, 665, 060
TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
DEBT GENERAL
FISCAL DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
1992 $62,523 $562,423 . 390 4. 150
1991 59, 597 531,595 . 390 4. 150
1990 56,753 504,594 . 390 4. 150
1989 52, 114 455,605 .390 4. 150
1988 39,231 447, 369 . 300 4. 150
1987 18, 308 416,082 . 150 4 . 150
1986 15,873 361,791 .150 4.251
1985 14, 008 314,056 . 150 4 .251
1984 13,483 307,480 .150 4. 338
1983 12, 674 261,497 . 150 3.913
40
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUE - UNAUDITED
1983 - 1992
GENERAL FUND
STATE
REVENUE
SHARING OCCUPATIONAL UTILITY FINES AND FRANCHISE
YEAR (NOTE) LICENSES TAXES FORFEITURES FEE PERMITS INTEREST
1992 $425,807 $45,002 $292,615 $44,615 $272,414 - $29,246
1991 422,873 34,565 287,490 45,107 289,239 - 32,541
1990 443,090 33,345 278,192 37,829 272,199 - 45,772
1989 439,634 31,828 275,071 46,911 251,532 - 41,761
1988 411,522 38,367 258,229 67,802 234,877 - 27,314
. 1987 409,809 44,888 219,661 49,071 214,036 - 21,618
1986 398,901 41,498 207,756 29,731 206,335 - 30,978
1985 349,607 38,484 196,168 28,092 208,614 16,268 31,791
1984 346,742 42,119 133,768 22,764 185,428 25,508 34,363
1983 329,260 40,138 118,812 20,493 152,921 14,836 25,091
PROPRIETARY FUND
WATER
AND SEWER IMPACT DELINQUENT INTEREST ON HYDRANT
YEAR CHARGES FEES CHARGES MISCELLANEOUS INVESTMENTS TAP FEES RENTAL
1992 $2,511,531 $197,767 $56,280 $44,771 $131,433 $99,782 $13,200
1991 2,268,283 62,200 58,313 49,346 268,588 30,126 13,200
1990 2,116,074 416,792 73,334 50,929 305,306 157,265 12,240
1989 1,580,078 212,077 37,945 68,723 61,811 35,211 12,360
1988 1,632,157 90,640 25,588 50,823 71,998 37,679 9,960
1987 1,388,432 111,964 31,119 31,401 62,864 40,078 9,480
1986 1,341,837 260,382 30,417 21,141 103,288 44,888 9,360
1985 1,130,500 212,012 20,671 8,583 233,511 110,181 7,320
1984 971,227 29,012 14,146 9,663 110,181 20,112 7,320
1983 842,440 26,775 17,372 11,219 52,912 25,163 27,000
NOTE-INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND ONE-HALF CENT SALES TAX
41
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Year Ended September 30, 1992
CASH CASH
OCTOBER 1, SEPTEMBER 30,
1991 1992
FEDERAL GRANTOR/ FEDERAL AWARD BEGINNING ENDING
PROGRAM TITLE CFDA NO. AMOUNT BALANCE RECEIPTS DISBURSEMENTS BALANCE
U.S.DEPARTMENT
OF AGRICULTURE
Farmers Home
Administration 10.418 $1,000,000 $ - $ - $ - $ -
U.S.DEPARTMENT
OF HOUSING AND
URBAN DEVELOPMENT
Passed through State
Department of
Community Affairs 14.219 $575,000 $ - $43,745 $38,755 $4,990
. 42
C J.D. GILBERT & COMPANY
J. D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors, Report on Compliance
with Laws and Regulations
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined financial statements of the City
of Okeechobee, Florida (City) as of and for the year ended
September 30, 1992 and have issued our report thereon dated
February 25, 1993. We did not audit the financial statements of
the Employee Benefit Trust, which are included in the combined
financial statements as the Fiduciary Fund type. Our audit report
was qualified because the City has not maintained adequate detailed
fixed asset records in support of the recorded costs of the water
and sewer utility plant in service in the proprietary fund or the
amounts included in the general fixed asset group of accounts.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
` about whether the combined financial statements are free of
material misstatement.
Compliance with laws, regulations, contracts and grants
applicable to the City is the responsibility of the City's
management. As part of obtaining reasonable assurance about
whether the combined financial statements are free of material
misstatement, we performed tests of the City's compliance with
certain provisions of laws, regulations, contracts and grants.
However, our objective was not to provide an opinion on overall
compliance with such provisions.
The results of our tests indicate that, with respect to the
items tested, the City complied, in all material respects, with the
provisions referred to in the preceding paragraph. With respect to
items not tested, nothing came to our attention that caused us to
believe that the City had not complied, in all material respects,
with those provisions.
This report is intended for the information of the Mayor and
City Council, management and the Auditor General of the State of
Florida. This restriction is not intended to limit the
distribution of this report, which is a matter of public record.
f
J.D. Gilbert & Company, CPAs
February 25, 1993
43
1 251 East Sample Road•Pompano Beach,Florida 33064•(3053761 -1250• FAX(305)785-6826
J. D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Single Audit Report on Compliance with Requirements
Applicable to Ronmajor Federal Financial
Assistance Program Transactions
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
In connection with our audit of the 1992 combined financial
statements of the City of Okeechobee, Florida (City) , and with our
study and evaluation of the City's internal control systems used to
administer federal financial assistance programs, as required by
Office of Management and Budget Circular A-128, "Audits of State
and Local Governments", we selected certain transactions applicable
to certain nonmajor federal financial assistance programs for the
year ended September 30, 1992. As required by OMB Circular A-128,
we have performed auditing procedures to test compliance with the
requirements governing types of services allowed or unallowed and
any other special tests and provisions that are applicable to those
transactions. Our procedures were substantially less in scope than
an audit, the objective of which is the expression of an opinion of
the City's compliance with these requirements. Accordingly, we do
not express such an opinion.
With respect to the items tested, the results of those
procedures disclosed no material instances of noncompliance with
the requirements listed in the preceding paragraph. With respect
to items not tested, nothing came to our attention that caused us
to believe that the City had not complied, in all material
respects, with those requirements.
This report is intended for the information of the Mayor and
City Council, management, State Department of Community Affairs and
the Auditor General for the State of Florida. This restriction is
not intended to limit the distribution of this report, which is a
matter of public record.
04011P.
•
J.D. Gilbert & Company, CPAs
February 25, 1993
44
1 251 East Sample Road• Pompano Beach, Florida 33064•(305)781 -1 250• FAX(305)785-6826
elCill J. D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Single Audit Combined Report on the Internal Control Structure
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined financial statements of the City
of Okeechobee, Florida (City) , as of and for the year ended
September 30, 1992, and have issued our report thereon dated
• February 25, 1993 . We did not audit the financial statements of
the Employee Benefit Trust, which are included in the combined
financial statements as the Fiduciary Fund Types. Our audit report
was qualified because the City has not maintained adequate detailed
fixed asset records in support of the recorded costs of the water
and sewer utility plant in service in the proprietary fund or the
amounts included in the general fixed asset group of accounts.
We conducted our audits in accordance with generally accepted
auditing standards; Government Auditing Standards, issued by the
Comptroller General of the United States; and Office of Management
and Budget (OMB) Circular A-128, Audits of State and Local Governments.
. Those standards and OMB Circular A-128 require that we plan and
perform the audit to obtain reasonable assurance about whether the
combined financial statements are free of material misstatement and
about whether the City compiled with laws and regulations,
noncompliance with which would be material to a federal financial
assistance program.
In planning and performing our audit for the year ended
September 30, 1992, we considered the City's internal control
structure in order to determine our auditing procedures for the
purpose of expressing our opinion on the City's combined financial
statements and on its compliance with requirements applicable to
its federal financial assistance program and not to provide
assurance on the internal control structure.
. The management of the City is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of internal
control structure policies and procedures. The objectives of an
internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition, that
transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
combined financial statements in accordance with generally accepted
45
1 251 East Sample Road• Pompano Beach,Florida 33064•(305)781 -1 250• FAX(305)785-6826
The Honorable Mayor and
Members of the City Council
February 25, 1993
accounting principles, and that federal financial assistance
programs are managed in compliance with applicable laws and
regulations. Because of inherent limitations in any internal
control structure, errors, irregularities, or instances of
noncompliance may nevertheless occur and not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that procedures may become inadequate because
of changes in conditions or that the effectiveness of the design
and operation of policies and procedures may deteriorate.
For the purpose of this report, we have classified the
significant internal control structure policies and procedures in
the following categories:
Activity Cycles:
• Revenue/receipts
• Purchases/disbursements
• Payroll/personnel
General Requirements:
• Political activity
• Civil rights
• Davis-Bacon Act
• Federal financial reports
• Specific Requirements
• Type of services
• Matching
• Special Reporting Requirements
• Special Tests and Provisions
For all of the internal control structure categories listed
above, we obtained an understanding of the design of relevant
policies and procedures and determined whether they have been
placed in operation, and we assessed control risk.
During the year ended September 30, 1992, the City had no
major federal financial assistance programs and expended 88% of its
federal financial assistance under a nonmajor federal financial
assistance program with the U.S. Department of Housing and Urban
Development.
We performed tests of controls, as required by OMB Circular A-
128, to evaluate the effectiveness of the design and operation of
internal control structure policies and procedures that we
considered relevant to preventing or detecting material
noncompliance with specific requirements, general requirements, and
requirements governing claims for advances and reimbursements that
are applicable to the aforementioned nonmajor federal financial
assistance program. Our procedures were less in scope than would
46
J.D. GILBERT & COMPANY
•
The Honorable Mayor and
Members of the City Council
February 25, 1993
be necessary to render an opinion on these internal control
structure policies and procedures. Accordingly, we do not express
such an opinion.
We noted certain matters involving the internal control
structure and its operation that we consider to be reportable
conditions under standards established by the American Institute of
Certified Public Accountants. Reportable conditions involve
matters coming to our attention relating to significant
deficiencies in the design or operation of the internal control
• structure that, in our judgment, could adversely affect the City's
ability to record process, summarize, and report financial data
consistent with the assertions of management in the combined
• financial statements or to administer federal financial assistance
programs in accordance with applicable laws and regulations.
Purchases
In our review of cash disbursements, we noted that some
purchase orders are dated subsequent to the receipt of the
related goods or services. To ensure that all goods or
services have been properly authorized, purchase orders should
be prepared and approved prior to acquisition.
A material weakness is a reportable condition in which the
design or operation of one or more of the internal control
structure elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be
material in relation to the combined financial statements being
audited or that noncompliance with laws and regulations that would
be material to a federal financial assistance program may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above. However, we
noted the following matters involving the internal control
•
structure and its operation that we consider to be material
weaknesses as defined above. These conditions were considered in
determining the nature, timing, and extent of procedures to be
performed in our audit of the combined financial statements of the
City, and of its compliance with requirements applicable to its
federal financial assistance programs for the year ended September
30, 1992 and this report does not affect our report thereon dated
February 25, 1993.
47
J.D. GILBERT & COMPANY
The Honorable Mayor and
Members of the City Council
February 25, 1993
Fined Asset Records and Controls
The City has not maintained adequate detailed fixed asset
records in support of the recorded costs of the water and
sewer utility plant in service or the amounts included in the
general fixed assets group of accounts. We were unable to
obtain sufficient supporting documentation to form an opinion
with respect to the stated costs of property items acquired in
years prior to October 1, 1981 nor the accumulated
depreciation applicable to the water and sewer utility plant
• in service at September 30, 1992 and the depreciation expense
for the year then ended.
The City has contracted with a firm to evaluate the historic
cost or donated value of all existing physical assets of the
City. The project is not yet completed. Once complete
records are established the City should ensure that additional
acquisitions and disposals are properly recorded and accounted
for. Additionally, a physical inventory of fixed assets
should be performed at least every two years.
We also noted other matters involving the internal control
structure and its operation that we have reported to the management
of the City in a separate letter dated February 25, 1993.
This report is intended for the information of the Mayor and
City Council, management, and the Department of Community Affairs
and the Auditor General for the State of Florida. This restriction
is not intended to limit the distribution of this report, which is
a matter of public record.
J.D. Gil•ert & Company, CPAs
February 25, 1993
48
J.D. GILBERT & COMPANY
J. D. GILBERT • COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
Management Letter
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined financial statements of the City
of Okeechobee, Florida (City) for the year ended September 30,
1992, and have issued our report thereon dated February 25, 1993.
We did not audit the financial statements of the Employee Benefit
• Trust included in the combined financial statements. The following
comments are submitted in accordance with the Rules of the Auditor
General of the State of Florida, Chapter 10.550. Additional
comments on the internal control structure appear in a separate
letter report.
Violations of Laws, Rules and Regulations
Which Do Not Materially Affect the Financial Statements
In the course of our audit we noted that the rules regarding
the issuance of IRS Forms 1099 for non-employee compensation have
not been followed in all applicable cases. The City is not
adequately monitoring non-recurring services for applicability to
the 1099 rules. We recommend that all payments for non-employee
services rendered to the City be supported by a statement as to the
recipients incorporation status and federal identification or
social security number, as applicable.
We also noted one instance where the withholding for an
employee's paychecks was not made in accordance with the
withholding allowances claimed on his form W-4. This appeared to
be an isolated incident.
Recommendations to Improve the City's Present Financial
Management, Accounting Procedures, and Internal Control
Some of the captions for the various cash accounts appearing
in the computer-generated general ledger of the City do not
properly describe the funds included in the account balance. As a
result, use of the general ledger in interim evaluations of cash
position can be misleading. We recommend that account captions be
changed to properly reflect the nature of and restrictions on the
related cash balances.
Status of Recommendations Made in the Prior Year
Management Letter
Grants - No problems were noted in this regard in the current year
procedures.
49
1 251 East Sample Road• Pompano Beach, Florida 33064•[305)791 -1250• FAX[305)785-6826
The Honorable Mayor and
Members of the City Council
February 25, 1993
Cash - The City invests large sums of money in bank certificates
of deposit. The City has re-evaluated their investments subsequent
to September 30, 1992, to increase the yield achieved.
Rules of the Auditor General - As noted in the "Single Audit Combined
Report on Internal Control Structure" , the City is still in the
process of improving controls over fixed assets.
sss
This letter is intended solely for the use of the Mayor and
City Council, management and the Auditor General of the State of
Florida. This restriction is not intended to limit the
distribution of this letter, which is a matter of public record.
'-----j-------,_::), r-c.-- .-q5 / (--
J.D. Gilbert & Company, CPAs
February 25, 1993
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50
".7 J.D. GILBERT & COMPANY