Audit Report 09.30.1997
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GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1997
Ei ..J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
September 30,1997
CITY COUNCIL
James E. Kirk
Mayor, Chairman
Noel A. Chandler
Councilmember
Dowling R. Watford, Jr.
Councilmember
Lowry Markham
Councilmember
Robert Oliver
Councilmember
ADMINISTRATION
Robert J. Bradshaw
City Administrator
General Services Director
Louis Keith Tomey II
Chief of Fire
Bonnie S. Thomas, CMC
City Clerk
Rehmund Farrenkopf
Chief of Police
Lola Parker
Finance Coordiantor
Charles Elders
Director of Public Works
John Cook
City Attorney
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CITY OF OKEECHOBEE, FLORIDA
September 30,1997
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
Statement of Revenue, Expenditures and Changes in Fund Balances -
Budget and Actual- Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
Statement of Changes in Plan Net Assets - 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
Employee Pension Trust Funds -
Combining Statements of Plan Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 26
Combining Statements of Changes in Plan Net Assets ......................... 27
Required Supplementary Information ...................................... 28
Schedule of Expenditures of Federal and State Financial Awards. . . . . . . . . . . . . . . . . .. 29
Unaudited Information:
Summary of Insurance Coverage - Unaudited .................................. 30
Schedule of Assessed Values, Tax Levies and Rates - Unaudited. . . . . . . . . . . . . . . . . .. 31
Schedule of Certain Revenue - Unaudited ..................................... 32
Other Reports:
Report on Compliance and on Internal Control over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards .......................................... 33-34
Report on Compliance with Requirements Applicable to Each Major Program
and Internal Control over Compliance in Accordance with OMB Circular A-133 .... 35-36
Schedule of Findings and Questioned Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37-38
Management Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39-40
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
1560-3 Capital Circle N. W.. Tallahassee. Florida 32303 Toll Free (BBB) 419-2727
Independent Auditors' Report
We have audited the accompanying general purpose financial statements of the City of
Okeechobee, Florida (City) as of September 30, 1997, 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 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 ofthe City of Okeechobee, Florida as
of September 30, 1997 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
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In accordance with Government Auditing Standards, we have also issued our report dated
March 25, 1998 on our consideration of the City ofOkeechobee's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and
grants.
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, including
the schedule of expenditures of federal awards as required by the u.s. Office of Management and
Budget Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations", 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.
9.t.D.~/~
J.D. Gilbert & Company, CPAs
March 25, 1998
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CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
September 30,1997
Governmental Fiduciary
Fund Types Fund Types Account Groups
Employee General General Total
Pension Fixed Long-Term (Memorandum
General Trust Assets Debt Only)
ASSETS
Cash $2,352,417 $33,384 $2,385,80 I
Investments 2,500,000 6,794,098 9,294,098
Receivables:
Taxes 114,395 114,395
Accounts less Allowance of$5,861 14,262 14,262
Due from Other Government Agencies 214,240 9,935 224,175
Due from Other Funds 10,590 ]0,590
Inventory 7,923 7,923
Restricted Assets-Cash 40,710 40,710
Fixed Assets 2,559,698 2,559,698
Amount Available in Debt Service Reserv 34,483 34,483
Amount to be Provided for Retirement
of General Long-Term Debt 1,607,570 1,607,570
TOTAL ASSETS $5,243,947 $6,848,007 $2,559,698 $1,642,053 $16,293,705
LIABILITIES
Accounts Payable 98,131 26,193 $124,324
Accrued Liabilities 24,383 169,335 193,718
Accrued Interest 35,069 35,069
Matured Bonds and Interest Coupons 2,012 2,012
Due to Other Funds 10,590 10,590
Deferred Revenue 17,700 17,700
Long-Term Debt 1,472,718 1,472,718
TOTAL LIABILITIES $187,885 $26,193 $1,642,053 $1,856,131
FUND EQUITY
Investment in General Fixed Assets 2,559,698 2,559,698
Net Assets Held in Trust 6,821,814 6,821,814
Fund Balances:
Reserved for:
Debt Service 34,483 34,483
Emergency and Disaster Relief 460,552 460,552
Inventory 7,923 7,923
Encumbrances 206,951 206,951
Unreserved 4,346,153 4,346,153
TOTAL FUND EQUITY $5,056,062 $6,821,814 $2,559,698 $14,437,574
TOTAL LIABILITIES AND FUND
EQUITY $5,243,947 $6,848,007 $2,559,698 $1,642,053 $16,293,705
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The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
Year Ended September 30,1997
TOTALS
DEBT (MEMORANDUM
GENERAL SERVICE ONLY)
Revenue
Taxes $1,311,984 $ $1,311,984
Intergovernmental 1,343,028 1,343,028
Charges for Services 266,606 266,606
Licenses and Permits 88,284 88,284
Fines and Forfeitures 38,782 38,782
Interest Income 267,825 267,825
CDB Grant 40,322 40,322
Miscellaneous 36.523 36.523
Total Revenue 3.393.354 3.393.354
Expenditures
Current:
Public Safety 1,955,847 1,955,847
General Government 561,545 561,545
Transportation 712,452 712,452
Physical Environment 191,996 191,996
Economic Environment 39,476 39,476
Health and Human Services 43,017 43,017
Debt Service:
Principal 130,021 130,021
Interest 75.972 75.972
Total Expenditures 3.710.326 3.710.326
Other Financing Sources
Proceeds of Long Term Debt 250.000 250.000
Excess of Expenditures Over Revenue
and Other Sources (66,972) (66,972)
Fund Balances, beginning of year 5,010,558 112,476 5,123,034
Interfund Transfer 112.476 012.476)
Fund Balances, end of year $5.056.062 $ $5.056.062
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GOVERNMENTAL FUND TYPES
Year Ended September 30, 1997
General Fund
Actual (on Variance
Budgetary Favorable
Budget Basis) (Unfavorable)
REVENUE
Taxes $1,243,700 $1,311,984 $68,284
Taxes Intergovernmental 1,161,650 1,343,028 181,378
Charges for services 247,700 266,606 18,906
Licenses and permits 63,500 88,284 24,784
Fines and forfeitures 25,800 38,782 12,982
Interest Income 230,850 267,825 36,975
CDB grant 536,802 40,322 (496,480)
Miscellaneous 47,010 36,523 (10,487)
TOTAL REVENUE 3,557,012 3,393,354 (163,658)
EXPENDITURES
Public safety 2,072,429 1,954,920 117,509
General government 572,907 561,883 11,024
Transporation 1,468,670 875,362 593,308
Physical environment 190,000 191,996 (1,996)
Economic environment 536,813 39,476 497,337
Health and human services 39,385 43,017 (3,632)
Debt service 199,366 197,702 1,664
TOTAL EXPENDITURES 5,079,570 3,864,356 I ,215,214
OTHER FINANCING SOURCES
Proceeds of Long Term Debt 250,000 250,000
EXCESS OF EXPENDITURES OVER REVENUE
AND OTHER SOURCES ($1,272,558) ($221,002) ($1,051,556)
FUND BALANCES
Beginning of year 5,010,558
Interfund Transfer 112,476
Adjustment to conform to generally accepted
accounting principles:
Adjustment for encumbrances 162,321
Adjustment for Interest (8,291 )
End of year $5,056,062
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CHANGES IN PLAN NET ASSETS - FIDUCIARY FUND TYPE -
EMPLOYEE PENSION TRUST FUNDS
Year Ended September 30,1997
Additions:
Contributions:
State Tax on Insurance Premiums
Employer Contributions
Employee Contributions
$ 119,750
37,764
120.709
Total Contributions
278,223
Investment Income:
Net Appreciation in Fair Value of Investments
Interest and Dividends
1,342,618
217.398
1,560,016
Less: Investment Expenses
(44.720)
Investment Income, net
1.515.296
Total Additions
1,793,519
Deductions:
Benefits Paid to Participants
Refunds on Termination
Administrative Expenses
43,067
19,925
29.853
Total Deductions
92.845
Net Increase
1,700,674
Net Assets Held in Trust for Pension Benefits:
Beginning of year (as restated)
5.121.140
End of year
$6.821.814
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
September 30,1997
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 Employees'
Pension Trust Fund, the Municipal Police Officers' 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 former City Administrator who maintained a preexisting pension trust
fund. Additionally, the organizations exist for the benefit of the employees of the City. The
separate financial statements of the pension plans can be obtained from the City.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1997
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 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. This fund balance was transferred to the general fund in
1997 because the general obligation bonds were repaid in 1996.
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 fiduciary fund type:
Employee Pension Trust Fund - Pension trust funds are used to account for net assets
held in trust for pension benefits. Because of the long-term nature of defined benefit
plans, financial statements alone cannot provide sufficient information to accomplish
the financial reporting objective. Therefore, historical trend information is included
as supplementary information.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
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. 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 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 or results of operations 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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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
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.
2. Public hearings are conducted to obtain taxpayer comments.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 final approved budget after amendments adopted
by the City Council.
Formal budget integration is not employed for 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. INVESTMENTS
The governmental fund investments consist of nonnegotiable certificates of deposit which
are valued at cost.
The fiduciary fund investments are reported at fair value. Short-term investments are
reported at cost which approximates market value. Securities traded on a national exchange
are valued at the last reported sales price. Interest income is recognized when earned. Gains
and losses from the sale or exchange of investments are recognized on the transaction date.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. 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.
I. 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.
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.
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 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$169,335 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 annual
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
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 2 - COMPARISON OF BUDGET TO ACTUAL RESULTS (Continued)
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
Accrued Interest
Encumbrances - September 30, 1997
Less prior year encumbrances paid
Adjustment for encumbrances
$3,710,326
(8,291 )
$206,951
(44.630)
162.321
Expenditures on Budgetary Basis
$3.864.356
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,
1997 totaling $2,741,969 which are included in cash and investments in the accompanying combined
balance sheets in the amount of $2,699,483.
At September 30, 1997, the City has $2,221,119 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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 3 - CASH AND INVESTMENTS (Continued)
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 which are insured by the Federal Deposit Insurance
Corporation, 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 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 stocks
Accrued income
Historical
Value
Market
Value
$ 15,205
911,086
1,032,597
17.203
1.976.091
$ 15,205
937,373
1,930,548
17.203
2.900.329
Municipal firefighters' pension trust fund:
Cash equivalents
Government and agency securities
Corporate stocks
Accrued income
10,567
300,664
362,394
5.609
679.234
10,567
310,056
666,237
5.609
992.469
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
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
Historical Market
Value Value
8,899 8,899
790,882 817,958
102,135 100,734
1,095,492 1,957,823
15.886 15.886
2.013.294 2.901.300
$4.668.619 $6.794.098
Total Investments
NOTE 4 - PROPERTY TAXES
The City's property tax is levied annually on the real and personal property located in the City on
January 1 st of the prior year. The assessed value on which the 1996-97 levy was based was
$156,350,620. 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,
1997 were 97% 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 1996-97 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 1. 1996 Additions Retirements September 30. 1996
Land and improvements $ 805,358 $ $ $ 805,358
Buildings and improvements 412,153 2,588 414,741
Furnishings and equipment 632,395 384,709 9,600 1,007,504
Rolling stock 332.095 - 332.095
Totals $2.182.001 $387.297 $9.600 $2.559.698
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1997
NOTE 5 - CHANGES IN GENERAL FIXED ASSETS (Continued)
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, 1997, the value assigned
to general fixed assets acquired prior to October 1, 1981 was $840,579.
NOTE 6 - LONG-TERM DEBT
Long-term debt as of September 30, 1997 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 ofthe City's
share of the local option gas tax, municipal tax on motor fuels
and motor fuel rebate
$1,222,718
5.528% note to a bank, payment of $40,000, including interest,
due annually through October 1, 2003 with final payment due
October 2004 of $27,171; collateralized by annually budgeted
non-ad valorem revenues
250.000
$1.472.718
A summary of changes in all long-term debt for the year ended September 30, 1997 is as follows:
Balance at September 30, 1996
Proceeds
Payments
Net Change in Accrued Liabilities
Accrued
Liabilities
$192,405
GENERAL LONG-TERM DEBT
Municipal Gas Tax
Promissory Revenue
Note Note
$ $1,352,739
250,000
(130,021)
Notes
Total
$1,352,739
250,000
(130,021)
(23.070)
Balance at September 30, 1997
$169.335
$250.000 $1.222.718 $1.472.718
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 6 - LONG-TERM DEBT (Continued)
At September 30, 1997, the annual principal requirements and the annual requirements to amortize
all debt outstanding, (including interest payments aggregating $329,690) for the next five years and
thereafter are as follows:
Municipal Promissory Note Gas Tax Revenue Note Aggregate
Principal Principal Principal
Year Ending and and and
September 30. Principal Interest Principal Interest Principal Interest
1998 $ 31,709 $ 40,000 $ 136,937 $ 199,365 $ 168,646 $ 239,365
1999 27,934 40,000 144,221 199,365 172,155 239,365
2000 29,478 40,000 151,767 199,365 181,245 239,365
2001 3 1 , 107 40,000 159,963 199,365 191,070 239,365
2002 32,827 40,000 168,472 199,365 201,299 239,365
Thereafter 96.945 107.171 461.358 498.412 558.303 605.583
$250.000 $307.171 $1.222.718 $1.495.237 $1.472.718 $1.802.408
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
Fiduciary fund
Due to
Other Funds
$10,590
Total all Funds
$10.590
$10.590
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 8 - PENSION PLANS
The City has three pension plans covering substantially all the City's regular employees. The City
of Okeechobee, Florida Municipal Police Officers' and Municipal Firefighters' plans are under a
single employer public employee retirement system. The City of Okeechobee, Florida and
Okeechobee Utility Authority General Employees' Pension Trust 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 $14,572 (the
Utility Authority contributed $23,192) based on a covered payroll and a total payroll as follows:
Police
Firefighters
General - City
General - Utility Authority
Covered
Payroll
$628,661
249,710
481,556
799,712
Total
Payroll
$633,583
292,544
592,598
865,697
Covered
Payroll as
Percent of
Total Payroll
99.2%
85.4%
81.3%
92.4%
The City and the Utility Authority fund the General pension plan at the rate of 2.9% of covered
payroll for participants. The City funds the Police and Fire pension plans for any contribution deficit
determined by actuarial valuation for the Police and Firefighters' 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
firefighters, and 2% for general, 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.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
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, 1997, which consisted entirely
of normal cost, was as follows:
Police
Firefighters
General
$34,894
12,059
23,505
The employer and employee contributions by fund for the year ended September 30, 1997 were as
follows:
City
Utility Authority
Totals
Employer
$14,572
23.192
$37.764
Employee
$ 72,726
47.983
$120.709
The plans covering the City's firefighters and police officers are also funded by the State of Florida
from a tax on fire insurance and casualty insurance premiums collected. State contributions to the
firefighters and police officers plans totaled $36,690 and $83,060, respectively, during the year
ended September 30, 1997. 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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 8 - PENSION PLANS (Continued)
The standardized measure of the pension benefit obligation and the net assets available for benefits
at September 30, 1997 (the most recent valuation date) is as follows:
Police Firefighters 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 $ 546,021 3 $ 10,881 1 $ 413,541 7
Current employees:
Accumulated employee contributions
including allocated investment
mcome 237,500 94,383 558,198
Employer-financed vested 745,484 7 180,223 3 735,962 28
Employer-financed nonvested 205.414 12 50.876 ~ 64.589 30
Total pension benefit obligation 1,734,419 22 336,363 12 1,772,290 65
Net assets available for benefits (at market) 2.901.735 995.942 2.924.13 7
Assets in excess of pension
benefit obligation $1,167.316 $659.579 $1,151.847
There were no changes in benefits or 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.
Interest - 8% per year compounded annually, after paying investment management fees.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
NOTE 8 - PENSION PLANS (Continued)
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
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. Through September 30, 1997, the City has disbursed $71,865 of this grant. Subsequent
to September 30, 1997, the City entered into a construction contract to complete the project.
Remaining grant monies will be recognized as construction progresses.
Hospice
During the year ended September 30, 1997, the City was awarded a Community Services Block
Grant (97SB-7M-07-57-02-061) totaling $5,864 for local community health and human services
assistance. Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee. The City
received $6,527 under this and a previous grant during the year ended September 30, 1997 and, upon
presentation of invoices by Hospice, disbursed the funds.
Local Law Enforcement Block Grant
During the year ended September 30, 1997, the City was awarded a Local Law Enforcement Block
Grant (97-CJ-6U-07-57-02-022) totaling $6,398 for purchase, installation and training of a computer
reporting system for police officers. The City did not expend the monies until 1998.
Land Development Regulation
In March 1997, the City entered into a highway maintenance agreement (contract #BA-920) with the
State of Florida Department of Transportation for an annual amount of $28,880. The contract is
renewable annually. In 1997, $14,440 was recorded as reimbursement for expenditures incurred by
the City relating to the project under this contract. This City also received $4,033 in the year ended
September 30, 1997 under a prior contract.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The City has contracts for engineering and maintenance projects at September 30, 1997 in the normal
course of business.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1997
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 1997, the City executed a three year lease for police and other City vehicles. Payments under the
lease are due in quarterly installments of $15,000, with a final payment of $250,760 due in 2000.
The lease provides for termination at any quarterly payment date. The City intends to dispose of the
vehicles and terminate the lease in 1998. Rent expense under this and a previous lease was $63,152
in 1997.
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 QUA. 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 OUA, the OUA
utilized office space and police dispatch services of the City for a portion of the year ended
September 30,1997 for a fee of$23,377. These services were discontinued in 1997.
NOTE 12 - CHANGE IN ACCOUNTING PRINCIPLE
During the year, the Employee Pension Trust Funds adopted Governmental Accounting Standards
Board Statements #25 and #27. Accordingly, the beginning balance of Plan Net Assets has been
restated to recognize the unrealized gain on investments as of October 1, 1996. This resulted in an
increase to beginning plan net assets of$896,874.
At the end of 1997, the fund had assets in excess of the actuarial accrued liability, therefore, the
disclosure regarding the amortization method used for any unfunded actuarial accrued liability is not
applicable.
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30, 1997
Variance
Favorable
Budget Actual (Unfavorable)
TAXES
Ad valorem taxes $ 603,700 $ 591,985 $(11 ,715)
Franchise fees 270,000 323,254 53,254
Utility service taxes 369,000 395,437 26,437
Public service taxes 1.000 1.308 308
1.243.700 1.311.984 68.284
mTERGOVERNMENTAL
State shared revenue:
Cigarette tax - two cent 81,000 82,502 1,502
Revenue sharing 162,000 176,013 14,013
One-half cent sales tax 190,000 210,772 20,772
One-cent sales surtax 300,000 349,451 49,451
Mobile home licenses 2,500 6,068 3,568
Alcoholic beverage licenses 1,000 1,804 804
Gasoline tax refund 3,200 2,063 (1,137)
Local option gasoline tax 300,000 381,987 81,987
Local alternate fuel user fee 236 236
Insurance premium taxes 117,350 119,750 2,400
Firefighters supplement 600 300 (300)
1,157,650 1,330,946 173,296
Shared revenue from other local units:
County occupational licenses 4.000 12.082 8.082
1.161.650 1.343.028 181.378
CHARGES FOR SERVICES
Okeechobee Utility Authority 35,000 23,377 (11,623)
Sanitation fees 197,100 222,030 24,930
Highway maintenance contract 15,200 18,473 3,273
Miscellaneous 400 2.726 2.326
247.700 266.606 18.906
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
(CONTINUED)
Year Ended September 30, 1997
Variance
Favorable
Budget Actual (Unfavorable)
LICENSES AND PERMITS
Occupational licenses and regulatory fees 38,500 53,761 15,261
Building permits 25.000 34.523 9.523
63.500 88.284 24.784
FINES AND FORFEITURES
Court fines 23,000 34,861 11,861
Radio Communication 2,838 2,838
Police education 300 725 425
Code enforcement fines 500 148 (352)
Investigation cost reimbursement 2.000 210 (1.790)
25.800 38.782 12.982
INTEREST INCOME 230.850 267 .825 36.975
CDB GRANT 536.802 40.322 (496.480)
MISCELLANEOUS
Hospice Grant 5,600 6,527 927
Public Safety Grant 7,110 6,398 (712)
Miscellaneous Improvements 13,000 13,768 768
Sale of assets 10,000 9,554 (446)
Rents and royalties 400 (400)
Refunds of prior year expenditures 500 75 (425)
Miscellaneous and other 10.400 201 (10.199)
47.010 36.523 (10.487)
Total Revenue $3.557.012 $3.393.354 $(163.658)
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I CITY OF OKEECHOBEE, FLORIDA
I GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
I Year Ended September 30, 1997
ENCUMBRANCES
AND INTEREST ACTUAL ON VARIANCE
BUDGETARY FAVORABLE
I BUDGET ACTUAL 1996 1997 BASIS (UNFAVORABLE)
PUBLIC SAFETY
Law enforcement:
Personal services $999,433 $994,869 $994,869 $4,564
I Operating expenses 168,700 163,523 163,523 5,177
Capital outlay 72.883 66,707 66,707 6,176
1,241,016 1,225,099 1,225,099 15.917
Fire control:
Personal services 411,480 411,355 411,355 125
I Operating expenses 67,431 59,515 1,156 58,359 9,072
Capital outlay 259,227 257,290 229 257,519 1,708
738,138 728,160 1,156 229 727,233 10.905
Emergency and Disaster Relief:
I Capital outlay 93,275 2,588 2,588 90,687
Total Public Safety 2,072,429 1,955,847 1,156 229 1,954,920 117,509
GENERAL GOVERNMENT
I Legislative:
Personal services 45,430 45,205 45,205 225
Operating expenses 12,000 9,700 9,700 2,300
57,430 54,905 54,905 2,525
I Executive - city administrator:
Personal services 110,146 108,059 108.059 2,087
Operating expenses 11,500 12,905 12,905 (1,405)
121,646 120,964 120,964 682
Executive - city clerk:
I Personal services 67,750 66,933 66,933 817
Operating expenses 15,250 15.777 15.777 (527)
Capital outlay 7,477 7,229 7,229 248
90,477 89,939 89,939 538
I Financial and administrative:
Personal services 65,410 58,632 58,632 6,778
Operating expenses 45,100 45,241 45,241 (141)
Capital outlay 5,500 4.079 4,079 1,421
116,010 107,952 107,952 8,058
I General services:
Personal services 59,030 58,120 58,120 910
Operating expenses 97,265 101,202 338 101,540 (4,275)
Capital outlay 1,049 1,049 1,049 0
I 157,344 160,371 338 160,709 (3,365)
Judicial:
Operating expenses 30,000 27,414 27,414 2,586
Total General Government 572.907 561,545 338 561,883 11 ,024
I TRANSPORTATION
Road and street facilities:
Personal services 264,220 266,350 266,350 (2.130)
Operating expenses 211,450 199,121 4,046 203,167 8,283
Capital outlay 993,000 246,981 43,474 202,338 405,845 587,155
I Total Transportation 1,468,670 712,452 43,474 206.384 875,362 593,308
PHYSICAL ENVIRONMENT
Garbage/solid waste control services:
Operating expenses 190,000 191,996 191,996 (1,996)
I ECONOMIC ENVIRONMENT
CDB Grant 536,813 39,476 39,476 497.337
HEALTH AND HUMAN SERVICES
I Operating expenses 39,385 43,017 43,017 (3,632)
DEBT SERVICE
Principal 130,022 130,021 130,021 1
Interest 69,344 75,972 (8,291) 67,681 1,663
I Total Debt Service 199,366 205,993 (8,291) 197.702 1,664
TOTAL EXPENDITURES $5,079,570 $3,710,326 $44.630 $198,660 $3,864,356 $1,215,214
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CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING STATEMENTS OF PLAN NET ASSETS
September 30,1997
Municipal Municipal
Police Fire- General
Officers' Fighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund Total
ASSETS
Cash $ 9,428 $ 7,048 $ 16,908 $ 33,384
Contributions Receivable 3,463 1,560 15,502 20,525
Investments (at fair value):
Cash Equivalents 15,205 10,567 8,899 34,671
Government and Agency
Securities 937,373 310,056 817,958 2,065,387
Corporate Bonds 100,734 100,734
Corporate Stocks 1,930,548 666,237 1,957,823 4,554,608
Cash and Accrued Income 17 .203 5.609 15.886 38.698
Total Investments 2.900.329 992.469 2.901.300 6.794.098
Total Assets 2,913,220 1,001,077 2,933,710 6,848,007
LIABILITIES:
Accounts payable 11.485 5.135 9.573 26.193
Net Assets Held in Trust for
Pension Benefits $2.901.735 $ 995.942 $2.924.137 $6.821.814
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I CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING STATEMENTS OF
I CHANGES IN PLAN NET ASSETS
Year Ended September 30, 1997
I Municipal Municipal
Police F ire- General
I Officers' Fighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund Total
I ADDITIONS
Contributions:
State tax on insurance premiums $ 83,060 $ 36,690 $ $ 119,750
I Employer contributions 600 37,164 37,764
Employee contributions 31.343 12.488 76.878 120.709
I Total Contributions 114,403 49,778 114,042 278,223
Investment income:
I Net Appreciation in Fair Value of
Investments 568,469 195,912 578,237 1,342,618
I Interest and Dividends 92.023 31.757 93.618 217.398
660,492 227,669 671,855 1,560,016
I Less: Investment Expense (19.008) (6.475) (19.237) (44.720)
I Investment Income, net 641.484 221.194 652.618 1.515 .296
Total Additions 755.887 270.972 766.660 1. 793.519
I DEDUCTIONS
Refunds on Termination 19,925 19,925
I Benefits Paid to Participants 7,495 35,572 43,067
Administrative Expenses 12.508 9.847 7.498 29.853
I Total Deductions 20.003 9.847 62.995 92.845
Net Increase 735,884 261,125 703,665 1,700,674
I NET ASSETS HELD IN TRUST
FOR PENSION BENEFITS
I Beginning of year (as restated) 2.165.851 734.817 2.220.472 5.121.140
I End of year $2.901.735 $995.942 $2.924.137 $6.821.814
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CITY OF OKEECHOBEE
EMPLOYEE PENSION TRUST FUNDS
REQUIRED SUPPLEMENTARY INFORMATION
September 30, 1997, 1996 and 1995
(Unaudited)
Municipal
Police Municipal General
Officers' Firefighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund
Actuarial Valuation Date 1997 1997 1997
Actuarial Value of Plan Assets $2,439,616 $838,725 $2,480,734
Actuarial Accrued Liability (AAL) 1.868.179 379.372 1.954.304
Total Funding Excess $ 571.437 $459.353 $ 526.430
Actuarial Value of Assets as a Percentage of
the AAL (Funded Ratio) 130.6% 221.1 % 126.9%
Annual Covered Payroll $ 628,661 $249,710 $1,262,308
Ratio of Funding Excess to Annual Covered
Payroll (as a percentage) 90.9% 184.0% 41.7%
Actuarial Valuation Date 1996 1996 1996
Actuarial Value of Plan Assets $1,965,251 $668,171 $2,480,734
Actuarial Accrued Liability (AAL) 1.576.026 314.838 1.954.304
Total Funding Excess $ 389.225 $353.333 $ 526.430
Actuarial Value of Assets as a Percentage of
the AAL (Funded Ratio) 124.7% 212.2% 126.9%
Annual Covered Payroll $ 537,200 $240,042 $1,166,903
Ratio of Funding Excess to Annual Covered
Payroll (as a percentage) 72.5% 147.2% 28.6%
Actuarial Valuation Date 1995 1995 1995
Actuarial Value of Plan Assets $1,699,090 $579,512 $ I ,826, 194
Actuarial Accrued Liability (AAL) 1.368.631 274.719 1.562.323
Total Funding Excess $ 330.459 $304.793 $ 263.871
Actuarial Value of Assets as a Percentage of
the AAL (Funded Ratio) 124.1% 210.9% 116.9%
Annual Covered Payroll $ 42,552 $218,217 $1,092,611
Ratio of Funding Excess to Annual Covered
Payroll (as a percentage) 68.5% 139.7% 24.2%
Factors that Significantly Affect the Identification of Trends in the Amounts Reported:
Municipal Police Officers' Pension Trust Fund: none
Municipal Firefighters' Pension Trust Fund: none
Municipal General Employees' Pension Trust Fund: Effective September 28, 1995, the benefit formula was
increased from 1.75% to 2.0%; employee contributions increased from 5% to 6%; and early retirement was
changed to 55 with 10 years of service.
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AND
STATE FINANCIAL AWARDS
Year Ended September 30,1997
Cash Cash
October I, September 30,
Federal or State 1996 1997
Grantor/ Federal Award Beginning Ending
Prol!.ram Title CFDA No. Amount Balance Receipts EXDenditures Balance
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
Passed through State Department
of Community Affairs
Community Development Block Grant
#95DB-65-07-57-02-C37 14.219 $575,000 $2,576 $40,322 $39,476 $3,422
U.S. DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Passed through State Department
of Community Affairs
Community Services Block Grant
#96SB-5H-07 -57 -02-064 13.792 $5,864 $ - $1,640 $1,640 $
#97SB- 7M -07 - 57 -02-061 13.792 $5,864 $ - $4,887 $4,887 $
U.S. DEPARTMENT OF JUSTICE
Passed through State Department
of Community Affairs
Local Law Enforcement Block Grant
#97CJ-6U-07 -57-02-022 16.592 $6,398 $ - $6,398 $ $6,398
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL
AND STATE AWARDS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The Schedule of expenditures of federal and state awards is a summary of the activity in the City's
federal award programs presented on the accrual basis of accounting in accordance with generally
accepted accounting principles.
NOTE 2 - COMMUNITY DEVELOPMENT BLOCK GRANT
In accordance with the terms of the grant, the City has expended matching contributions totaling
$52,684 during the year ended September 30, 1997.
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CITY OF OKEECHOBEE, FLORIDA
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
Year Ended September 30, 1997
DESCRIPTION
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance - $250 deductible)
Scheduled Property Floater ($250 deductible)
Inland Marine Equipment
Commercial Crime
Public Employees Faithful Performance Blanket
Public Employee Honesty Blanket
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)
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COVERAGE
$1,126,200
$ 355,100
$ 307,000
$ 10,000
$ 20,000
$ 25,000
$2,000,000
$6,000,000
$2,000,000
$1,000,000
$2,000,000
$2,000,000
$1,000,000
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I CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
I 1988 - 1997
I ASSESSED V ALVES
FISCAL REAL PERSONAL HOMESTEAD
I YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1997 $124,437,676 $31,912,944 $156,350,620 $27,180,431
I 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
I 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
I 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
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I TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
I DEBT GENERAL
FISCAL DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
I 1997 $ 0 $616,021 .000 3.940
1996 46,604 602,080 .260 3.940
I 1995 23,470 675,914 .170 4.940
1994 48,006 664,734 .300 4.940
1993 61,821 552,896 .390 4.150
I 1992 62,523 562,423 .390 4.150
1991 59,597 531,595 .390 4.150
1990 56,753 504,594 .390 4.150
I 1989 52,114 455,605 .390 4.150
1988 39,231 447,369 .300 4.150
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUE - UNAUDITED
1988 - 1997
GENERAL FUND
State
Revenue
Sharing Occupational Utility Fines and Franchise
Year (Note) Licenses Taxes Forfeitures Fees Interest
1997 $469,287 $47,914 $395,437 $38,782 $323,254 $267,825
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
NOTE - INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND HALF-CENT SALES TAX
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510. Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954J 419-1040
1560-3 Capital Circle N. W., Tallahassee. Florida 32303 Toll Free (BBB) 419-2727
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the financial statements of the City ofOkeechobee, Florida (City) as of and for the
year ended September 30,1997, and have issued our report thereon dated March 25,1998, We
conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit and, accordingly, we do not express such an
opinion. The results of our tests disclosed no instances of noncompliance that are required to be
reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion
on the financial statements and not to provide assurance on the internal control over financial
reporting. However, we noted certain matters involving the internal control over financial reporting
and its operation that we consider to be reportable conditions. Reportable conditions involve matters
coming to our attention relating to significant deficiencies in the design or operation of the internal
control over financial reporting 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 financial statements. Reportable conditions are described in the accompanying schedule of
findings and questioned costs as item 97-1.
A material weakness is a condition in which the design or operation of one or more of the internal
control components does not reduce to a relatively low level the risk that misstatements in amounts
that would be material in relation to the financial statements being audited may occur and not be
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detected within a timely period by employees in the normal course of performing their assigned
functions. Our consideration of the internal control over financial reporting would not necessarily
disclose all matters in the internal control that might be reportable conditions and, accordingly,
would not necessarily disclose all reportable conditions that are also considered to be material
weaknesses. We believe the reportable condition described above is a material weakness. We also
noted other matters involving the internal control over financial reporting that we have reported to
management of the City of Okeechobee, Florida in a separate letter dated March 25, 1998.
This report is intended for the information of the audit committee, management and federal awarding
agencies, pass-through entities and the Auditor General ofthe State of Florida. However, this report
is a matter of public record and its distribution is not limited.
March 25, 1998
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510. Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
1560-3 Capital Circle N. w., Tallahassee, Florida 32303 Toll Free (BBB) 419-2727
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH
MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN
ACCORDANCE WITH OMB CIRCULAR A-133
The Honorable Mayor
and Members of the City Council
City of Okeechobee, Florida
Compliance
We have audited the compliance of the City of Okeechobee, Florida (City) with the types of
compliance requirements described in the U S. Office of Management and Budget (OMB) Circular
A-I33 Compliance Supplement that are applicable to its major federal program for the year ended
September 30, 1997. The City's major federal program is identified in the summary of auditor's
results section of the accompanying schedule of findings and questioned costs. Compliance with
the requirements of laws, regulations, contracts and grants applicable to its major federal program
is the responsibility of the City's management. Our responsibility is to express an opinion on the
City's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards;
the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that
we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
types of compliance requirements referred to above that could have a direct and material effect on
a major federal program occurred. An audit includes examining, on a test basis, evidence about the
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on the City's compliance with those
requirements.
In our opinion, the City complied, in all material respects, with the requirements referred to above
that are applicable to its major federal program for the year ended September 30, 1997.
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a major
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federal program in order to determine our auditing procedures for the purpose of expressing our
opinion on compliance and to test and report on internal control over compliance in accordance
with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters
in the internal control that might be material weaknesses. A material weakness is a condition in
which the design or operation of one or more of the internal control components does not reduce to
a relatively low level the risk that noncompliance with applicable requirements of laws, regulations,
contracts and grants that would be material in relation to a major federal program being audited may
occur and not be detected within a timely period by employees in the normal course of performing
their assigned functions. We noted no matters involving the internal control over compliance and
its operation that we consider to be material weaknesses.
This report is intended for the information of the audit committee, management and federal awarding
agencies, pass-through entities and the Auditor General of the State of Florida. However, this report
is a matter of public record and its distribution is not limited.
c;~.~/~
March 25, 1998
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended September 30,1997
SECTION I - SUMMARY OF AUDITORS' RESULTS
Financial Statements
Type of auditor's report issued: qualified
Internal control over financial reporting:
Material weakness( es) identified?
Reportable condition(s) identified
not considered to be material weaknesses?
_X.ses_no
____yes-X-nonereported
Noncompliance material to financial statements noted?
____yes-X-no
Federal Awards
Internal Control over major programs:
Material weakness( es) identified?
Reportable condition(s) identified
not considered to be material weaknesses?
-yes-X-no
____yes-X-nonereported
Type of auditor's report issued on compliance for
major programs: unqualified
Any audit findings disclosed that are required to be reported
in accordance with Circular A-133, Section .51O(a)?
-yes-X-no
Identification of major program:
CFDA Number
14.219
Name of Federal Program or Cluster
H.D.D. Community Development Block Grant
Dollar threshold used to distinguish between Type A and
Type B programs:
$ not applicable
Auditee qualified as low-risk auditee?
____yes-X-no
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SECTION II - FINANCIAL STATEMENT FINDINGS
97-1 Fixed Asset Group
Condition: 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. The City
contracted with a firm to evaluate the historic cost or donated value of all existing physical assets
of the City. The project was not completed.
Context: 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.
Recommendation: The City should request that the evaluation of the physical assets be completed.
The information developed should be used to evaluate the recorded values. Where the records are
missing, the City should consider utilizing insurance values or other estimates to develop a
reasonable record of all assets of the fixed asset group. Once complete records are established the
City should ensure that additional acquisitions and disposals are properly recorded and accounted
for. Additionally, a physical inventory offixed assets should be performed at least every two years.
Management's response: See separate letter of response.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters are reported.
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510. Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
1560-3 Capital Circle N. W.. Tallahassee. Florida 32303 Toll Free (8BB) 419-2727
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, 1997, and have issued our report thereon dated March 25, 1998.
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 Irregularities
There were no irregularities reported in the preceding financial audit to correct.
Status of Prior Year Recommendations
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, except to the extent repeated herein.
Consideration of Financial Emergencv
The City is not, nor at any time during the year ended September 30, 1997 was, in a state of financial
emergency as a consequence of conditions described in Chapter 218.503, Florida Statutes.
Florida Department Q[ 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
Cash - We noted that checks dated September 30, 1997 were prepared on October 3 and
October 20. Instead of utilizing cash disbursements to record expenditures, the City should
more effectively utilize an accounts payable system. Checks should be dated the date they
are produced and should be mailed in a timely manner.
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We also noted that the authorized signatories for the account with the State Board of
Administration had not been changed to delete the former city administrator and finance
director.
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 from the OUA on a monthly basis. The City should also periodically
review the billing procedures and detail billing reports generated by the OUA.
Accounts Payable - Public Works - In performing our audit procedures, we noted that
contractor billings for roadway improvement services through September 30, 1997 were not
included in accounts payable nor encumbrances. The department heads should advise the
finance department of contractual services completed through September 30 that should be
recorded as accounts payable and contracts that should be recorded as encumbrances.
Violations of Laws. Rules and Re{fulations
We did not become aware of any violations of laws, rules, and regulations during the course of our
audi 1.
Ille{fal or Improper 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.
~./)~/~
J.D. Gilbert & Company, CPAs
March 25, 1998
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