Audit Report 09.30.1996
GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1996
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
September 30,1996
CITY COUNCIL
James E. Kirk
Mayor, Chairman
Noel A. Chandler
Councilmember
Mike G. O'Connor
Councilmember
ADMINISTRATION
John J. Drago
City Administrator
General Services Director
Bonnie S. Thomas, CMC
City Clerk
Robert M. Delorme
Finance Director
John Cook
City Attorney
,
Dowling R. Watford, Jr.
Councilmember
Robert Oliver
Councilmember
Louis Keith Tomey II
Chief of Fire
Larry Mobley
Chief of Police
Charles Elders
Director of Public Works
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
September 30,1996
TABLE OF CONTENTS
PAGE
Independent Auditors' Report ................................................. 1-2
General Purpose Financial Statements:
Combined Balance Sheets - All Fund Types and Account Groups ................... 3
Combined Statement of Revenue, Expenditures and Changes in Fund Balances -
All Governmental Fund Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
Combined Statement of Revenue, Expenditures and Changes in Fund Balances -
Budget and Actual - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
Statement of Revenue, Expenditures and Changes in Fund Balances - Fiduciary
Fund Type - Employee Pension Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6
Notes to Combined Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-22
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and Actual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23-24
Schedule of Expenditures - Budget and Actual ............................... 25
Debt Service Fund -
Statement of Revenue and Expenditures - Budget and Actual. . . . . . . . . . . . . . . . . . .. 26
Employee Pension Trust Funds -
Combining Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 27
Combining Statements of Revenue, Expenses and Changes in Fund Balances. . . . . .. 28
Historical Information (Unaudited) ........................................ 29
Unaudited Information:
Summary ofInsurance Coverage - Unaudited .................................. 30
Schedule of Assessed Values, Tax Levies and Rates - Unaudited ................... 31
Schedule of Certain Revenue - Unaudited ..................................... 32
Schedule of Federal and State Financial Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 33
Other Reports:
Independent Auditors' Report on Compliance with Laws and Regulations .... . . . . . . .. 34
Single Audit Report on Compliance with General Requirements Applicable to
Federal Financial Assistance Programs .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 35
Single Audit Report on Compliance with Specific Requirements Applicable to
Nonmajor Federal Financial Assistance Programs ..........................,... 36
Single Audit Combined Report on the Internal Control Structure ................. 37-39
Management Letter . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40-41
4
Ei ..J.D. GILBERT & COMPANY
..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954) 419-1040
Independent Auditors' Report
We have audited the accompanying general purpose financial statements of the City of
Okeechobee, Florida (City) as of September 30, 1996, 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 Auditinf: 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 Note 5 to the general purpose financial statements, the City has not
maintained adequate detailed fixed asset records to support the cost of the fixed assets included in
the general fixed asset account group with respect to the stated cost of assets acquired prior to
October 1, 1981 and land disposed September 28, 1995. 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 for fixed assets acquired prior to October 31, 1981 and on the
disposition of the utility operations in 1995. It is not practicable to determine the effects on the
general purpose financial statements of this departure from generally accepted accounting principles.
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 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 ofOkeechobee, Florida as
of September 30, 1996 and the results of its operations for the year then ended in conformity with
generally accepted accounting principles.
.
American Institute of Certified Public Accountants . Member - Private Companies Practice Section
In accordance with "Government Auditing Standards", we have also issued a report dated
March 26, 1997 on our consideration of the City ofOkeechobee's internal control structure and a
report dated March 26, 1997 on its compliance with laws and regulations.
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 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.
}.f)~ I~
J.D. Gilbert & Company, CPAs
March 26, 1997
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1996
Fiduciary
Governmental Fund Types Fund Types Account Groups
Employee General General Total
Debt Pension Fixed Long-Term (Memorandum
General Service Trust Assets Debt Only)
ASSETS
~ $2,564,944 $42,953 $38,242 $2,646,139
Investments 2,500,000 4,203,298 6,703,298
Receivables:
Taxes 90,812 80 90,892
Accounts less Allowance of$5,861 15,615 15,615
Due from Other Government Agencies 121,531 121,531
Due from Other Funds 71,455 71,455
Inventory 7,554 7,554
Restricted Assets-Cash 5,076 5,076
Fixed Assets 2,182,001 2,182,001
Amount Available in Debt Service Fund 114,488 114,488
Amount to be Provided for Retirement
of General Long-Term Debt 1,430,656 1,430,656
TOTAL ASSETS $5,305,532 $114,488 $4,241,540 $2,182,001 $1,545,144 $13,388,705
LIABILITIES
Accounts Payable 147,239 17,274 $164,513
Accrued Liabilities 27,725 192,405 220,130
Accrued Interest 17,755 17,755
Matured Bonds and Interest Coupons 2,012 2,012
Due to Other Funds 71,455 71,455
Deferred Revenue 30,800 30,800
Long-Term Debt 1,352,739 1,352,739
TOTAL LIABILITIES $294,974 $2,012 $17,27':: $1,545,144 $1.859,404
FUND EQUITY
Investment in General Fixed Assets 2,182,001 2,182,001
Fund Balances:
Reserved for:
Employees' Retirement 4,224,266 4,224,266
Debt Service 112,476 112,476
Inventory 7,554 7,554
Encumbrances 44,630 44,630
Unreserved 4,958,374 4,958,374
TOTAL FUND EQUITY $5,010,558 $112,476 $4,224,266 $2,182,001 $11,529,301
TOTAL LIABILITIES AND FUND
EQUITY $5,305,532 $114,488 $4,241,540 $2,182,001 $1,545,144 $13,388,705
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei ..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 30,1996
TOTALS
DEBT (MEMORANDUM
GENERAL SERVICE ONLY)
Revenues
Taxes $1,300,568 $ 44,737 $1,345,305
Intergovernmental 1,241,4 78 1,241,478
Charges for Services 265,810 265,810
Licenses and Permits 79,645 79,645
Fines and Forfeitures 35,376 35,376
Interest Income 261,338 879 262,21 7
COB Grant 11,871 11,871
Miscellaneous 69.439 69.439
Total Revenue 3.265.525 45.616 3.311.141
Expenditures
Current:
Public Safety 1,511,741 1,511,741
General Government 552,892 552,892
Transportation 830,293 830,293
Physical Environment 192,982 192,982
Economic Environment 12,527 12,527
Health and Human Services 39,328 39,328
Debt Service:
Principal 123,296 35,000 158,296
Interest 74,398 2,362 76,760
Professional Fees 375 375
Total Expenditures 3.337.457 37.737 3.375.194
Excess of Revenue Over Expenditures
(Expenses Over Revenues) (71,932) 7,879 (64,053)
Fund Balances, beginning of year 5.082.490 104.597 5.187.087
Fund Balances, end of year $5.010.558 $112.476 $5. I 23.034
,
The Notes to Combined Financial Statements
are an Integral Part of this Statement
4
Ei ..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, 1996
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 $1,189,800 $1,300,568 $110,768 $37,900 $44,737 $6,837 $1,227,700 $1,345,305 $117,605
Intergovern-
mental 1,026,760 1,241,478 214,718 1,026,760 1,241,478 214,718
Charges for
services 312,700 265,810 (46,890) 312,700 265,810 (46,890)
Licenses and
penn its 36,500 79,645 43,145 36,500 79,645 43,145
Fines and
forfeitures 25,800 35,376 9,576 25,800 35,376 9,576
Interest Income 250,142 261,338 11,196 1,000 879 (121) 251,142 262,217 11,075
CDB grant 553,261 11,871 (541,390) 553,261 11,871 (541,390)
Miscellaneous 34,900 69,439 34,539 34,900 69,439 34,539
TOTAL REVENUE 3,429,863 3,265,525 (164,338) 38,900 45,616 6,716 3,468,763 3,311,141 (157,622)
EXPENDITURES
Public safety 1,483,620 1,507,583 (23,963) 1,483,620 1,507,583 (23,963)
General
government 587,230 552,892 34,338 587,230 552,892 34,338
Transporta-
tion 747,590 866,283 (118,693) 747,590 866,283 (118,693)
Physical
environment 180,000 192,982 (12,982) 180,000 192,982 (12,982)
Economic
environment 556,8 I 7 12,527 544,290 556,817 12,527 .544,290
Health and human '"
services 5,625 39,328 (33,703) 5,625 39,328 (33,703)
Debt service 199,366 197,694 1,672 38,363 37,737 501 237,729 235,431 2,173
~.
TOTAL
EXPENDITURES 3,760,248 3,369,289 390,959 38,363 37,737 501 3,798,61 I 3,407,026 391,460
EXCESS OF
REVENUE OVER
(UNDER)
EXPENDITURES ($330,385) ($103,764) $226,621 $537 $7,879 $7,217 ($329,848) ($95,885) $233,838
FUND BALANCES
Beginning ot
year 5,082,490 104,597 5,187,087
Adjustment to
confonn to
generally
accepted
accounting
principles:
Adjustment for
encumbrances 31,832 31,832
End of year $5,010,558 $112,476 $5,123,034
.
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES - FIDUCIARY FUND TYPE _
EMPLOYEE PENSION TRUST FUNDS
Year Ended September 30, 1996
Operating Revenues:
Contributions
Investment Income
Total Operating Revenues
Operating Expenses:
Professional Services
Benefit Payments
Contribution Refunds
Miscellaneous
Total Operating Expenses
Net Income
Fund Balance, beginning of year
Fund Balance, end of year
~
The Notes to Combined Financial Statements
are an Integral Part of this Statement
6
$ 250,508
318.479
568,987
58,270
32,710
23,235
1.212
115.427
453,560
3.770.706
$4.224.266
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
September 30,1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofOkeechobee (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 Municipal Police Officer's Pension Trust Fund and the Municipal
Firefighters' 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.
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.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. BASIS OF PRESENTATION - FUND ACCOUNTING AND ACCOUNT GROUPS
The accounts of the City are organized on the basis of fimds and account groups, each of
which is considered a separate accounting entity. The operations of each fimd are accounted
for with a separate set of self-balancing accounts that comprise its assets, liabilities, fimd
equity, revenues and expenditures/expenses. Government resources are allocated to and
accounted for in individual fimds based upon the purposes for which they are to be spent, and
the means by which spending activities are controlled. The various fimds are summarized
by type in the combined financial statements. The following fimd types and account groups
are used by the City:
Governmental Fund Types
Governmental fimds are those through which most governmental functions of the City are
fmanced. The acquisition, use and balances of the City's expendable financial resources and
related liabilities are accounted for through governmental fimds. The measurement focus is
upon determination of changes in financial resources, rather than upon net income
determination. The following are the City's governmental fimd types:
General Fund - The general fimd is the general operating fimd of the City. It is used
to account for all financial resources except those required to be accounted for in
another fimd.
Debt Service Fund - The debt service fimd 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.
Fiduciary Fund Type
Fiduciary fimds 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 fiduciary fimd type:
Employee Pension Trust Fund - Pension trust fimds are accounted for essentially the
same as the proprietary fund since a primary focus is on capital maintenance.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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 fmancial 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.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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".
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.
Pension Trust Funds
Pension trust funds are accounted for on the accrual basis of accounting. Therefore, revenues
are recognized when earned and expenses are recognized when incurred. 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 1 st. The operating budget includes proposed
expenditures and means of financing them.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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 fmal 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. ENCUMBRANCES
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 TIME DEPOSITS
Cash accounts for the City are maintained in interest-bearing accounts which may include
local government surplus funds trust fund 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.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
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.
I. 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.
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 1 0 years or
more of continuous service at a rate of 50% (25% prior to September 17, 1996) of the unused
sick leave balance.
The amount of vacation leave expected to be paid from current financial resources of the
general fund is 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$192,405 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.
NOTE 2 - COMPARISON 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 1994-95
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.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 2 - COMPARISON OF BUDGET TO ACTUAL RESULTS (Continued)
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
Encumbrances - September 30, 1996
Less prior year encumbrances paid
Adjustment for encumbrances
$3,337,457
$44,630
(12.798)
31.832
Expenditures on Budgetary Basis
$3.369.289
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,
1996 totaling $2,730,585 which are included in cash and investments in the accompanying combined
balance sheets in the amount of $2,719,319.
At September 30, 1996, the City has $2,431,896 invested in the Florida State Board of
Administration Local Government Surplus Funds Trust Fund investment pool. These funds are
recorded at cost which approximates market value, and are included in cash in the accompanying
balance sheet.
The investments of the fiduciary fund type are managed by Invesco Mim, Inc. Cash equivalent
investments, consisting of money market accounts, are stated at cost which approximates market
value.
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.
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Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 3 - CASH AND INVESTMENTS (Continued)
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 counterparty's trust department or agent, but not in the City's name.
The following is a list of the City's investments by categories of risks established by Governmental
Accounting Standards Board Statement No.3:
Category 3:
Pension trust funds:
Municipal police officers' pension trust fund:
Cash equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
Book
Value
Market
Value
$ 10,377
626,980
134,168
969,162
12.203
1.752.890
$ 10,377
638,218
133,063
1,370,763
12.203
2.164.624
Municipal firefighters' pension trust fund:
Cash equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
35,887
197,812
10,869
348,090
4.010
596.668
35,887
202,664
10,105
480,230
4.010
732.896
14
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 3 - CASH AND INVESTMENTS (Continued)
Municipal general employees' pension trust fund:
Cash Equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
Book
Value
Market
Value
21,023
633,831
169,866
1,014,086
14.934
1.853.740
21,023
645,023
167,364
1,354,306
14.934
2.202.650
Total Investments
$4.203.298
$5.100.170
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 1995-96 levy was based was
$149,096,004. 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. Tax collections for the year ended September 30,
1996 were 94% 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 1995-96 fiscal year was 3.94 mills.
NOTE 5 - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
Balance Balance
October I. 1995 Additions Retirements September 30. 1996
Land and improvements $ 805,358 $ $ $ 805,358
Buildings and improvements 402,703 9,450 412,153
Furnishings and equipment 557,545 86,661 11,811 632,395
Rolling stock 332.095 332.095
Totals $2.097.701 $96.111 $11.811 $2.182.001
15
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 5 - CHANGES IN GENERAL FIXED ASSETS
The City has not maintained adequate detailed fIxed asset records to support the cost of general fIxed
assets acquired prior to October 1, 1981. Additionally, the water towers and old sewer plants that
were sold to the Okeechobee Utility Authority on September 28, 1995 were located on land
previously owned by the City and included in land and improvements above. The cost of the land
sold was not removed from the general fixed asset group. At September 30, 1996, the value assigned
to general fIxed assets acquired prior to October 1, 1981 was $845,579.
NOTE 6 - LONG-TERM DEBT
Long-term debt as of September 30, 1996 is summarized as follows:
Notes Payable:
5.25% gas tax revenue note to a bank, payment of $99,682,
including interest, due semi-annually through December 30,
2004; collateralized by and payable from a pledge of the City's
share of the local option gas tax, municipal tax on motor fuels
and motor fuel rebate
$1.352.739
A summary of changes in all long-term debt for the year ended September 30, 1996 is as follows:
Balance at September 30, 1995
Payments
GENERAL LONG-TERM DEBT
General
Obligation
Bonds
$35,000
35.000
Notes
Payable
$1,476,036
123.297
Total
$1,511,036
158.297
Balance at September 30, 1996
$
$1.352.739
$1.352.739
16
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 6 - LONG-TERM DEBT (Continued)
At September 30, 1996, the annual principal requirements and the annual requirements to amortize
all debt outstanding, (including interest payments aggregating $341,863) for the next five years and
thereafter are as follows:
Principal
Year Ending September 30. Principal and Interest
1997 $ 130,021 $ 199,365
1998 136,937 199,365
1999 144,221 199,365
.-/' 2000 151,767 199,365
2001 159,963 199,365
Thereafter 629.830 697.777
Totals $1.352.739 $1.694.602
The Water and Sewer Refunding and Improvement Revenue Bonds, Series 1987, the Water and
Sewer Improvement Revenue Bonds, Series 1989, and the Water and Sewer Improvement Revenue
Bonds, Series 1992A were defeased on September 28, 1995 upon the transfer of the water and sewer
system to the Okeechobee Utility Authority. Monies were deposited in an irrevocable trust to
provide for all future debt service payments on these bonds. Accordingly, trust assets and liabilities
for the defeased bonds are not included in the City's financial statements.
NOTE 7 - INTERFUND RECEIVABLES AND PAY ABLES
The following is a summary of amounts due from and due to other funds:
General fund
Debt service fund
Due to
Other Funds
$71,455
Total all Funds
$71.455
$71.455
17
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 8 - PENSION PLANS
The City has three pension plans covering substantially all the City's regular employees. The
Municipal Police Officers' and Municipal Fire Fighters' plans are under a single employer public
employee retirement system. The General Employees' plan is under a cost sharing multiple
employer public employee retirement system and also covers substantially all of the employees of
the Okeechobee Utility Authority. The plans were established by the City in accordance with the
City charter and state statutes. Total pension contribution by the City for the year was $14,273 (the
Utility Authority contributed $19,891) based on a covered payroll and a total payroll as follows:
Police
Fire
General - City
General - Utility Authority
Covered
Payroll
$537,200
240,042
481,503
685,400
Total
Payroll
$537,200
285,432
548,850
838,719
Covered
Payroll as
Percent of
Total Payroll
100.0%
84.1%
87.7%
81. 7%
The City and the Utility Authority fund the General pension plan at the rate of 2.9% of covered
payroll for participants (up from 1 % the previous year). The City funds the Police and Fire pension
plans for any contribution deficit determined by actuarial valuation for the Police and Fire plans
beyond the contributions by employees and the State Insurance premium tax contribution, as
determined by actuarial valuation.
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 60 (age 65 for general) and 10 years of service (5 years for general), or at 30 years
of service (25 for police) regardless of age. The benefit is calculated at 3.0% for police, 2.7% for
fire, and 1.75% (2% effective September 28, 1995) for general of average monthly earnings times
years of continuous service with the City. Benefits are payable by montWy annuity for 10 years
certain and life thereafter with other options available.
Also, the Police Officers' benefits are based on total compensation, normal retirement is available
at 25 years of service, regardless of age, and the disability benefits are 42% and 25% of average final
compensation for service and nonservice connected disabilities, respectively.
18
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1996
NOTE 8 - PENSION PLANS (Continued)
Early retirement is provided for at age 55 (age 60 for general) and 10 years of participation. Death
and disability benefits are also available through the plans. Upon termination of employment with
less than 10 years of service (5 years for general) the plan refunds accumulated employee
contributions. After 10 years of service (5 years for general) the pension benefit is accrued to date
of termination and payable at normal retirement age if employee contributions are left in the fund.
The significant actuarial assumptions 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, 1996, which consisted entirely
of normal cost, was as follows:
Police
Fire
General
$35,153
12,699
27,519
The employer and employee contributions by fund for the year ended September 30, 1996 were as
follows:
City
Utility Authority
Totals
Employer
$14,273
19.891
$34,1 ~
Employee
$ 67,146
41.131
$108.277
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 totaled $31,242 and $76,825, respectively, during the year ended September 30, 1996.
These amounts have been included in intergovernmental revenues and current expenditures in the
governmental fund type.
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 Public Employee Retirement System. 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.
19
Ei ..J.o. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 8 - PENSION PLANS (Continued)
The standardized measure of the pension benefit obligation and the net assets available for benefits
at September 30, 1996 (the most recent valuation date) is as follows:
Police Fire General
Value No. Value No. Value No.
Pension benefit obligation:
Retirees and beneficiaries currently
receiving benefits and terminated
employees entitled to benefits but
not yet receiving them $ - $ 10,047 1 $ 328,299 5
-
Current employees:
Accumulated employee contributions
including allocated investment
Income 293,355 77,627 507,343
Employer-financed vested 1,023,787 10 128,158 2 656,936 28
Employer-financed nonvested 133.884 ..8. 65.284 ..8. 57.094 30
Total pension benefit obligation 1,451,026 18 281,116 10 1,549,672 58
Net assets available for benefits (at cost
which approximates market-see market
value information at Note 3) 1.754.116 598.589 1.871.561
Assets in excess of pension
benefit obligation $ 303.090 1J 17.473 $ 321.889
The Municipal General Employees' Pension Trust Fund was amended to include the Okeechobee
Utility Authority employees effective September 28, 1995. There were no changes in actuarial
assumptions and methods since the previous actuarial valuation.
Principal actuarial assumptions used in the most recent actuarial valuation are summarized as
follows:
Mortality - The 1983 Group Annuity Mortality Table.
Imerest - 8% per year compounded annually, after paying investment management fees.
20
Ei ..J.o. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 8 - PENSION PLANS (Continued)
Retirement age - 60 for police officers and firefighters, 65 for all other employees, or
immediately if over assumed retirement age.
Salary increases - 6% for police and general; 7% for firefighters, 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 9 - GRANTS AND CONTRACTS
Hospice
During the year ended September 30, 1996, the City was awarded a Community Services Block
Grant (96SB-5H-07-57-02-064) totaling $5,864 for local community health and human services
assistance. Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee. The City
received $6,569 under this and a previous grant during the year ended September 30, 1996 and, upon
presentation of invoices by Hospice, disbursed the funds.
Land Development Regulation
The City entered into a highway maintenance agreement (contract #B-9499) with the State of Florida
Department of Transportation which was renewed in 1996 for an annual amount of $16,131. In
1996, $16,131 was recorded as reimbursement for expenditures incurred by the City relating to the
project under this contract.
Community Development Block Grant
In September 1994, the City was awarded a $575,000 Community Development Block Grant
(CDBG) (contract number 95DB-65-07-57-02-C37) for rehabilitation of commercial buildings in
the City.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The City has COnIracts for engineering and maintenance projects at September 30, 1996 in the normal
course of business.
21
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Continued)
The City has purchased commercial insurance to cover significant losses. For insured programs,
there have been no significant reductions in benefits. Settlement amounts have not exceeded
coverage for the current year or the three prior years.
In 1996, the City executed a three year lease for police and other City vehicles. Payments under the
lease are due in quarterly installments of$14,250, with a final payment of$221,231 due in 1999.
The lease provides for termination at any quarterly payment date. The City intends to dispose of the
vehicles and terminate the lease in 1997. Rent expense under this and a previous lease was $55,944
in 1996.
NOTE 11 - DISPOSITION OF UTILITY
In November 1994, the City entered into an interlocal agreement with Okeechobee County, Florida
(the County) creating the Okeechobee Utility Authority (OUA). The OUA was established for the
purpose of acquiring, owning, operating and maintaining a regional water and wastewater system
for Okeechobee County and areas in the service area of the Okeechobee Beach Water Association.
On September 28, 1995, the City transferred its water and sewer utility plant and related equipment,
accounts receivable, customer deposits and prepayments, and monies on deposit in the bond sinking
and reserve funds to the OUA in exchange for $3,000,000. The City also transferred certain real
property that was not recorded in the fixed assets of the proprietary fund. Certain other real property
relating to the water and sewer utility operations was not transferred, but perpetual easements were
granted to the OUA. The City has not maintained adequate detailed fixed asset records to support
the cost of assets disposed from the general fixed asset group; therefore, any effect on the fixed asset
account group of this transfer cannot be determined.
In accordance with the terms of an Interlocal Agreement between the City and OVA, the OUA
utilized office space and police dispatch services of the City for one year for an aggregate annual
fee of $35,000. These services can be discontinued upon proper notice. The OUA also utilized
financial services and the maintenance barn for three months of the year ended September 30, 1996,
for a fee of$16,875.
22
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30, 1996
Variance
Favorable
Budget Actual (Unfavorable)
TAXES
Ad valorem taxes $ 575,800 $ 577,201 $ 1,401
Franchise fees 270,000 304,600 34,600
Utility service taxes 343,000 416,880 73,880
Public service taxes 1.000 1.887 887
1.189.800 1.300.568 110.768
INTERGOVERNMENTAL
State shared revenue:
Cigarette tax - two cent 81,000 78,159 (2,841 )
Revenue sharing 173,000 176,017 3,017
One-half cent sales tax 190,000 207,195 17,195
One-cent sales surtax 300,000 305,716 5,716
Mobile home licenses 2,500 4,417 1,917
Alcoholic beverage licenses 1,000 2,086 1,086
Gasoline tax refund 4,403 4,403
Local option gasoline tax 274,360 344,569 70,209
Local alternate fuel user fee 300 234 (66)
Fire insurance premium tax 108,067 108,067
Fire fighters supplement 600 600
1.022.760 1.23 1.463 208.703
Shared revenue from other local units:
County occupational licenses 4.000 10.015 6.015
1.026.760 1.241.478 214.718
CHARGES FOR SERVICES
Okeechobee Utility Authority 100,000 51,875 (48,125)
Sanitation fees 197,100 197,648 548
Highway maintenance contract 15,200 16,13 1 931
Miscellaneous 400 156 (244)
312.700 265.810 (46.890)
23
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
(CONTINUED)
Year Ended September 30, 1996
Variance
Favorable
Budget Actual (Unfavorable)
LICENSES AND PERMITS
Occupational licenses and regulatory fees 36,500 54,603 18,103
Building permits 25.042 25.042
36.500 79.645 43.145
FINES AND FORFEITURES
Court fines 23,000 31,206 8,206
Police education 300 499 199
Code enforcement fines 500 657 157
Investigation cost reimbursement 2.000 3.014 1.014
25.800 35.376 9.576
INTEREST INCOME 250.142 261.338 11.196
CDB GRANT 553.261 11.871 (541.390)
MISCELLANEOUS
Hospice Grant 5,600 6,569 969
Miscellaneous Improvements 13,000 10,280 (2,720)
Sale of assets 5,000 45,938 40,938
Rents and royalties 400 50 (350)
Refunds of prior year expenditures 500 388 (112)
Miscellaneous and other 10.400 6.214 (4.186)
34.900 69.439 34.539
Total Revenue $3.429.863 $3.265.525 .$(164.338)
24
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1996
ENCUMBRANCES ACTUAL ON VARIANCE
BUDGETARY FAVORABLE
BUDGET ACTUAL 1995 1996 BASIS (UNFAVORABLE)
PUBLIC SAFETY
Law enforcement:
Personal services $812,940 $885,667 $885,667 ($72,727)
Operating expenses 161.680 162,322 5,314 157,008 4,672
Capital outlay 1,800 8,027 8,027 (6,227)
976,4. 1,056,016 5,314 1,050,702 (74,282)
Fire control:
Personal services 343,200 391,092 391,092 (47,892)
Operating expenses 164,000 55,133 1,156 56.289 107,711
. Capital outlay 9,500 9,500 (9,500)
507,200 455,725 1, 156 456,881 50,319
Total Public Safety 1,483,620 1,511,741 5,314 1,156 1,507,583 (23,963)
GENERAL GOVERNMENT
Legislative: .,.
Personal services 42,070 43,443 .. - 43,443 (1 ,373)
Operating expenses 12,000 10,364 10,364 1,636
54,070 53,807 53,807 263
Executive - city administrator:
Personal services 80,150 80,678 80,678 (528)
Operating expenses 16,500 14,~ 14,040 2,460
Capital outlay 3,000 2,9 4 2,984 16
99,650 97,702 97,702 1,948
Executive - city clerk:
Personal services 63,380 65,517 65,517 (2,137)
Operating expenses 13,250 11,444 11 ,444 1.806
Capital outlay 6,000 6,093 6,093 (93)
82,630 83,054 83,054 (424)
Financial and administrative:
Personal services 70,540 71,677 71,677 (1,137)
Operating expenses 53,850 57,842 57,842 (3,992)
Capital outlay 3,000 2,984 2,984 16
127,390 132,503 132,503 (5,113)
General services:
Personal services 91,640 52,710 52,710 38,930
Operating expenses 108,850 91,213 91,213 17,637
Capital outlay 3,000 6,443 6,443 (3,443)
203,490 150,366 150,366 53,124
Judicial:
Operating expenses 20,000 35,460 35,460 (15.460)
Total General Government 587,230 552.892 552,892 34.338
TRANSPORTATION
Road and street facilities:
Personal services 249,080 247,729 247,729 1,351
Operating expenses 207,950 167,958 167,958 39,992
Capital outlay 290,560 414,606 7,484 43,474 450,596 (160,036)
Total Transportation 747,590 830.293 7,484 43,474 866,283 (118,693)
PHYSICAL ENVIRONMENT
Garbage/solid waste control services:
Operating expenses 180.000 192,982 192.982 (12,982)
ECONOMIC ENVIRONMENT
COB Grant 556.817 12.527 12.527 544.290
HEALTH AND HUMAN SERVICES
Operating expenses 5,625 39,328 39,328 (33.703)
DEBT SERVICE
Principal 123,262 123,296 123,296 (34)
Interest 76.104 74,398 74,398 1,706
Total Debt Service 199,366 197,694 197,694 1,672
TOTAL EXPENDITURES $3.760,248 $3.337,457 $12,798 $44.630 $3.369,289 $390,959
25 Ei ..J. O. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
DEBT SERVICE FUND
STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1996
Variance
Favorable
Budget Actual (Unfavorable )
REVENUE
Ad valorem taxes $37,900 $44,737 $6,837
Interest income 1.000 879 (121)
Total Revenue 38.900 45.616 6.716
EXPENDITURES
Bond principal retirements 35,000 35,000
Bond interest expense 2,363 2,362 1
Professional fees 1.000 375 625
Total Expenditures 38.363 37.737 626
Excess of Revenues over Expenditures $ 537 $ 7 .879 $7.342
.,.
26
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING BALANCE SHEETS
September 30,1996
Municipal
Police
Officers'
Pension
Trust Fund
ASSETS
Cash
Investments
$ 8,557
1.752.890
Total Assets
$1.761.447
LIABILITIES
Accounts payable
$
7,331
FUND BALANCES
Reserved for employees'
retirement
1.754.116
Total Liabilities and Fund
Balances
$1.761.447
Municipal
Fire-
Fighters'
Pension
Trust Fund
$ 4,403
596.668
$601.071
$ 2,482
598.589
$601.071
27
General
Employees'
Pension
Trust Fund
$ 25,282
1.853.740
$1.879.022
Total
$ 38,242
4.203.298
$4.241.540
$ 7,461 $ 17,274
1.871.561 4.224.266
$1.879.022 $4.241.540
Ei ..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, 1996
Municipal Municipal
Police Fire- General
Officers' Fighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund Total
OPERATING REVENUE
State tax on insurance premiums $ 76,825 $ 31,242 $ $ 108,067
Employer's contributions 642 33,522 34,164
Employees' contributions 27,039 11,817 69,421 108,277
Investment income 82,431 28,480 92,834 203,745
Gain on sale of securities 35.416 13.425 65.893 114.734
Total Operating Revenue 221.711 85.606 261.670 568.987
OPERATING EXPENSES
Employees' contribution refunds
and interest 7,115 16,120 23,235
Retirement benefits 1,870 30,840 32,710
Professional services 23,828 10,930 23,512 58,270
Miscellaneous 714 485 13 1.212
Total Operating Expenses 26.412 18.530 70.485 115.427
Net Income 195,299 67,076 191,185 453,560
FUND BALANCES
Beginning of year 1.558.817 531.513 1.680.376 3.770.706
End of year $1.754.116 $598.589 $1.871.561 $4.224.266
28
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE
EMPLOYEE PENSION TRUST FUNDS
HISTORICAL INFORMATION
September 30,1996,1995 and 1994
(Unaudited)
For the years ended September 30, 1996, 1995 and 1994, 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:
Net assets available for benefits as a percentage of
pension benefit obligation
Assets in excess of pension benefit obligation as a
percentage of covered payroll
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee
Net assets available for benefits as a percentage of
pension benefit obligation
Assets in excess of pension benefit obligation as a
percentage of covered payroll
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee
Net assets available for benefits as a percentage of
pension benefit obligation
Assets in excess of pension benefit obligation as a
percentage of covered payroll
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee
Police
1996
Fire
General
121%
213%
121%
56%
132%
28%
5%
<1%
5%
2.9%
6.0%
~
1995
Fire
General
125%
219%
120%
59%
132%
26%
5%
<1%
tl.
1%
tl.
~
1994
fu
General
126%
217%
136%
63%
118%
43%
5%
<1%
5%
1%
5%
Historical information from 1987 through 1996 is presented in a separately issued report for the pension
employees retirement system (PERS).
29
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
Year Ended September 30,1996
DESCRIPTION
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance - $250 deductible)
Scheduled Property Floater ($250 deductible)
Public Employees Faithful Performance Blanket ($250 deductible)
General Liability Limit
Aggregate Liability Limit
LAW ENFORCEMENT OFFICERS' LIABILITY
Bodily injury, personal injury, property damage ($2,500 deductible)
WORKERS COMPENSATION AND EMPLOYER'S LIABILITY
.
VEHICULAR EQUIPMENT
Bodily injury and property damage
Collision ($250 deductible)
Comprehensive ($250 deductible)
PUBLIC OFFICIAL LIABILITY ($2,500 Deductible)
THIRD PARTY POLLUTION LIABILITY COVERAGE ($500 deductible)
COVERAGE
$1,586,300
$256,590
$20,000
$2,000,000
$6,000,000
$2,000,000
$1,000,000
$2,000,000
$2,000,000
$1,000,000
30
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
1987 - 1996
.
ASSESSED V ALVES
FISCAL REAL PERSONAL HOMESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1996 $121,623,003 $27,473,001 $149,096,004 $26,195,730
1995 112,605,782 27,593,835 140,199,617 26,108,828
1994 112,759,343 23,222,652 135,981,995 25,365,390
1993 109,479,471 23,748,480 133,227,951 25,288,396
1992 112,820,753 22,702,940 135,523,693 24,745,181
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
TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
DEBT GENERAL
"
FISCAL DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
1996 $46,604 $602,080 .260 3.940
1995 23,470 675,914 .170 4.940
1994 48,006 664,734 .300 4.940
1993 61,821 552,896 .390 4.150
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
31
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUE - UNAUDITED
1987 - 1996
GENERAL FUND
State
Revenue
Sharing Occupational Utility Fines and Franchise
Year (Note) Licenses Taxes Forfeitures Fee Interest
1996 $461,371 $52,714 $416,880 $35,376 $304,600 $261,338
1995 449,994 40,366 398,522 33,691 285,257 82,613
1994 442,009 40,517 388,291 22,456 281,300 44,998
1993 446,009 36,973 370,882 28,654 278,668 24,438
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
NOTE - INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND HALF-CENT SALES TAX
32
Ei ..J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE
Year Ended September 30, 1996
Cash Cash
October 1, September 30,
Federal or State 1995 1996
Grantor/ Federal A ward Beginning Ending
Proe:ram Title CFDA No. Amount Balance Receiots Disbursements Balance
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
Passed through State Department
of Community Affairs
#95DB-65-07-57 -02-C3 7 14.219 $575,000 $3,233 $11,871 $12,528 $2,576
U.S. DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Passed through State Department
of Community Affairs
#95 SB-4M-07 -57-02-063 13.792 $7,038 $ $2,345 $2,345 $
#96SB-5H-07 -57 -02-064 13.792 $5,864 $ $4,224 $4,224 $
33
Ei ..J.D. GILBERT & COMPANY
~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954) 419-1040
Independent Auditors' Report on Compliance
with Laws and Re2Ulations
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
.
We have audited the general purpose financial statements of the City of Okeechobee, Florida
(City) as of and for the year ended September 30, 1996 and have issued our report thereon dated
March 26, 1997. We did not audit the financial statements of the Employee Benefit Trust, which
are included in the general purpose 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. Accordingly,
we do not express such an opinion.
The results of our tests disclosed no instances of non compliance that are requried to be
reported herein under "Government Auditing Standards".
This report is intended for the information of the Mayor and City Council, management, and
the Department of Community Affairs 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.
rIY ~t<('~7
March 26, 1997
J.D. Gilbert & Company, CPAs
34
American Institute of Certified Public Accountants . Member - Private Companies Practice Section
..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd" Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954J 419-1040
Sin&le Audit Report on Compliance with the General
Requirements Applicable to Federal Financial Assistance Proa:rams
To the Honorable Mayor
and City Council
City of Okeechobee, Florida
,
We have audited the general purpose financial statements of the City ofOkeechobee, Florida,
as of and for the year ended September 30, 1996, and have issued our report thereon dated March
26, 1997.
We have applied procedures to test the City ofOkeechobee, Florida's compliance with the
following requirements applicable to its federal financial assistance programs, which are identified
in the Schedule of Federal Financial Assistance, for the year ended September 30, 1996: political
activity, civil rights, cash management, federal financial reports, allowable costs/cost principles, and
administrative requirements.
Our procedures were limited to the applicable procedures described in the Office of
Management and Budget's Compliance Supplement for Single Audits of State and Local
Governments. Our procedures were substantially less in scope than an audit, the objective of which
is the expression of an opinion on the City of Okeechobee, Florida's compliance with the
requirements listed in the preceding paragraph. 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 second paragraph of this report. With
respect to items not tested, nothing came to our attention that caused us to believe that the City of
Okeechobee, Florida, had not complied, in all material respects, with those requirements.
This report is intended for the information of the audit committee, management, and the
Department of Community Affairs and the Auditor General of the State of Florida. However, this
report is a matter of public record and its distribution is not limited.
~~~(J~
J.D. Gilbert & Company, CPAs
March 26, 1997
35
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510. Deerfield Beach, Florida 33441 . (954) 419-1000. Fax (954) 419-1040
Single Audit Report on Compliance with Specific Requirements
Applicable to Nonmajor Federal Financial Assistance Programs
To the City Council
City of Okeechobee, Florida
We have audited the general purpose fmancial statements of the City ofOkeechobee, Florida,
as of and for the year ended September 30, 1996, and have issued our report thereon dated March
26, 1997
In connection with our audit of the general purpose financial statements of the City of
Okeechobee, Florida, and with our consideration of the City of Okeechobee, Florida's control
structure used to administer federal financial assistance programs, as required by Office of
Management and Budget (OMB) 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, 1996. 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; eligibility; and special tests and provisions (if any) 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 on the City of Okeechobee, Florida'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 of
Okeechobee, Florida, had not complied, in all material respects, with those requirements.
This report is intended for the information of the audit committee, management, and the
Department of Community Affairs and the Auditor General of the State of Florida. However, this
report is a matter of public record and its distribution is not limited.
Cf.;Y. /li6d-rr~
J.D. Gilbert & Company, CPAs
March 26, 1997
36
American Institute of Certified Public Accountants . Member - Private Companies Practice Section
~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510. Deerfield Beach. Florida 33441 . (954) 419-1000' Fax (954) 419-1040
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 general purpose financial statements of the City of Okeechobee, Florida
(City), as of and for the year ended September 30, 1996, and have issued our report thereon dated
March 26, 1997. 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 audit 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 general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended September 30, 1996, 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 general purpose financial statements and to report on the
internal control structure in accordance with OMB Circular A-128. This report also addresses our
consideration of internal control structure policies and procedures relevant to compliance with
requirements applicable to federal financial assistance programs.
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 accounting principles, and that federal fmancial 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.
37
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
F or 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
F or 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 in order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and not to provide an opinion on the internal
control structure. Accordingly, we do not express such an opinion..
During the year ended September 30, 1996, the City had no major federal fmancial assistance
programs and expended its federal financial assistance under the nonmajor federal financial
assistance programs listed in the schedule of federal financial assistance.
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 programs. Our procedures were
less in scope than would 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 a reportable condition 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.
38
Ei ..J.D. GILBERT & COMPANY
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 matter involving the internal control Structure and
its operation that we consider to be a material weakness as defined above. These conditions were
considered in determining the nature, timing, and extent of procedures to be performed in our audit
of the general purpose financial statements of the City, and of its compliance with requirements
applicable to its federal financial assistance programs for the year ended September 30, 1996 and this
report does not affect our report thereon dated March 26, 1997.
Fixed Asset Records and Controls
The City has not maintained adequate detailed fixed asset records in support of the
recorded costs of the assets 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. We also could not obtain sufficient supporting documentation to form an
opinion as to the cost of assets removed upon disposition of the water and sewer
utility or the value of any assets transferred to the general fund on September 28,
1995.
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 March 26, 1997.
~
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.
~JY. ~ t7 ~d~~
J.D. Gilbert & Company, CPA;"r-?
March 26, 1997
<.
39
Ei ..J.D. GILBERT & COMPANY
.J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954) 419-1040
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 ofOkeechobee, Florida (City)
for the year ended September 30, 1996, and have issued our report thereon dated March 26, 1997.
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.
Prior Year Irrefularities
There were no irregularities reported in the preceding financial audit to correct.
Status of Prior Year Recommendations
c
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.
The City has addressed those items included in "recommendations for improvement" of the
prior year's management letter.
Consideration of Financial Emerfencv
The City is not, nor at any time during the year ended September 30, 1996 was, in a state of financial
emergency as a consequence of conditions described in Chapter 218.503, Florida Statutes.
Florida Department of Banking and Finance Annual Financial Report
The annual financial report to be filed with the Florida Department of Banking and Finance pursuant
to Section 218.32(1)(b) Florida Statutes is in agreement with the audited financial statements and
is expected to be filed on a timely basis.
~
Recommendations for Improvement
Accounts Receivable - Garbage - We noted that the finance department does not receive an
aged accounts receivable trial balance each month from the Okeechobee Utility Authority
(OUA) for the City's garbage billings. While the OUA prepares the billings for the City, it
is the City that is ultimately responsible for the accuracy of the billings and collection
procedures. To maintain proper accountability, the City should obtain an aged accounts
receivable listing and report of transactions from the OVA on a monthly basis.
40
.
American Institute of Certified Public Accountants . Member - Private Companies Practice Section
Accounts Payable - Public Works - In performing our audit procedures, we noted that
contractor billings for sidewalk and storm sewer construction services through September
30, 1996 were included in encumbrances instead of properly recorded as accounts payable.
The finance department should be aware of the criteria for classifying an expenditure as a
reportable payable or as an encumbrance.
Revenue - The state tax on fire insurance premiums that is contributed to the pension plans
of the police and firefighters, is now required to be recorded in the revenue and expenses of
the City. These are considered "on-behalf' payments which are reportable under the
provisions of Governmental Accounting Standards Board Statement on Standards number
24. The City should consider this statement in preparing its annual budget.
Violations of Laws. Rules and Refulations
We did not become aware of any violations of laws, rules, and regulations during the course of our
audit.
· Illefal or Improoer Expenditures
We did not become aware of any illegal or improper expenditures during the course of our
examination.
***
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.
Cfjfl ~,f~~
J.D. Gilbert & Company, CPAs
March 26, 1997
41
Ei ..J.D. GILBERT & COMPANY