OUA Audit Report 9-30-2022
OKEECHOBEE UTILITY AUTHORITY
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR’S REPORT THEREON
SEPTEMBER 30, 2022
OKEECHOBEE UTILITY AUTHORITY
SEPTEMBER 30, 2022
TABLE OF CONTENTS
Pages
Independent Auditor's Report 1 - 3
Management’s Discussion and Analysis (required supplementary information) 4 - 9
Basic Financial Statements:
Statement of Net Position 10- 11
Statement of Revenues, Expenses, and Changes in Net Position 12
Statement of Cash Flows 13-14
Statement of Fiduciary Net Position 15
Statement of Changes in Fiduciary Net Position 16
Notes to Financial Statements 17-44
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Changes in Total OPEB Liability 45
Schedule of Changes in Net Pension Liability and Related Ratios 46
Schedule of Employer Contributions and Investment Returns 47
Notes to the Schedule of Contributions 48
OTHER INFORMATION
Schedule of Revenues and Expenses 49
Information Required by Section 218.39(3)(c), Florida Statutes 50
Budgetary Schedule 51
OKEECHOBEE UTILITY AUTHORITY
SEPTEMBER 30, 2022
TABLE OF CONTENTS
(Continued)
Pages
OTHER REPORTS
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and on Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 52-53
Independent Auditor’s Report on Compliance for the Major
State Project and on Internal Control Over Compliance
Required by Chapter 10.550, Rules of the Auditor General 54-56
Schedule of Expenditures of State Financial Assistance 57
Schedule of Findings and Questioned Costs 58-59
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 60-62
Independent Accountant’s Report on Compliance with
Section 218.415, Florida Statutes 63
1
INDEPENDENT AUDITOR’S REPORT
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the proprietary fund and aggregate
remaining fund information of the Okeechobee Utility Authority, as of and for the year ended
September 30, 2022, and the related notes to the financial statements, which collectively
comprise the Okeechobee Utility Authority’s basic financial statements as listed in the table of
contents.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the Okeechobee Utility Authority, as of September 30, 2022,
and the respective changes in financial position and cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of the Okeechobee
Utility Authority and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America; and
for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the
Okeechobee Utility Authority’s ability to continue as a going concern for twelve months beyond
the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
2
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but
is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with generally accepted auditing standards and Government Auditing Standards will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in
the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Okeechobee Utility Authority’s internal
control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the Okeechobee Utility Authority’s ability to
continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis on pages 4 through 9 be presented to supplement the basic
financial statements. Such information is the responsibility of management and, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
3
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Okeechobee Utility Authority’s basic financial statements. The
accompanying schedule of expenditures of state financial assistance, presented as required by
Chapter 10.550, Rules of the Auditor General, is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such information is the responsibility
of management and was derived from and relates directly to the underlying accounting and other
records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, schedule of
expenditures of state financial assistance is fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The schedule
of revenues and expenses on page 49 is presented for purposes of additional analysis, and the
information on pages 50 and 51 is presented for compliance with Section 218.39(3)(c), Florida
Statutes and Section 10.554(1)(i)6, Rules of the Auditor but does not include the basic financial
statements and our auditor’s report thereon. Our opinions on the basic financial statements do not
cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the
other information and consider whether a material inconsistency exists between the other
information and the basic financial statements, or the other information otherwise appears to be
materially misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
May 3, 2023, on our consideration of the Okeechobee Utility Authority’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely to describe
the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the Okeechobee
Utility Authority’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in
considering Okeechobee Utility Authority’s internal control over financial reporting and
compliance.
West Palm Beach, Florida
May 3, 2023
4
Okeechobee Utility Authority
Management’s Discussion and Analysis
For the Fiscal Year Ended September 30, 2022
Management’s Discussion and Analysis (MD&A) is intended to provide an objective analysis of the
Okeechobee Utility Authority (the “Authority”) financial activities for fiscal year ended September
30, 2022. The analysis provides summary financial information for the Authority and should be read
in conjunction with the audited financial statements.
FINANCIAL HIGHLIGHTS
§ The Authority’s assets exceeded its liabilities at September 30, 2022, by $60.5 million (Net
Position). Of this amount, approximately $8.6 million is its unrestricted net position (Table 1).
§ The Authority’s operating revenues increased $588,796 over FY2021 and operating expenses
increased by $1,424,529 from FY2021 (Table 2).
§ Operating expenses were $730,758 less than budget.
§ The Authority received $2,700,665 in capital grant funding from the Florida Department of
Environmental Protection to help pay for the 1) Septic to Sewer project referred to as the
Southwest Wastewater Service Area, and 2) expanding the wastewater collection system for Pine
Ridge Park community.
§ The Authority’s total capital assets, before accumulated depreciation, increased by approximately
$1.2 million from FY2021 (Table 3).
OVERVIEW OF THE FINANCIAL STATEMENTS
This management discussion and analysis (MD&A) is intended to serve as an introduction to the
Authority’s financial statements. Since the Authority is a special district involved solely in the
provision of water and wastewater services within the service area of the utility system, its operations
are accounted for in a Proprietary Fund, specifically an Enterprise Fund. Enterprise Funds are used
to report business-type functions, which recover all or a significant portion of their costs through user
fees and charges. Over time, significant changes in the Authority’s net position serve as a useful
indicator of whether its financial health is improving or deteriorating. To fully assess the financial
health of any entity, the reader must also consider other non-financial factors such as changes in
economic conditions, customer growth, and legislative mandates.
The Okeechobee Utility Authority Employees’ Retirement System is a component unit of the
Authority as it is fiscally dependent on and imposes a specific financial burden. It is reported in the
Authority’s financial statements as a Fiduciary Fund, the Employee’s Pension Trust Fund. Fiduciary
Funds are not included in the government-wide financial statements because the Authority cannot use
these assets to finance its operations. Therefore, there are no government-wide financial statements,
as they would be redundant to the fund financial statements.
5
REQUIRED FINANCIAL STATEMENTS
The financial statements report information about the Authority using accounting methods similar to
those used by private business entities. The costs of providing goods or services are primarily
recaptured through user charges for water and wastewater services. The full accrual basis of
accounting is used whereby revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows.
The Statement of Net Position includes the Authority’s assets, deferred outflows of resources,
liabilities, and deferred inflows of resources. It provides information about the nature and amounts of
investments in resources (assets) and the obligations to creditors (liabilities). It also provides the
basis for evaluating the capital structure of the Authority and assessing the liquidity and financial
flexibility of the Authority. The current year’s revenues and expenses are accounted for in the
Statement of Revenues, Expenses and Changes in Net Position. This statement measures the results
of the Authority’s operations over the past year and may be used to determine whether the Authority
is efficiently recovering all its costs through its user fees and other charges. These two statements
help the reader understand the Authority’s profitability and credit worthiness.
The third required financial statement is the Statement of Cash Flows. The primary purpose of this
statement is to provide information about the Authority’s cash receipts and cash payments during the
reporting period. This statement reports cash receipts, cash payments, and net changes in cash
resulting from operating, investing and financing activities. Answers to questions regarding sources
of cash, uses of cash, and changes in cash balances during the reporting period may be found in the
Statement of Cash Flows.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the financial statements.
FINANCIAL ANALYSIS OF THE AUTHORITY AS A WHOLE
The Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position
report information about the Authority’s activities in a way that reflects whether the Authority is
improving or deteriorating as a result of the fiscal year’s activities. These two statements report the
net position of the Authority and changes in the net position. Viewing the Authority’s net position
helps one to evaluate the financial health and financial position of the Authority. Net position is the
difference between assets and deferred outflows of resources (what is owned) and liabilities and
deferred inflows of resources (what is owed).
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FY2022 FY2021 Net Change Percent
Net Capital Assets 64,217,117$ 63,173,569$ 1,043,548$ 1.65%
Restricted Assets 4,123,270 6,089,584 (1,966,314) -32.29%
Current and Other Assets 10,937,477 8,972,526 1,964,951 21.90%
Total Assets 79,277,864 78,235,679 1,042,185 1.33%
Total Deferred Outflows 2,231,783 692,070 1,539,713 222.48%
Noncurrent Liabilities 16,508,708 17,577,792 (1,069,084) -6.08%
Liabilities Payable from
Restricted Assets 727,474 642,291 85,183 13.26%
Current Liabilities 3,203,036 2,914,167 288,869 9.91%
Total Liabilities 20,439,218 21,134,250 (695,032) -3.29%
Total Deferred Inflows 579,918 1,641,218 (1,061,300) -64.67%
Net Investment in Capital Assets 47,732,477 44,731,657 3,000,820 6.71%
Restricted for Capital Projects 2,284,179 2,361,411 (77,232) -3.27%
Restricted for Debt Service 496,506 481,018 15,488 3.22%
Restricted for Rate Stabilization 1,339,359 1,339,359 - 0.00%
Restricted for Pension Benefits - 1,904,107 (1,904,107) -100.00%
Unrestricted Net Position 8,637,990 5,334,729 3,303,261 61.92%
Total Net Position 60,490,511$ 56,152,281$ 4,338,230$ 7.73%
Table 1
Net Position
The Authority’s total net position increased $4,338,230. The condensed analysis below focuses on
the Authority’s net position (Table 1) and changes in net position from fiscal year 2021 to fiscal year
2022.
7
A comparison of the Authority’s revenues and expenses for the fiscal years ended September 30,
2022 and September 30, 2021 is as follows (Table 2):
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2022, the Authority had $64,217,117 after accumulated depreciation
invested in a broad range of utility capital assets including land, ground water plant, surface water
plant, water main system, wastewater plant, lift stations, sanitary sewer system, force mains,
equipment and construction in process.
FY2022 FY2021 Net Change Percent
Revenue
Water System Revenue 7,285,294$ 6,949,975$ 335,319$ 4.82%
Wastewater System Revenue 4,306,134 4,105,049 201,085 4.90%
Miscellaneous Revenue 253,624 201,232 52,392 26.04%
Non-Operating Revenue 74,475 47,914 26,561 55.43%
Total Revenue 11,919,527 11,304,170 615,357 5.44%
Expenses
Operating Expenses 9,964,427 8,539,898 1,424,529 16.68%
Non-Operating Expenses 472,215 523,113 (50,898) -9.73%
Total Expenses 10,436,642 9,063,011 1,373,631 15.16%
Excess Revenue over Expenses
Before Capital Contributions 1,482,885 2,241,159 (758,274) -33.83%
Capital Contributions 2,855,345 1,806,072 1,049,273 58.10%
Total Change in Net Position 4,338,230 4,047,231 290,999 7.19%
Beginning Net Position 56,152,281 52,105,050 4,047,231 7.77%
Ending Net Position 60,490,511$ 56,152,281$ 4,338,230$ 7.73%
Table 2
Revenues and Expenses
8
The Authority’s total capital assets increased after accumulated depreciation from last year by
approximately $334,000 as reflected in the following table (Table 3):
The Authority plans each year for capital improvement projects. Some projects are completed within
the fiscal year, and other projects take longer than a year to complete. In fiscal year ended September
30, 2022 US 441 SE/ 36th Ave and Conner Gable Water Main projects were completed.
Table 4 below reflects future major additions and the costs incurred as of September 30, 2022.
Table 4
Capital Improvement Projects
SW Wastewater Area Septic to Sewer $ 3,381,058
Lakeview Estates Wastewater Facility 957,223
Pine Ridge Park Wastewater expansion 414,946
SW 5th Ave WW collection Study 215,313
SWSA Okee-Tantie Project III 157,407
Other Projects 168,704
Total Ongoing CIP Projects $ 5,294,651
See Notes to the Financial Statements (Note 6) for additional information related to capital assets.
FY2022 FY2021 Net Change
Land and Easements 2,906,861$ 2,777,823$ 129,038$
Buildings 1,108,764 1,108,764 -
Equipment 4,398,318 4,385,822 12,496
Distribution & Collection System 102,080,440 100,977,101 1,103,339
110,494,383 109,249,510 1,244,873
Lease Accumulated Depreciation (51,571,917) (48,883,333) (2,688,584)
58,922,466 60,366,177 (1,443,711)
Construction in Process 5,294,651 2,807,392 2,487,259
64,217,117$ 63,173,569$ 1,043,548$
Table 3
Changes in Capital Assets
9
Debt Management
On September 30, 2022, the Authority had State Revolving Loans and notes payable outstanding in
the amount of $16,922,604. The total principal repaid in FY2022 was $2,073,096. See Notes to the
Financial Statements (Note 7) for additional information related to State Revolving Loans and notes
payable.
ECONOMIC FACTORS AND ASSESSMENT OF GROWTH
The Authority began operations in 1995. Since 1995, the net increase in new customer accounts has
been modest on an annual basis. In the most recent fiscal year ended September 30, 2022, capital
connection charge revenues for 33 water and 30 wastewater residential connections were received.
Florida’s rural central areas do not experience the same rate of growth as both the Atlantic and Gulf
coastal areas. Given current economic environment, a modest growth in the number of connections is
anticipated to be realized from new construction on vacant sites in the existing developed sections of
the Authority’s service area rather than through planned new developments.
The City of Okeechobee is approximately forty-five minutes to one hour from the Atlantic coast. The
main east and west access highways to the Atlantic coastal area are State Road 70 and State Road
710. As such, the Okeechobee Utility Authority’s service area is within a commutable range of the
Atlantic coast and its life style.
The Authority’s current water treatment plants with a total treatment capacity of six million gallons
per day (6mgd) can accommodate approximately twenty-four thousand (24,000) residential water
connections, which is greater than the existing customer base of approximately nine thousand five
hundred sixty-nine (9,602) residential connections. The Authority’s current wastewater treatment
plant with three million gallons per day (3mgd) of total treatment capacity can accommodate
approximately twelve thousand (12,000) additional wastewater customers, which is greater than the
existing customer base of approximately four thousand four hundred fifty-three (4,483). In the near-
term projection of five years, this available capacity is more than adequate to accommodate the
projected level of customer growth.
This MD&A report is designed to provide a general overview of the Okeechobee Utility Authority’s
financial health for those interested in the Authority’s financial condition. Questions concerning the
information provided in this report or requests for additional information should be addressed to
the Finance Director, 100 SW 5th Avenue, Okeechobee, Florida, 34974-4221. An audit of the
financial statements for the Authority may be obtained at the Main Office of the Authority.
THIS PAGE INTENTIONALLY LEFT BLANK
OKEECHOBEE UTILITY AUTHORITY
Statement of Net Position - Proprietary Fund
September 30, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents 6,704,851$
Restricted assets:
Cash and cash equivalents - customer deposits 724,248
Receivables:
Grants 1,392,654
Accounts receivable, less allowance for
uncollectible accounts of $116,293 1,419,777
Inventories 617,552
Prepaid expenses 78,395
Total current assets 10,937,477
NONCURRENT ASSETS
Restricted assets:
Cash and cash equivalents 4,123,270
Capital assets:
Land 2,906,861
Utility plants 107,587,523
110,494,384
Less accumulated depreciation (51,571,918)
58,922,466
Construction in progress 5,294,651
Total capital assets 64,217,117
Total noncurrent assets 68,340,387
TOTAL ASSETS 79,277,864
DEFERRED OUTFLOWS OF RESOURCES
Pension related items 1,793,819
Deferred loss on bond refunding, net 437,964
TOTAL DEFERRED OUTFLOWS OF RESOURCES 2,231,783
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LIABILITIES
CURRENT LIABILITIES
Accounts payable 672,630$
Accrued expenses 228,348
Due to other governments 33,126
Bonds payable (current)2,113,253
Accrued compensated absences (current)77,580
Unearned connection fees 78,099
Payable from restricted assets:
Accrued interest 3,226
Customer deposits 724,248
Total current liabilities 3,930,510
NONCURRENT LIABILITIES
Long-term portion of bonds payable 14,809,351
Long-term portion of compensated absences 181,021
Net pension liability 875,759
Total OPEB liability 218,175
Unearned revenues:
Developer fees 424,402
Total noncurrent liabilities 16,508,708
TOTAL LIABILITIES 20,439,218
DEFERRED INFLOWS OF RESOURCES
Pension related items 579,918
NET POSITION
Net investment in capital assets 47,732,477
Restricted for capital projects 2,284,179
Restricted for debt service 496,506
Restricted for rate stabilization 1,339,359
Unrestricted 8,637,990
TOTAL NET POSITION 60,490,511$
See notes to the financial statements.
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OKEECHOBEE UTILITY AUTHORITY
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Fund
For the Fiscal Year Ended September 30, 2022
OPERATING REVENUE
Water system charges for services 7,285,294$
Wastewater system charges for services 4,306,134
Penalties and late charges 124,598
Miscellaneous 129,026
Total operating revenues 11,845,052
OPERATING EXPENSES
Water services 1,586,181
Wastewater services 1,162,261
Maintenance 2,286,343
Meter reader 270,156
Administrative and general 1,970,902
Depreciation and amortization 2,688,584
Total operating expenses 9,964,427
OPERATING INCOME 1,880,625
NONOPERATING REVENUES (EXPENSES)
Interest revenue 29,488
Interest expense (472,215)
Operating grants 44,987
Total nonoperating revenues (expenses)(397,740)
INCOME BEFORE CAPITAL CONTRIBUTIONS 1,482,885
CAPITAL CONTRIBUTIONS
Capital grants 2,700,665
Water capital connection fees 61,737
Wastewater capital connection fees 60,585
Developer contributions for capital projects 32,358
Total capital contributions 2,855,345
INCREASE IN NET POSITION 4,338,230
NET POSITION, BEGINNING OF PERIOD 56,152,281
NET POSITION, END OF PERIOD 60,490,511$
See notes to the financial statements.
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OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund
For the Fiscal Year Ended September 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 11,829,308$
Payments to suppliers (3,365,390)
Payments to employees (2,668,880)
Payments for employee benefits (818,566)
Net cash provided (used) by operating activities 4,976,472
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (3,699,775)
Note and loan principal payments (2,073,095)
Note and loan interest paid (356,854)
Capital connection fees received 120,101
Captial grants 2,452,778
Net cash (used) by capital and related financing activities (3,556,845)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 29,488
Net cash provided by investing activities 29,488
Net increase (decrease) in cash and cash equivalents 1,449,115
Cash and cash equivalents at beginning of year 10,103,254
Cash and cash equivalents at end of year 11,552,369$
See notes to the financial statements.
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OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund (continued)
For the Fiscal Year Ended September 30, 2022
CASH AND CASH EQUIVALENTS CLASSIFIED AS:
Current assets 6,704,851$
Restricted assets 4,847,518
Total 11,552,369$
ADJUSTMENTS TO RECONCILE OPERATING INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating Income 1,880,625$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Change in net pension asset/liability and related deferred amounts 63,029
Change in total OPEB liability 172,652
Operating grants 44,987
Depreciation and amortization 2,688,584
Change in assets and liabilities:
(Increase) decrease in accounts receivable (146,377)
(Increase) decrease in inventory (38,090)
(Increase) decrease in prepaid expenses (21,275)
Increase (decrease) in accounts payable 127,686
Increase (decrease) in accrued liabilities 123,628
Increase (decrease) in compensated absences (6,060)
Increase (decrease) in deposits 85,646
Increase (decrease) in due to other governments 1,437
Total adjustments 3,095,847
Net cash provided (used) by operating activities 4,976,472$
Noncash investing, capital and financing activities
Developer contributions 32,358$
See notes to the financial statements.
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ASSETS
Cash and cash equivalents 43,719$
Contributions receivable
Employee 14,107
Employer 21,396
Prepaids 4,367
Investments: (at fair value)
Mutual funds- fixed income 3,888,825
Mutial funds - international equity 778,331
Mutial funds - domestic equity 4,883,915
Total investments 9,551,071
TOTAL ASSETS 9,634,660
LIABILITIES
Accounts payable 7,850
TOTAL LIABILITIES 7,850
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFITS 9,626,810$
OKEECHOBEE UTILITY AUTHORITY
Statement of Fiduciary Net Position
Pension Trust Fund
September 30, 2022
See notes to the financial statements.
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ADDITIONS
Contributions
Employer 191,107$
Plan members 126,005
Total contributions 317,112
Investment income
Net appreciation in fair value of investments (2,623,987)
Interest and dividends 329,747
(2,294,240)
Less: investment expenses (20,250)
Net investment income (2,314,490)
TOTAL ADDITIONS (1,997,378)
DEDUCTIONS
Benefits paid to participants 382,670
Refunds due on terminations 74,575
DROP distributions 6,990
Administrative expenses 59,798
TOTAL DEDUCTIONS 524,033
NET INCREASE (2,521,411)
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFITS
Beginning of year 12,148,221
End of year 9,626,810$
OKEECHOBEE UTILITY AUTHORITY
Statement of Changes in Fiduciary Net Position
Pension Trust Fund
For the Fiscal Year Ended September 30, 2022
See notes to the financial statements.
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OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Okeechobee Utility Authority (the “Authority”) have been
prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to
governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting
principles. The Authority’s significant accounting policies are described below.
Reporting Entity
The Okeechobee Utility Authority is an independent special district created pursuant to an
Interlocal Agreement (the “Agreement”), dated November 10, 1994, between the City of
Okeechobee (the “City”) and the County of Okeechobee (the “County”) in accordance with the
provisions of Chapters 163 and 189, Florida Statutes.
As required by generally accepted accounting principles, these financial statements include the
Authority (the primary government) and its component units. Component units are legally
separate entities for which the Authority is financially accountable. The Authority is financially
accountable if:
a) the Authority appoints a voting majority of the organization’s governing board and
(1) the Authority is able to impose its will on the organization or (2) there is a potential
for the organization to provide specific financial benefits to or impose specific financial
burdens on the Authority, or
b) the organization is fiscally dependent on the Authority and (1) there is a potential for the
organization to provide specific financial benefits to the Authority or (2) impose specific
financial burdens on the Authority.
Organizations for which the Authority is not financially accountable are also included when
doing so is necessary in order to prevent the Authority’s financial statements from being
misleading.
Based upon application of the above criteria, the Authority has determined that there is one
legally separate entity to consider as a component unit. The Okeechobee Utility Authority
Employees’ Retirement System is a component unit as it is fiscally dependent on and imposes a
specific financial burden on the Authority. It is reported in the Authority’s financial statements
as a Fiduciary Fund, the Employees’ Pension Trust Fund.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
18
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Reporting Entity (Continued)
The Authority was created in order to regionalize the water and wastewater services being
provided to the residents and customers within the service area of the utility system and to assist
in addressing environmental issues concerning the quality and supply of water for Lake
Okeechobee and South Florida. The Authority has broad powers with respect to the operation
and maintenance of the utility system.
The Authority services both residential and commercial customers and its service area includes
the City and County of Okeechobee and extends into part of the unincorporated section of
Glades County.
The Authority began operations on September 28, 1995 and is governed by a Board of Directors
comprised of five (5) members and three (3) alternates. The Board of Directors has financial
accountability and control over all activities relating to the operations of the Authority.
Basis of Presentation
The Authority is accounted for as a proprietary type enterprise fund. Enterprise funds are used to
account for activities that are financed and operated in a manner similar to private business
enterprises. Enterprise funds are used in the following situations: 1) the activity is financed with
debt that is secured solely by a pledge of the net revenues from fees and charges of the activity;
2) laws or regulations require that all costs of providing services, including capital costs, be
recovered from fees and charges; or 3) fees and charges are designed to recover the costs of the
activity, including capital costs.
Measurement Focus and Basis of Accounting
These financial statements are prepared using the economic resources measurement focus and
the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
Under the accrual basis of accounting, revenues are recognized when earned; expenses are
recognized when incurred. The assets, deferred outflows, liabilities, deferred inflows, and net
position of the Authority are reported in a self-balancing set of accounts, which include restricted
and unrestricted resources, representing funds available for support of the Authority’s operations.
The Employees’ Pension Trust Fund also uses the accrual basis of accounting and the economic
resources measurement focus.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
19
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from non-operating items. The
Authority’s operating revenues and expenses consist of revenues earned and expenses incurred
relating to the operation and maintenance of its system, including administrative expenses and
depreciation of capital assets. All other revenues and expenses not meeting the definition above
are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Authority’s policy
to use restricted resources first, then unrestricted resources as they are needed.
Budget Process
Pursuant to the interlocal agreement, the Authority is required to adopt a budget and provide a
copy to the City and the County. The Authority adopted its final budget relating to the fiscal year
ended September 30, 2022 on September 13, 2021
Deposits and Investments
Cash and cash equivalents include amounts on deposit in demand accounts, money market
accounts, and money market mutual funds. For the purposes of the statement of cash flows, the
Authority considers all highly liquid investments and certificates of deposit with an original
maturity of three months or less when purchased to be cash equivalents.
Investments are reported at fair value as required by generally accepted accounting principles.
The fair value of an investment is the amount that the Authority could reasonably expect to
receive for it in a current sale between a willing buyer and a willing seller, other than in a forced
or liquidation sale. The Authority categorizes its investments according to the fair value
hierarchy established by GASB Statement No. 72. The hierarchy is based on observable and
unobservable inputs used in establishing the fair value of a financial asset or liability. Purchases
and sales of investments are recorded on the trade date.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
20
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounts Receivable
Accounts receivable consist of both billed and unbilled receivables. Unbilled receivables
represent the estimated amount of accounts receivable for services that have not been billed as of
the statement of financial position date. The amounts are a result of a timing difference between
the Authority’s fiscal year end and the date the various utility cycles are subsequently billed.
Inventories
Inventories are recorded at cost using the first-in, first-out method.
Utility Plant
Property, plant, and equipment are stated at cost for items constructed or purchased. Donated
capital assets, donated works of art and similar items, and capital assets received in a service
concession arrangement are recorded at acquisition value. The Authority capitalizes all land
purchases. The capitalization policy for other assets is an initial useful life of more than one year
and an individual cost of $5,000.
Depreciation of exhaustible utility fixed assets, including those acquired through
intergovernmental grants externally restricted to capital acquisition, is charged as an expense
against operations. Depreciation of the various assets is computed over the assets’ estimated
useful lives using the straight-line method. The estimated useful lives range as follows:
Distribution and collection plants 10-60 years
Buildings 15-25 years
Equipment 3-10 years
Unearned Revenues
Unearned revenues primarily represent water and wastewater capital connection and inspection
fees and service payments that are paid in advance by customers. These fees will be recognized
as income in subsequent years as the services are performed.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
21
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred Outflow of Resources
In addition to assets, the Statement of Net Position reports a separate section for Deferred
Outflows of Resources. Deferred Outflows of Resources represent the usage of net position
applicable to future periods and will not be recognized as an expense until the future period to
which it applies. The Authority has two items that qualify for reporting in this category. The first
is the deferred amount on bond refunding. The deferred loss on current and advance refunding of
bonds is being charged to operations through the year 2030 based on the effective interest
method. The second is deferred pension items in connection with its pension plan. These
deferred pension charges amortized in a systematic and rational method as pension expense in
future periods.
Deferred Inflows of Resources
In addition to liabilities, the Statement of Net Position reports a separate section for Deferred
Inflows of Resources. Deferred Inflows of Resources represent the acquisition of net position
applicable to future periods and will not be recognized as revenue until the future period to
which it applies. The Authority currently reports deferred pension items in connection with its
pension plan. These deferred pension charges are amortized in a systematic and rational method
as pension expense in future periods.
Compensated Absences
The Authority’s policy is to allow each employee eligible for vacation leave to accumulate up to
thirty (30) days. Employees are paid unused vacation leave at current hourly rates upon
retirement or at termination. Employees of the Authority, with ten (10) years or more of
continuous service, receive payment for unused sick leave at a rate of fifty percent (50%) of
current hourly rates upon retirement or at termination. This also applies to employees at normal
retirement, regardless of length of service.
Accrued liabilities, based on hourly salary rates at September 30, 2022, are reflected in the
accounts of the Authority for vested (not contingent on an employee’s future services) vacation
and sick leave benefits.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
22
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Position
Net position is the result of assets and deferred outflows of resources less liabilities and deferred
inflows of resources. Net position is classified in three components:
Net investment in capital assets
This category consists of the Authority’s capital assets net of accumulated depreciation and
reduced by the outstanding balances of any bonds or notes that are attributable to the acquisition,
construction, or improvements of those assets.
Restricted
This category of the net position consists of constraints placed on the net position by external
constraints imposed by creditors (such as through debt covenants), grantors, contributors or laws
or regulations of other governments or constraints imposed by law through constitutional
provisions or enabling legislation.
Unrestricted
This category represents all other Authority net position that do not meet the definition of net
investment in capital assets, restricted for capital projects, or restricted for debt service as defined
earlier.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions. This will affect the reported
amounts of assets, deferred inflows and outflows, and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
23
NOTE 2 – DEPOSITS AND INVESTMENTS
Authority Deposits
As of September 30, 2022, the amount of deposits in “Qualified Public Depositories” was
$11,565,304 and the book balance was $11,549,619. The Authority also had $2,750 in petty cash
for a total carrying amount of $11,552,369.
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasurer requires all Florida qualified public depositories to deposit with the Treasurer or
banking institution eligible collateral. In the event of the failure of a qualified public depository,
the remaining public depositories would be responsible for covering any resulting losses. The
Authority’s deposits at year end are considered insured for custodial credit risk purposes.
Authority Investments
The Authority categorizes its investments according to the fair value hierarchy established
GASB Statement No. 72, Fair Value Measurement and Application. The hierarchy is based on
valuation inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted
prices in active markets for identical assets; Level 2 inputs are significant other observable inputs
to include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
The Authority’s investment policy authorizes investments in money market and savings
accounts, certificates of deposits, money market funds; bonds, notes, bills and other obligations
of the U.S. Government; repurchase agreements; securities issued or guaranteed by certain
federal agencies and instrumentalities, Local Government Surplus Trust Fund or any
intergovernmental investment fund authorized pursuant to the Florida Interlocal Cooperation
Act, commercial paper, securities issued by the Authority, any guaranteed investment contract
within the limitations established by Florida Statutes, and any other investment vehicle
authorized by Florida law and determined by the investment officer and the Board of Directors to
be a prudent investment.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
24
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
Authority Investments (Continued)
The Authority did not have any investments as of September 30, 2022.
Credit Risk
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its
obligations. The Authority’s investment policies limit its investments to high quality investments
to control credit risk.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Authority does not have a formal investment policy that limits investment
maturities as a means of managing exposure to fair value losses arising from increasing interest
rates.
Cash and cash equivalents are presented in the balance sheet as of September 30, 2022, as
follows:
Current cash and cash equivalents $ 6,704,851
Current restricted cash and cash equivalents 724,248
Restricted cash and cash equivalents 4,123,270
Total cash and cash equivalents and investments $ 11,552,369
General Employees’ Pension Trust Fund
Salem Trust Company periodically holds uninvested cash in its capacity as custodian for the
Plan. These funds exist temporarily as cash in the process of collection from the sale of securities
and for the payments of benefits and expenses. The pension plan’s policy for the allocation of
invested assets is established by the Plan’s Board of Trustees (BOT) which pursues an
investment strategy that reduces risk through a prudent diversification of the portfolio across a
selection of distinct asset classes. The policy discourages the use of cash equivalents, except for
liquidity purposes and refrains from shifting asset class allocations over short time spans.
Investment management fees are calculated quarterly as a percentage of the fair market value of
the Plan’s managed assets, where applicable. The plan uses mutual funds as the investment
vehicle for fixed income, international equity and domestic equity investments for further
diversification. These investments are recommended and monitored by the investment
performance monitor.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
25
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
General Employees’ Pension Trust Fund (Continued)
The Plan’s Investment Policy allows the following investments:
1. Annuity and life insurance contracts with life insurance companies in amounts
sufficient to provide, in whole or in part, the benefits to which all of the Members in
the Plan shall be entitled under the provisions of the Plan and pay the initial and
subsequent premium thereon.
2. Time or savings accounts of a national bank, a state bank insured by the Bank
Insurance Fund or a savings/building and loan association insured by the Savings
Association Insurance Fund which is administered by the Federal Deposit
Insurance Corporation or a state or federal chartered credit union whose share
accounts are insured by the National Credit Union Share Insurance Fund.
3. Obligations of the United States or obligations guaranteed as to principal and
interest by the government of the United States or by an agency of the government
of the United States.
4. Stocks, commingled or mutual funds, bonds or other evidences of
indebtedness, provided that:
(a) Except as provided in subparagraph (b), all individually held securities and all
securities in a commingled or mutual fund must be issued or guaranteed by a
corporation organized under the laws of the United States, and state or
organized territory of the United States, or the District of Columbia.
(b) Up to 25% of the assets of the Fund may be invested in foreign
securities.
(c) The BOT shall not invest more than 5% of its assets in the common stock,
capital stock, or convertible securities of any one issuing company, nor shall
the aggregate investment in any one issuing company exceed 5% of the
outstanding capital stock of that company.
5. Equities:
(a) Must be traded on a national exchange or electronic network; and
(b) Not more than 5% of the Plan's assets, at the time of purchase, shall be
invested in the common stock, capital stock or convertible stock of any one
issuing company, nor shall the aggregate investment in any one issuing
company exceed 5% of the outstanding capital stock of the company; and
(c) All individually held securities, except foreign securities which are limited to
15% of the market value of the assets, and all securities in a commingled or
mutual fund must be issued or guaranteed by a corporation organized under
the laws of the United States, any state or organized territory of the United
States, or the District of Columbia.
(d) Commingled funds issued by national or state banks.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
26
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
General Employees’ Pension Trust Fund (Continued)
6. Fixed Income:
(a) 85% of the fixed income investments shall have a minimum rating of
investment grade or higher as reported by a major credit rating service such as
Standard and Poor’s with a rating of AAA to BBB-; and
(b) The value of bonds issued by any single corporation shall not exceed 3% of the
total fund; and
7. Money Market:
(a) The money market fund or STIF options provided by the Plan's Custodian; and
(b) Have a minimum rating of A1/P1, or its equivalent, by a major credit rating
service such as Standard and Poor’s.
8. Pooled Funds:
Investments made by the Board may include pooled funds. For purposes of this
policy pooled funds may include, but are not limited to, mutual funds, commingled
funds, exchange-traded funds, and real estate limited partnerships. Pooled funds
may be governed by separate documents which may include investments not
expressly permitted in this Investment Policy Statement. In the event of investment
by the Plan into a pooled fund, the prospectus or governing policy of that pooled
fund, as updated from time to time, shall be treated as an addendum to this
Investment Policy Statement. The Investment Consultant shall periodically review
with the Board any material changes in the prospectus or governing policy of a
pooled fund.
Investments in corporate common stock and convertible bonds shall not exceed 70% of the
market value of plan assets. Foreign investments are not to exceed 15% of the market value of
the assets.
Temporary investment funds held by the custodian in a money market fund are classified as cash
equivalents within the investment account.
The Plan carried no particular security investment that individually represented 5% or more of
the Plan’s net assets available for benefits as of September 30, 2022. Investments not evidenced
by securities that exist in physical or book-entry form include investments in mutual funds,
domestic investment funds or a commingled pooled trust fund. The Plan’s independently
managed investments are segregated into a separate account. The investment manager is
monitored by the Board of Trustees and an investment performance monitor. The Plan has no
instrument that, in whole or in part, is accounted for as a derivative instrument under GASB
statement No. 53, Accounting and Financial Reporting for Derivative Instruments during the
current year.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
27
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
General Employees’ Pension Trust Fund (Continued)
The Plan invests in mortgage-backed securities representing interests in pools of mortgage loans
as part of its interest rate risk management strategy. The mortgage-backed securities are not used
to leverage investments in fixed income portfolios. The mortgage-backed securities held by the
Plan are guaranteed by federally sponsored agencies such as the Government National Mortgage
Association. These investments are inside of the fixed income open-end mutual fund that the
plan holds.
The Plan invests in a variety of investment vehicles. Investments in general are exposed to
various risks, such as interest rate, credit, and overall volatility risk. Due to the level of risk
associated with certain investments, it is reasonably possible that changes in the values of
investments will occur in the near term and such changes could materially affect the amounts
reported in the statement of fiduciary net position.
For a more detailed and comprehensive list of available investments, the Investment Policy
Statement, as approved by the Board of Trustees, should be referenced. The gain or loss on
financial instruments is recognized in the changes in net position as part of investment income.
The following the historical cost and fair value as of September 30, 2022:
2022
Historical Fair
Cost Value
Money Market Mutual Funds $ 43,719 $ 43,719
Mutual Funds – Domestic Equity 3,402,105 4,883,915
Mutual Funds – International Equity 933,036 778,331
Mutual Funds - Fixed Income 4,553,693 3,888,825
$ 8,932,553 $ 9,594,790
The money market mutual funds consist of investments with financial institutions in open end,
institutional, money market funds complying with Securities and Exchange Commission (SEC)
Rule 2a7. Rule 2a7 allows SEC registered mutual funds to use amortized cost rather than fair
value to report net assets used to compute share prices if certain conditions are met. Those
conditions include restrictions on the types of investments held, restrictions on the term-to-
maturity of individual investments and the dollar-weighted average of the portfolio, requirements
for portfolio diversification, and requirements for divestiture considerations in the event of
security downgrades and defaults, and required actions if the fair value of the portfolio deviates
from amortized cost by a specified amount. Money market mutual funds are exempt from the
GASB 72 fair value hierarchy disclosures and are recorded as cash and cash equivalents on the
Statement of Fiduciary Net Position.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
28
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
General Employees’ Pension Trust Fund (Continued)
Investment Measurement at Fair Value
The Plan categorizes its investments according to the fair value hierarchy established GASB
Statement No. 72, Fair Value Measurement and Application. The hierarchy is based on valuation
inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted prices in
active markets for identical assets; Level 2 inputs are significant other observable inputs to
include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
The Plan categorizes its fair value measurement within the fair value hierarchy established by
generally accepted accounting principles. The Plan has the following fair value measurements as
of September 30, 2022:
Fair Value Measurement
Balance Level 1 Level 2 Level 3
Investments by fair value level
Mutual Funds – Domestic Equity $ 4,883,915 $ 4,883,915 $ $
Mutual Funds – International Equity 778,331 778,331
Mutual Funds - Fixed Income 3,888,825 3,888,825
$ 9,551,071 $ 9,551,071 $ $
Credit risk – Credit risk is the risk that an issuer or other counter party to an investment will not
fulfill its obligations. Credit risk does not apply to the Plan’s investments at this time.
Interest rate risk – Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks.
At September 30, 2022, the fixed income mutual fund was invested in high quality bonds and other
fixed income securities including U.S. Government obligations, mortgage and asset-backed
securities, corporate and municipal bonds, collateralized mortgage obligations, short-term
instruments, and the other investments A rated by Standard & Poor’s, Moody’s Investor Services or
Fitch. To a lesser extent the fund may also invest in fixed income securities rated Baa or lower.
This fund had an effective duration of 5.5 years of September 30, 2022.
Concentrations of credit risk – Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. Not more than five (5) percent of the Plan’s
assets shall be invested in the common stock or capital stock of any one issuing company.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
29
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
General Employees’ Pension Trust Fund (Continued)
Investment Measurement at Fair Value (Continued)
Investing in Foreign Markets – Investing in foreign markets may involve special risks and
considerations not typically associated with investing in companies in the United States of
America. These risks include revaluation of currencies, high rates of inflation, repatriation
restrictions on income and capital, and future adverse political, social, and economic
developments. Moreover, securities of foreign governments may be less liquid, subject to
delayed settlements, taxation on realized or unrealized gains, and their prices are more volatile
than those of comparable securities in U.S. companies.
NOTE 3 – INVENTORY
Inventory was comprised of the following at September 30, 2022:
Chemicals $ 31,340
Parts and supplies 586,212
Total inventory $ 617,552
NOTE 4 – RESTRICTED ASSETS
Restricted assets consist of the following accounts as of September 30, 2022:
Renewal, replacement & improvement $ 565,381
Capital connection water 529,803
Capital connection wastewater and treatment plant 890,453
Fire hydrant 298,542
Total restricted for capital projects 2,284,179
Debt service 499,732
Rate stabilization 1,339,359
Customer deposits 724,248
Total restricted assets $ 4,847,518
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
30
NOTE 5 – UNRESTRICTED NET POSITION
Unrestricted net position consists of the following as of September 30, 2022:
Designated:
Capital improvement project $ 1,491,544
Operating reserve 1,313,321
Emergency funding 658,236
Total designated 3,463,101
Undesignated 5,174,889
Total unrestricted net position $ 8,637,990
NOTE 6 – CAPITAL ASSETS
Beginning
Balance Additions Deletions
Ending
Balance
Capital assets not being depreciated
Land $ 2,777,823 $ 129,038 $ $ 2,906,861
Construction in progress 2,807,392 3,448,426 (961,167) 5,294,651
Total capital assets not being
depreciated 5,585,215 3,577,464 (961,167) 8,201,512
Capital assets being depreciated
Buildings 1,108,764 1,108,764
Equipment 4,385,822 12,496 4,398,318
Land lease 481,605 481,605
Distribution and
collection plant 100,495,496 1,103,339 101,598,835
Total capital assets being
depreciated 106,471,687 1,115,835 107,587,522
Less accumulated depreciation
Buildings (656,171) (40,498) (696,669)
Equipment (3,507,239) (186,226) (3,693,465)
Land lease (329,204) (12,600) (341,804)
Distribution and
collection plan (44,390,719) (2,449,260) (46,839,979)
Total accumulated
depreciation (48,883,333) (2,688,584) (51,571,917)
Total capital assets being
depreciated, net 57,588,354 (1,572,749) 56,015,605
Total capital assets, net $ 63,173,569 $ 2,004,715 $(961,167) $ 64,217,117
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
31
NOTE 7 – LONG-TERM LIABILITIES
Loans Payable from Direct Borrowings and Direct Placements
Pledged Revenues
Net Revenues from operating the System, Pledged Capital Connection Charges, Special
Assessments, and earnings and investment income are pledged for the payment of the Capital
Improvement Refunding Revenue Notes, Series 2020 and the Loan Agreement WW615100.
Capital Improvement Refunding Revenue Notes, Series 2020
On April 1, 2020, the Authority issued $16,390,000 Capital Improvement Refunding Revenue
Notes, Series 2020 with Truist Bank (the Senior Debt). The notes were issued to provide funds
to refund the Capital Improvement Refunding Revenue Note, Series 2017.
The Series 2020 Notes are comprised of $7,340,000 Series 2020A and $9,050,000 Series 2020B
as follows:
Mandatory
Original Face Redemption
Series Amount Interest Rate Beginning October 1 Maturity
2020A $7,340,000 1.79% 2020 October 1, 2025
2020B 9,050,000 2.05% 2020 October 1, 2030
Principal and interest is to be paid semiannually on each April 1 and October 1, through October
1, 2030. As of September 30, 2022, the balance due on Series 2020A and 2020B is $4,095,000
and $8,665,000, respectively.
The Authority is to 1) establish rates and collect fees to provide Net Revenues of at least 1.10
times the Annual Debt Service Requirement for the Notes, 2) maintain a Debt Service Account
that is funded monthly to fund semi-annual Debt Service Payments, and 3) maintain a Renewal
Replacement and Improvement Account of 5% of Gross Revenues of the preceding fiscal year.
In the event of default in the payment of interest or principal of any of the bonds or any other
event of default and such default is not cured in sixty days, any Holder shall be entitled to the
appointment of a receiver to manage the System in an appropriate judicial proceeding.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
32
NOTE 7 – LONG-TERM LIABILITIES (Continued)
Loans Payable from Direct Borrowings and Direct Placements (Continued)
Loan Agreement WW615100
The Authority was approved for a construction loan of $10,210,183, with an interest rate of
1.86%, by the Florida Department of Environmental Protection (the Department) under the State
Revolving Fund Loan Program (The Junior Debt). The amount outstanding as of September 30,
2022, was $4,162,604. According to the loan agreement, 40 semi-annual payments of principal
and interest commenced on September 15, 2009, in the amount of $341,431. This loan is junior,
inferior, and subordinate in all regards in right of payment and security to the Capital
Improvement Refunding Revenue Note, Series 2020A and Capital Improvement Refunding
Revenue Note, Series 2020B.
The Authority is to 1) establish rates and collect fees to provide Net Revenues of at least 1.15
times the Annual Debt Service Requirement for the Notes, 2) maintain a Debt Service Account
that is funded monthly to fund semi-annual Debt Service Payments, and 3) satisfy the debt
service coverage requirements of the Senior Debt.
Upon an event of default and subject to the rights of others having prior liens on the Pledged
Revenues the Department may (1) apply to a court of competent jurisdiction, cause to appoint a
receiver to manage the System, or (2) may accelerate the repayment schedule or increase the
interest rate on the unpaid principal of the loan.
Debt service requirements to amortize long term debt at September 30, 2022 are as follows:
Year Ended Principal Interest Total
2023 $ 2,113,253 $ 318,753 $ 2,432,006
2024 2,153,620 279,859 2,433,479
2025 2,212,198 240,170 2,452,368
2026 2,182,993 198,899 2,381,892
2027 2,235,008 155,108 2,390,116
2028-2030 6,025,532 200,647 6,226,179
Total $ 16,922,604 $ 1,393,436 $ 18,316,040
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
33
NOTE 7 – LONG-TERM LIABILITIES (Continued)
Changes in Long-Term Liabilities
A summary of changes in long-term liabilities is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One year
Notes payable $ 18,995,700 $ $ (2,073,096) $16,922,604 $ 2,113,253
Compensated absences 264,661 148,568 (154,628) 258,601 77,580
Net pension liability (1) (1,904,107) 2,779,866 875,759
Total OPEB liability 45,523 172,652 218,175
Total long-term
liabilities $ 17,401,777 $ 3,101,086 $ (2,227,724) $18,275,139 $ 2,190,833
(1) This was a net pension asset at October 1, 2021.
Interest Expense
Interest expense for the year ended September 30, 2022 was $472,215, which consisted of
$115,824 amortization of deferred costs from the issuance of bonds in prior years and interest costs
incurred of $356,391. Total interest paid during the year was $356,854.
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM
General Information
The Employees’ Retirement System of the Okeechobee Utility Authority (the System) is a
single-employer, defined benefit contributory pension trust established by the Authority in
Resolution 2016-03 for the benefit of the Authority employees. The System is under the
supervision of a five-member local independent board of trustees, two of whom shall be a legal
resident within the Authority’s jurisdictional boundaries, who shall be appointed by the
Okeechobee Utility Authority Board; two of whom shall be Employee Members employed by
the Authority and elected by Member employees; and one of whom shall be the Executive
Director of the Authority or his designee. Any changes to the plan requires approval by the
Board of the Authority.
The System issues a publicly available financial report that includes financial statements, ten-
year historical trend information, and other required supplementary information. That report
may be obtained by writing to the attention of the Assistant Finance Director, Okeechobee
Utility Authority, 100 SW. 5th Avenue, Okeechobee, FL 34974-4221.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
34
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
Basis of Accounting
The retirement system is reported on the accrual basis of accounting. Plan members
contributions are recognized as revenues in the period that the contributions are due. Employer
contributions are recognized when due and the employer has made a formal commitment to
provide the contributions. Benefits and refunds are recognized when due and payable in
accordance with the terms of the plan. The plan’s fiduciary net position has been determined on
the same basis used by the pension plan. Investments are reported at fair value
Plan Description
The pension plan provides retirement, death and disability benefits for its participants. Each
person employed by the Authority as a full-time employee becomes a member of the Plan as a
condition of their employment except that the Executive Director of the Utility Authority, may
opt out of the Plan within 60 days of employment. All employees are eligible to participate on
the date of employment following attainment of age 18. Participation is mandatory. Normal
retirement is provided for at age 65 and 5 years of service, or at 30 years of service regardless of
age. The benefit is calculated at 2.1% of average monthly earnings times the last 5 years of
continuous service with the employer. Benefits are payable by monthly annuity for 10 years
certain and life thereafter with other options available. Early retirement is provided for at age 55
and 10 years of participation. Death and disability benefits are also available through the plans.
The early retirement reduction factor is 2% per year.
Upon termination of employment, with less than 5 years of service, the plan refunds accumulated
employee contributions. After 5 years of service, the pension benefit is accrued to date of
termination and payable at normal retirement age if employee contributions are left in the fund.
The Plan contains a deferred retirement option plan (DROP) whereupon the employee could
retire from the pension plan but continue employment with the Utility Authority for an additional
maximum period of up to five years. The retirement benefit is immediately calculated and the
monthly benefit is allocated to the DROP account. An election is made to either earn interest at
the rate of 6.5% per annum or credited or debited with an investment return or loss
approximating the other assets in the fund. Once a participant elects this option, he is no longer
eligible for disability or pre-retirement benefits. At September 30, 2022, there was $81,378 in the
DROP, this amount is included in both the Total Pension Liability and the Plan Fiduciary Net
Position. The Plan’s guidelines for the DROP are designed to adhere to IRS regulations.
Additional information about the DROP can be obtained from the ordinance.
The Plan is administered by its Board of Trustees. Any changes to benefit provisions requires
approval by the Board of the Authority.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
35
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
Members of the plan consisted of the following at September 30, 2021:
Retired Plan Members or Beneficiaries
currently receiving benefits 24
Inactive Plan Members entitled to but
not yet receiving benefits 3
Drop Participants -
Active Plan Members 49
Total 76
Contributions
Contributions are made in accordance with applicable Florida Statutes and meeting the
actuarially determined contribution requirements as based on the benefit structure established
within the Plan as approved by the plan sponsor. The employer is required to contribute an
amount equal to the difference between the normal cost, as calculated for the plan year from the
applicable actuarial valuation, less the member contributions for the current year. The Authority
is required to fund the plan according to any contribution deficit as determined by actuarial
valuation for the plan beyond the contributions by employees and the regular employer
contributions by the Okeechobee Utility Authority. After applying the allocable prepaid
contribution from the beginning of the year, the employer contribution was sufficient to meet the
required annual contribution, prepaid employer contributions.
The Utility Authority funded the pension plan at the rate of 9.1% of covered payroll for plan
participants based on the October 1, 2020 actuarial valuation. Employee contributions are at the
rate of 6% of payroll.
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 funding
policy for the Plan is to make an actuarially determined pension contribution in an amount, such
that when combined with the participants’ contributions, all participants’ benefits will be fully
provided for by the time they attain retirement age.
Investments Concentrations. The plan did not hold investments in any one organization that
represents 5 percent or more of the Pension Plan’s fiduciary net position.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
36
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of October 1, 2021
updated to September 30, 2022, using the following actuarial assumptions.
Inflation 2.5 %
Salary increases From 7.5% to 4.25%, based on the age of the employee
Retirement rate 100% at 30 years of service; 80% when eligible for early
retirement, 60% one year later, 100% two years later; participants
eligible for early retirement are assumed to retire at the rate of 5%
per year.
Withdrawal rate From 20% to 5%, based on the age of the employee
Mortality For healthy participants PUB-2010 Headcount Weighted General
Below Median Employee Mortality Table, separate rates for males
and females, set back 1 year for males, with fully generational
mortality improvements projected to each future decrement date
with Scale MP-2018.
For disabled participants, PUB-2010 Headcount Weighted General
Disabled Retiree Mortality Table, separate rates for males and
females, both set forward 3 years, without projected mortality
improvements
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expenses and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation percentage and by
adding expected inflation.
Best estimates of arithmetic real rates of return for each major asset class included the pension
plan’s target asset allocation as of September 30, 2022, are summarized in the following table:
Long-Term
Target Real Rate of
Asset Class Allocation Return*
Domestic Equity 50% 7.5%
International Equity 10% 8.5%
Fixed Income 40% 2.5%
Cash Equivalents 0% 0.0%
Total 100%
*Net of long-term inflation assumption of 2.5%
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
37
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
Rate of Return.
For the year ended September 30, 2022, the annual money-weighted rate of return on Pension
Plan investments, net of pension plan investment expense, was -19.73 percent The money-
weighted rate of return expresses investment performance, net of investment expense, adjusted
for the changing amounts actually invested.
Discount Rate
The discount rate used to measure the total pension liability was 6.75%. The projection of cash
flows used to determine the discount rate assumed that plan member contributions will be made
at the current contribution rate and that sponsor contributions will be made at rates equal to the
difference between actuarially determined contribution rates and the member rate. Based on
those assumptions, the pension plans’ fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the total pension liability.
The components of the net pension liability at September 30, 2022, were as follows:
Total Fiduciary Net
Pension Net Pension
Description
Liability
(a)
Position
(b)
Liability
(a)-(b)
Balances at September 30, 2021 $ 10,244,114 $ 12,148,221 $ (1,904,107)
Changes due to:
Service cost 208,256 208,256
Interest 678,774 678,774
Differences between expected
and actual experience 139,219 139,219
Change of Assumptions (303,559) (303,559)
Employer contributions 191,107 (191,107)
Employee contributions 126,005 (126,005)
Benefit payments and refunds (464,235) (464,235)
Net investment income (2,314,490) 2,314,490
Administrative expenses (59,798) 59,798
Total changes 258,455 (2,521,411) (2,779,866)
Balances at September 30, 2022 $ 10,502,569 $ 9,626,810 $ 875,759
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
38
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
The change in assumptions was due to updating investment return, salary increase factors,
withdrawal rates and retirement rates.
The Plan fiduciary net position was 91.66% of the total pension liability as of
September 30, 2022.
Sensitivity of the Net Position Liability to Changes in the Discount Rate
The following represents the Authority’s net pension liability calculated using the discount rate
of 6.75%, as well as what the Authority’s net pension liability would be if it were calculated
using a discount rate that is one percentage point lower (5.75%) or one percentage point higher
(7.75%) than the current rate:
1% Decrease Current Rate 1% Increase
5.75% 6.75% 7.75%
Net pension liability $ 2,246,491 $ 875,759 $ (253,565)
Pension expense and deferred outflows and inflows of resources
For the fiscal year ended September 30, 2022, the Authority recognized a pension expense of
$254,136. In addition, the Authority reported deferred outflows of resources and deferred
inflows of resources related to the Plan from the following sources:
Deferred Deferred
Outflows Inflows
Description of Resources of Resources
Difference between expected and actual
experience $ 161,876 $ 214,791
Change of assumptions 21,372 365,127
Net difference between projected and actual
earnings on plan investments 1,610,571
Total $ 1,793,819 $ 579,918
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
39
NOTE 8 – EMPLOYEE RETIREMENT SYSTEM (Continued)
The amounts reported as deferred outflows of resources and deferred inflows of resources related
to the plan will be recognized in pension expense as follows:
Year ended September 30: Amount
2021 $ 256,690
2022 177,056
2023 252,229
2024 554,943
2025 (27,017)
Thereafter
$ 1,213,901
Payables to the Pension Plan
At September 30, 2022, the Authority had a payable of $21,396 for outstanding contributions to
the Pension Plan for the fiscal year ended September 30, 2022.
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (OPEB)
General Information about the OPEB Plan
Effective October 1, 2017, the Authority implemented Governmental Accounting Standards
Board Statement 75 (GASB 75), Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions. Retirees of the Authority pay an amount equal to the actual
premium for health insurance charged by the carrier. The premium charged includes an implied
subsidy, as the amount charged for all participants (active employee or retiree) is the same,
regardless of age. Under GASB 75, an implied subsidy is considered other post-employment
benefits (OPEB).
The following describes the Authority’s OPEB Provisions:
Plan Description
The Authority provides a single employer defined benefit health care plan to all of its employees
and the plan is administered by the Authority. The plan has no assets and does not issue a
separate financial report.
Benefits Provided
The plan allows its employees and their beneficiaries, to continue to obtain health and dental
benefits upon retirement. Normal retirement is provided for at age 65 and 5 years of service, or
at 30 years of service regardless of age. The benefits of the plan are in accordance with Florida
Statutes, which are the legal authority for the plan. The plan has no assets and does not issue a
separate financial report.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
40
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)
Employees Covered by Benefit Terms
At September 30, 2022, the following employees were covered by benefit terms:
Participants
Active employees 53
Inactive employees currently receiving benefits 5
Inactive employees entitled to but not receiving benefits -
Total 58
Contribution Requirements: The Authority does not make direct contributions to the plan on
behalf of retirees. Retirees and their beneficiaries pay the same group health rates as active
employees. However, the Authority’s actuaries, in their actuarial valuation, calculate an offset to
the cost of these benefits as an employer contribution, based upon an implicit rate subsidy. This
offset equals the total annual age-adjusted costs paid by the Authority, or its active employees,
for coverage of the retirees and their dependents net of the retiree’s own payments for the year.
Total OPEB Liability
The Authority’s total OPEB liability of $218,175 was measured as of September 30, 2022, and
was determined by the actuarial valuation as of that date.
Actuarial Assumptions and Methods
The total OPEB liability was determined using the following actuarial assumptions and other
methods:
Valuation Date: September 30, 2022
Discount Rate: 3.35% per annum
Average Retirement Age 62
Age adjustment factor 2.079211
Health Care Trend Rate: Medical – 4.70% initially trending to 4.20% in 10 years
Pharmacy – 5.20% initially trending to 4.20% in 10 years
Dental – 3.50% initially trending to 3.00% in 10 years
Vision – 3.00%
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
41
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)
Actuarial Assumptions and Methods (Continued)
Actuarial Cost Method: Entry Age Normal
Plan Participation Percentage: 20%
Mortality Rates: Pub-2010 Public Retirement Plans Mortality Tables,
with mortality improvement projected for 10 years.
The valuation was prepared using the Alternate Method in accordance with GASB 75.
Discount Rate
The Authority does not have a dedicated Trust to pay retiree healthcare benefits. Per GASB 75,
the discount rate is a yield or index rate for 20-year, tax-exempt municipal bonds. As a result, the
calculation used a rate of 2.27%.
.
Changes in the Total OPEB Liability
Total OPEB
Liability
Balance at September 30, 2021 $ 45,523
Changes for the Year:
Service Cost 1,938
Interest Cost 1,077
Changes of Assumptions and Other Inputs 191,267
Differences Between Expected and
Actual Experience
(21,630)
Benefit Payments
Net Change in Total OPEB Liability 172,652
Balance at September 30, 2022 $ 218,175
Changes in Assumptions
The discount rate was 2.27% at 10/1/21 and 3.35% at 9/30/22. Also, 1the average retirement age
went from 62 to 65 and the plan participation percentage went from 18% to 20%.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the Authority, and the Authority’s total OPEB
liability if it were calculated using a discount rate that is 1-percentage-point lower or 1-
percentage-point higher (versus the current discount rate):
1.0% Decrease Discount Rate 1.0% Increase
(2.35%) (3.35%) (4.35%)
Total OPEB Liability $ 238,079 $ 218,175 $ 200,945
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
42
NOTE 9 – OTHERPOST EMPLOYMENT BENEFITS (OPEB) (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Trend Rates
The following presents the total OPEB liability of the Authority, and the Authority’s total OPEB
liability if it were calculated using healthcare cost trends that are 1-percentage-point lower or 1-
percentage-point higher (versus the current healthcare cost trend rates):
Healthcare cost
1.0% Decrease Trend Rates 1.0% Increase
Total OPEB Liability $ 198,245 $ 218,175 $ 241,171
OPEB Expense
For the year ended September 30, 2022, the Authority recognized OPEB expense of $172,652.
NOTE 10 – CONTINGENCIES
The Authority is involved in various litigations and claims arising in the course of operations. It
is the opinion of legal counsel that the likelihood of unfavorable outcomes and the amounts of
potential losses cannot be reasonably determined at this time. Accordingly, no provision for any
liability, that may result, has been made in the accompanying financial statements.
In the opinion of management, no present claims exist that would, in the event of an adverse
resolution, result in liabilities in excess of the Authority’s insurance coverage.
NOTE 11 – COMMITMENTS
As of September 30, 2022, the Authority had commitments on outstanding engineering and
construction contracts for improvements to the system of approximately $8,053,000. Subsequent
to September 30, 2022, the Authority entered into a contract with Hinterland Group for
$11,954,104 for the SWSA Project 2.
NOTE 12 – RISK MANAGEMENT
The Okeechobee Utility Authority is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. During the 2022 fiscal year, coverage was maintained via membership renewal with
Preferred Governmental Insurance Trust (“PGIT”), a public entity risk pool. The Okeechobee
Utility Authority pays an annual premium to PGIT for the following coverage: property and
inland marine, general liability, automobile, crime, public official’s liability, employment
practices liability, and worker’s compensation. The PGIT purchases excess of loss insurance
policies. The excess of loss insurance policies attaches at $100,000 per occurrence except for
property insurance which is $25,000 per occurrence. Since the PGIT purchases excess of loss
insurance, the pool has not billed and does not plan to bill members for additional assessments.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
43
NOTE 12 – RISK MANAGEMENT (Continued)
As of September 30, 2022, the Authority’s management is of the opinion that the PGIT is able to
pay claims incurred to date and that the Authority will not be liable to pay any submitted claims.
The Okeechobee Utility Authority continues to carry commercial insurance for the following
risks: pollution liability, health, life, and disability. Settled claims resulting from these risks
have not exceeded commercial insurance coverage in any of the past three fiscal years.
Florida Statutes limit the Authority’s maximum loss for most liability claims to $200,000 per
person and $300,000 per occurrence under the Doctrine of Sovereign Immunity. However, under
certain circumstances, a plaintiff can seek to recover damages in excess of statutory limits by
introducing a claims bill to the Florida Legislature. The limits addressed in Florida Statutes do
not apply to claims filed in Federal courts.
NOTE 13– NEW ACCOUNTING STANDARDS
The Authority implemented the following Governmental Accounting Standards Board (GASB)
Statements during the fiscal year ended September 30, 2022:
GASB Statement No. 87, Leases. This Statement will increase the usefulness of governments’
financial statements by requiring recognition of certain lease assets and liabilities for leases that
previously were classified as operating leases and recognized as inflows of resources or outflows
of resources based on the payment provisions of the contract. It establishes a single model for
lease accounting that is based on the foundational principle that leases are financings of the right
to use an underlying asset. This Statement did not have a significant impact for the fiscal year
ending September 30, 2022.
Recently Issued Accounting Pronouncements
Below is a brief description and effective date of new accounting standards that could have a
significant impact on the Authority’s financial statements. Management is currently evaluating
the impact of the adoption of these statements on the Authority’s financial statements.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This
Statement provides guidance on the accounting and financial reporting for subscription-based
information technology arrangements (SBITAs) for government end users (governments). This
Statement is effective for the fiscal year ending September 30, 2023.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2022
44
NOTE 13 – NEW ACCOUNTING STANDARDS (Continued)
Recently Issued Accounting Pronouncements (Continued)
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections.
The requirements of this Statement will improve the clarity of the accounting and financial
reporting requirements for accounting changes and error corrections, which will result in greater
consistency in application in practice. In turn, more understandable, reliable, relevant, consistent,
and comparable information will be provided to financial statement users for making decisions
or assessing accountability. In addition, the display and note disclosure requirements will result
in more consistent, decision useful, understandable, and comprehensive information for users
about accounting changes and error corrections. The requirements of this Statement are effective
for accounting changes and error corrections made in fiscal years ending September 30, 2024,
and all reporting periods thereafter.
In June 2022, the GASB issued Statement No. 101, Compensated Absences. The unified
recognition and measurement model in this Statement will result in a liability for compensated
absences that more appropriately reflects when a government incurs an obligation. In addition,
the model can be applied consistently to any type of compensated absence and will eliminate
potential comparability issues between governments that offer different types of leave. The
model also will result in a more robust estimate of the amount of compensated absences that a
government will pay or settle, which will enhance the relevance and reliability of information
about the liability for compensated absences. The requirements of this Statement are effective for
fiscal years ending September 30, 2025, and all reporting periods thereafter.
2018 2019 2020 2021 2022
Service cost 2,113$ 3,493$ 4,304$ 1,959$ 1,938$
Interest on total OPEB liability 1,636 3,107 2,436 1,247 1,077
Effect of economic/demographic
gains or losses 26,276 (22,138) (31,610) (8,767) (21,630)
Effect of assumption changes (11,009) 4,796 4,176 419 191,267
Net change in total OPEB Liability 19,016 (10,742) (20,694) (5,142) 172,652
Total OPEB liability - beginning 63,085 82,101 71,359 50,665 45,523
Total OPEB liability - ending 82,101$ 71,359$ 50,665$ 45,523$ 218,175$
Covered employee payroll 2,339,518$ 2,384,400$ 2,565,609$ 2,653,458$ 2,721,351$
Total OPEB liability as a percentage of 3.51%2.99%1.97%1.72%8.02%
covered employee payroll
Change of Assumptions
Discount rate (2.51% at 10/1/17)3.63%3.22%2.37%2.27%3.35%
In 2022 the average retirement age went from 62 to 65 and the plan participation percentage went from 18% to 20%.
There are no assets accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101
to pay related benefits for the OPEB plan.
Thisscheduleisintendedtoshowinformationfor10years.However,untilafull10-yeartrendiscompiled,
information will be presented for those years for which information is available.
Last Ten Fiscal Years
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Schedule of Changes in the Total OPEB Liability
45
2017 2018 2019 2020 2021 2022
Total pension liability:
Service cost 285,610$ 282,926$ 269,093$ 285,901$ 296,197$ 208,256$
Interest 723,860 595,025 616,927 655,548 682,179 678,774
Differences between expected and
actual experience 181,813 (383,010) (36,680) (51,853) 139,219
Change of assumptions 109,828 (171,663) (303,559)
Benefit payments, including
refunds of employee contributions (206,413) (319,132) (300,238) (328,601) (366,966) (464,235)
Net change in total pension liability 912,885 740,632 202,772 576,168 387,894 258,455
Total pension liability - beginning 7,423,763 8,336,648 9,077,280 9,280,052 9,856,220 10,244,114
Total pension liability - ending (a)8,336,648$ 9,077,280$ 9,280,052$ 9,856,220$ 10,244,114$ 10,502,569$
Plan fiduciary net position
Contributions - employer 287,362$ 325,097$ 336,605$ 317,039$ 286,486$ 191,107$
Contributions - employees 130,765 129,178 128,067 133,961 138,622 126,005
Net investment income 831,485 703,480 327,727 1,067,073 1,998,482 (2,314,490)
Benefit payments, including
refunds of employee contributions (206,413) (319,132) (300,238) (328,601) (366,966) (464,235)
Administrative expenses (52,151) (72,819) (59,018) (52,827) (50,818) (59,798)
Net change in plan fiduciary net position 991,048 765,804 433,143 1,136,645 2,005,806 (2,521,411)
Plan fiduciary net position - beginning 6,815,775 7,806,823 8,572,627 9,005,770 10,142,415 12,148,221
Plan fiduciary net position - ending (b)7,806,823$ 8,572,627$ 9,005,770$ 10,142,415$ 12,148,221$ 9,626,810$
Net pension liability (asset) (a) - (b)529,825$ 504,653$ 274,282$ (286,195)$ (1,904,107)$ 875,759$
Plan fiduciary net position as a percentage
of the total pension liability 93.64%94.44%97.04%102.90%118.59%91.66%
Covered payroll 2,179,417$ 2,152,963$ 2,134,469$ 2,232,670$ 2,310,371$ 2,100,081$
Net pension liability (asset) as a percentage of
covered payroll 24.31%23.44%12.85%(12.82)%(82.42)%41.70%
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, a cost-sharing multiple-employer defined benefit plan. Effective October 1, 2016, the Authority
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single-employer
defined benefit plan with the same contribution and benefit provisions as the prior plan.
Change of Assumptions
For the year ending September 30, 2017, the assumed rates of mortality were changed.
For the year ending September 30, 2021, the assumed rates of mortality were changed.
For the year ending September 30, 2022, the investment return, salary increase factors, withdrawal rates and retirement rates were changed.
Thisscheduleisintendedtoshowinformationfor10years.However,untilafull10-yeartrendiscompiled,
information will be presented for those years for which information is available.
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Employees' Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios
Last Ten Fiscal Years
46
Schedule of Employer Contributions
Fiscal Year Actuarially Contribution Authority's Actual Contribution
Ended Determined Actual Excess Covered as a Percentage of
September 30 Contribution Contribution (Deficiency)Payroll Covered Payroll
2017 303,157 287,362 *(15,795) *2,179,417 13.19%
2018 302,922 325,097 22,175 2,152,963 15.10%
2019 335,965 336,605 640 2,134,469 15.77%
2020 317,039 317,039 - 2,232,670 14.20%
2021 286,486 286,486 - 2,310,371 12.40%
2022 191,107 191,107 - 2,100,081 9.10%
* Excess contributions from previous years totaling $15,795 were applied to satisfy the full contribution requirement.
Schedule of Annual Money-Weighted Rate of Return, Net of Investment Expense
Fiscal Year
Ending
September 30
2017 10.83%
2018 8.11%
2019 3.21%
2020 11.53%
2021 18.77%
2022 (19.73%)
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authority'
Employees' Retirement System, a cost-sharing multiple-employer defined benefit plan. Effective October 1, 2016, the Authority
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single-employer
defined benefit plan with the same contribution and benefit provisions as the prior plan.
Thisscheduleisintendedtoshowinformationfor10years.However,untilafull10-yeartrendis
compiled, information will be presented for those years for which information is available.
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Last Ten Fiscal Years
47
Valuation Date October 1, 2020
Actuarial Cost Method Aggregate
Amortization Method N/A
Remaining Amortization Period N/A
Asset Valuation Method 4-year smoothed market
Inflation 2.50%
Salary Increases 6.00%
Cost of Living Adjustments None
Investment Rate of Return 7.00%
Retirement age 100% when first eligible for normal
retirement or DROP entry
Mortality For healthy participants during
employment, RP 2000
Combined Healthy Participant
Mortality Tables, with 50%
White Collar / 50% Blue
Collar Adjustment for males
and 100% White Collar for
females. Fully generational
mortality improvements
projected to each future
decrement date with Scale BB.
OKEECHOBEE UTILITY AUTHORITY
Notes to the Schedule of Contributions
September 30, 2022
ActuariallydeterminedcontributionratesarecalculatedasofSeptember30,twoyearspriortothe
endofthefiscalyearinwhichcontributionsarereported.Thecontributionsforthefiscalyear
endedSeptember30,2022,weredeterminedbytheactuarialvaluationasofOctober1,2020using
the methods and assumptions below.
48
OKEECHOBEE UTILITY AUTHORITY
Schedule of Revenues and Expenses
For the Fiscal Year Ended September 30, 2022
Water Wastewater Unallocated Total
OPERATING REVENUE
Water system charges for services 7,285,294$ $ $ 7,285,294$
Wastewater system charges for services 4,306,134 4,306,134
Penalties and late charges 124,598 124,598
Miscellaneous 129,026 129,026
Total operating revenues 7,285,294 4,306,134 253,624 11,845,052
OPERATING EXPENSES
Personnel Costs 558,909 593,197 2,757,915 3,910,021
Electricity 255,372 185,186 127,479 568,037
General Repair and Maintenance Expenses 102,368 115,182 662,528 880,078
Repair & Maintenance Expenses Equipment 49,897 82,164 22,639 154,700
Monitoring and Testing 7,683 22,789 30,472
Residual Disposal 75,256 75,256
Chemicals 587,050 77,751 70,976 735,777
Maintenance Supplies 11,802 8,486 52,723 73,011
Office Supplies 1,474 383 10,453 12,310
Miscellaneous 11,626 1,867 2,047 15,540
Administrative Costs 267,058 267,058
Accounting and Audit Fees 22,000 22,000
Legal Fees 85,026 85,026
Property, Liability and Casualty Insurance 350,377 350,377
Professional Services 96,180 96,180
Depreciation and amortization 1,689,794 998,790 2,688,584
Total operating expenses 3,275,975 2,161,051 4,527,401 9,964,427
OPERATING INCOME 4,009,319 2,145,083 (4,273,777) 1,880,625
NONOPERATING REVENUES (EXPENSES)
Interest revenue 29,488 29,488
Interest expense (472,215) (472,215)
Operating grants 44,987 44,987 44,987 44,987
Total nonoperating revenues (expenses)44,987 44,987 (397,740) (307,766)
INCOME BEFORE CAPITAL CONTRIBUTIONS 4,054,306$ 2,190,070$ (4,671,517)$ 1,572,859$
Unaudited
49
Reported
53
Not Applicable
2,721,351$
Not Applicable
Budget Expenditures
11,055,091 653,193
9,197,574 157,407
4,430,875 455,626
3,785,741 215,313
See Page 51
Not Applicable
Not Applicable
OKEECHOBEE UTILITY AUTHORITY
Information Required by Section 218.39(3)(c), Florida Statutes
For the Fiscal Year Ended September 30, 2022
Unaudited
ThemillagerateofadvaloremtaxesimposedbytheDistrictforfiscalyear
2022:
All compensation earned by or awarded to nonemployee independent
contractors,whetherpaidoraccrued,regardlessofcontingencyforfiscalyear
2022:
As required by Section 218.39(3)(c), Florida Statutes, the Authority reported:
Required Information
Thetotalnumberofdistrictemployeescompensatedinthelastpayperiodofthe
District's fiscal year 2022:
The total number of independent contractors to whom nonemployee
compensation was paid in the last month of the District's fiscal year 2022:
Allcompensationearnedbyorawardedtoemployees,whetherpaidoraccrued,
regardless of contingency for fiscal year 2022:
SW Section WW Service Area - Project 2
SW Section WW Service Area - Project 3
Pineridge Park Utility Improvement
SW 5th Avenue WW System
Therateofnon-advaloremspecialassessmentsimposedbytheDistrictfor
fiscal year 2022:
Eachconstructionprojectwithatotalcostofatleast$65,000approvedbythe
DistrictthatwasscheduledtobeginonorafterOctober1ofthefiscalyear2022,
together with the total expenditures for such project:
AbudgetvariancebasedonthebudgetadoptedunderSection189.016(4),
FloridaStatutes,beforethebeginningofthefiscalyear2022beingreportedif
theDistrictamendsafinaladoptedbudgetunderSection189.016(6),Florida
Statutes:
Project
50
OKEECHOBEE UTILITY AUTHORITY
Budgetary Schedule
For the Fiscal Year Ended September 30, 2022
Variance with
Final Budget
Original Final Postive
Budget Budget Actual (Negative)
OPERATING REVENUE
Water system charges for services 6,938,753$ 6,938,753$ 7,285,294$ 346,541$
Wastewater system charges for services 4,161,360 4,161,360 4,306,134 144,774
Penalties and late charges 128,863 128,863 124,598 (4,265)
Miscellaneous 42,324 42,324 129,026 86,702
Total operating revenues 11,271,300 11,271,300 11,845,052 573,752
OPERATING EXPENSES
Water services - labor 617,335 617,335 558,909 58,426
Water services - O & M 1,074,750 1,074,750 1,027,272 47,478
Wastewater services - labor 605,492 605,492 593,197 12,295
Wastewater services - O & M 533,610 533,610 569,064 (35,454)
Maintenance - labor 1,388,184 1,388,184 1,392,058 (3,874)
Maintenance - O & M 1,061,409 1,061,409 894,285 167,124
Meter reader - labor 246,761 246,761 237,953 8,808
Meter reader - O & M 30,780 30,780 32,203 (1,423)
Administrative and general - labor 1,248,633 1,248,633 1,127,904 120,729
Administrative and general - O & M 1,175,631 1,175,631 842,998 332,633
Depreciation and amortization 2,712,600 2,712,600 2,688,584 24,016
Total operating expenses 10,695,185 10,695,185 9,964,427 730,758
OPERATING INCOME 576,115 576,115 1,880,625 1,304,510
NONOPERATING REVENUES (EXPENSES)
Interest revenue 35,641 35,641 29,488 (6,153)
Interest expense (356,855) (356,855) (472,215) (115,360)
Operating grants 44,987 44,987
Total nonoperating revenues (expenses)(321,214) (321,214) (397,740) (76,526)
INCOME BEFORE CAPITAL CONTRIBUTIONS 254,901 254,901 1,482,885 1,227,984
CAPITAL CONTRIBUTIONS
Capital grants 2,700,665 2,700,665
Water capital connection fees 10,425 10,425 61,737 51,312
Wastewater capital connection fees 9,720 9,720 60,585 50,865
Developer contributions for capital projects 32,358 32,358
Total capital contributions 20,145 20,145 2,855,345 2,835,200
INCREASE IN NET POSITION 275,046$ 275,046$ 4,338,230$ 4,063,184$
Unaudited
51
52
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
proprietary fund and aggregate remaining fund information of the Okeechobee Utility Authority as
of and for the year ended September 30, 2022, and the related notes to the financial statements,
which collectively comprise the Okeechobee Utility Authority’s basic financial statements, and
have issued our report thereon dated May 3, 2023.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Okeechobee
Utility Authority’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Okeechobee Utility Authority’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the Okeechobee Utility Authority’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
53
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Okeechobee Utility Authority’s
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the financial statements. 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 or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
West Palm Beach, Florida
May 3, 2023
54
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE
FOR THE MAJOR STATE PROJECT
AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY CHAPTER 10.550,
RULES OF THE AUDITOR GENERAL
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on Compliance for the Major State Project
Opinion on the Major State Project
We have audited Okeechobee Utility Authority’s compliance with the types of compliance
requirements described in the Department of Financial Services’ State Projects Compliance
Supplement that could have a direct and material effect on the Okeechobee Utility Authority’s
major State Project for the year ended September 30, 2022. The Okeechobee Utility Authority’s
major State Project is identified in the summary of auditor’s results section of the accompanying
schedule of findings and questioned costs.
In our opinion, the Okeechobee Utility Authority complied, in all material respects, with the
types of compliance requirements referred to above that could have a direct and material effect
on its major State Project for the year ended September 30, 2022.
Basis for Opinion on the Major State Project
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and
Chapter 10.550, Rules of the Auditor General. Our responsibilities under those standards and the
Chapter 10.550, Rules of the Auditor General are further described in the Auditor’s
Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the Okeechobee Utility Authority and to meet our other
ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion on compliance for the major State Project. Our audit does not provide a legal
determination of the Okeechobee Utility Authority’s compliance with the compliance
requirements referred to above.
55
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements
applicable to the Okeechobee Utility Authority’s State Project.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with
the compliance requirements referred to above occurred, whether due to fraud or error, and
express an opinion on Okeechobee Utility Authority’s compliance based on our audit.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with generally accepted auditing standards,
Government Auditing Standards, and the Chapter 10.550, Rules of the Auditor General will
always detect material noncompliance when it exists. The risk of not detecting material
noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is considered
material if there is a substantial likelihood that, individually or in the aggregate, it would
influence the judgment made by a reasonable user of the report on compliance about Okeechobee
Utility Authority’s compliance with the requirements of each major State Project as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government
Auditing Standards, and the Chapter 10.550, Rules of the Auditor General, we:
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding Okeechobee Utility Authority’s
compliance with the compliance requirements referred to above and performing such
other procedures as we considered necessary in the circumstances.
• Obtain an understanding of Okeechobee Utility Authority’s internal control over
compliance relevant to the audit in order to design audit procedures that are appropriate
in the circumstances and to test and report on internal control over compliance in
accordance with the Chapter 10.550, Rules of the Auditor General, but not for the
purpose of expressing an opinion on the effectiveness of Okeechobee Utility Authority’s
internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we identified during the audit.
56
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a State Project on a timely basis. A material weakness in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a State Project will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a State Project that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed
to identify all deficiencies in internal control over compliance that might be material weaknesses
or significant deficiencies in internal control over compliance. Given these limitations, during
our audit we did not identify any deficiencies in internal control over compliance that we
consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not
suitable for any other purpose.
West Palm Beach, Florida
May 3, 2023
OKEECHOBEE UTILITY AUTHORITY
Schedule of Expenditures of State Financial Assistance
For the Fiscal Year Ended September 30, 2022
CSFA Contract State
State Grantor/Program Title Number Number Expenditures
Florida Department of Environmental Protection
Statewide Water Quality Restoration Projects 37.039
LP47021 173,775$
LPQ0008 2,403,225
LPQ0017 123,665
2,700,665
Total State Financial Assistance 2,700,665$
NOTE 1 - BASIS OF PRESENTATION
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
NOTE 3 - CONTINGENCIES
TheabovescheduleofexpendituresofstatefinancialassistanceincludesStategrantactivityofthe
OkeechobeeUtilityAuthorityandispresentedinaccordancewiththerequirementsoftheFloridaSingle
AuditAct.Therefore,someamountspresentedintheschedulemaydifferfromamountspresentedin,orused
inthepreparationofthebasicfinancialstatements.BecausetheSchedulepresentsonlyaportionofthe
operationsoftheOkeechobeeUtilityAuthorityitisnotintendedtoanddoesnotpresentthefinancial
position, changes in financial position, or cash flows of the Okeechobee Utility Authority.
Expendituresarerecognizedontheaccrualbasisofaccounting.Suchexpendituresarerecognizedfollowing
thecostprinciplescontainedintheFloridaDepartmentofFinancialServices'StateProjectsCompliance
Supplement,whereincertaintypesofexpendituresarenotallowedorarelimitedastoreimbursement.The
Okeechobee Utility Authority did not have any loan programs.
Amountsreceivedorreceivablefromgrantoragenciesaresubjecttoauditandadjustmentbythoseagencies.
Anydisallowedclaims,includingamountsalreadyreceived,mightconstitutealiabilityoftheOkeechobee
UtilityAuthorityforthereturnofthosefunds.Intheopinionofmanagement,allgrantexpenditureswerein
compliance with the terms of the grant agreements and applicable State laws and regulations.
57
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2022
58
SECTION I—SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor’s report issued on whether the financial
statements audited were prepared in accordance with GAAP: Unmodified Opinion
Internal control over financial reporting:
•Material weakness identified?No
•Reportable condition identified that is not considered
to be a material weakness?No
Noncompliance material to financial statements noted? No
State Financial Assistance
Internal control over major projects:
•Material weakness identified?No
•Reportable condition identified that is not considered
to be a material weakness?None reported
Type of auditor’s report issued on compliance for major
project: Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Chapter 10.550, Rules of the Auditor
General? No
Identification of Major State Project
CSFA Number Name of State Project
Florida Department of Environmental Protection
37.039 •Statewide Water Quality Restoration Projects
Dollar threshold used to distinguish between
type A and type B programs: $750,000
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2022
59
SECTION II — FINANCIAL STATEMENT FINDINGS
None
SECTION III— STATE PROJECTS FINDINGS AND QUESTIONED COSTS
Major State Project
Florida Department of Environmental Protection
Statewide Water Quality Restoration Projects – CSFA 37.039
None
SECTION IV— SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
None
60
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on the Financial Statements
We have audited the financial statements of the Okeechobee Utility Authority, as of and for the
fiscal year ended September 30, 2022, and have issued our report thereon dated May 3, 2023.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and Chapter 10.550, Rules of
the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in
Accordance with Government Auditing Standards; Independent Auditor’s Report on Compliance
for the Major State Project and on Internal Control over Compliance; Schedule of Findings and
Questioned Costs; and Independent Accountant’s Report on an examination conducted in
accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance
requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in
those reports and schedule, which are dated May 3, 2023, should be considered in conjunction with
this Management Letter.
61
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
financial audit report. There were no findings or recommendations in the prior year that required
corrective actions.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this management letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements.
Financial Condition and Management
Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply
appropriate procedures and communicate the results of our determination as to whether or not the
Okeechobee Utility Authority has met one or more of the conditions described in Section
218.503(1), Florida Statutes, and to identify the specific condition(s) met. In connection with our
audit, we determined that the Okeechobee Utility Authority did not meet any of the conditions
described in Section 218.503(1), Florida Statutes, during the fiscal year ended September 30, 2022.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied
financial condition assessment procedures for the Authority. It is management’s responsibility to
monitor the Okeechobee Utility Authority’s financial condition, and our financial condition
assessment was based in part on representations made by management and review of financial
information provided by same. Our assessment was done as of the fiscal year end. The results of
our procedures did not disclose any matters that are required to be reported.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any
recommendations to improve financial management. In connection with our audit, we did not have
any such recommendations.
Special District Component Units
Section 10.554(1)(i)5.c, Rules of the Auditor General, requires, if appropriate, that we
communicate the failure of a special district that is a component unit of a county, municipality, or
special district, to provide the financial information necessary for proper reporting of the
component unit, within the audited financial statements of the county, municipality, or special
district in accordance with Section 218.39(3)(b), Florida Statutes.
Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor
General, there are no special district component units of the Okeechobee Utility Authority.
62
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance
with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but warrants the
attention of those charged with governance. In connection with our audit, we did not note any such
findings.
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the
Auditor General, the Authority reported the required information in the Other Information Section
on pages 50 and 51.
Single Audits
The Okeechobee Utility Authority expended less than $750,000 of federal awards and more than
$750,000 of state financial assistance for the fiscal year ended September 30, 2022 and was
required to have a state single audit.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, Federal and other granting agencies, and applicable management, and is not
intended to be and should not be used by anyone other than these specified parties.
West Palm Beach, Florida
May 3, 2023
63
INDEPENDENT ACCOUNTANT’S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
We have examined the Okeechobee Utility Authority’s compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2022. Management of the Okeechobee Utility Authority is
responsible for the Okeechobee Utility Authority’s compliance with the specified requirements. Our
responsibility is to express an opinion on the Okeechobee Utility Authority’s compliance with the
specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the AICPA.
Those standards require that we plan and perform the examination to obtain reasonable assurance about
whether the Okeechobee Utility Authority complied, in all material respects, with the specified
requirements referenced above. An examination involves performing procedures to obtain evidence
about whether the Okeechobee Utility Authority complied with the specified requirements. The nature,
timing, and extent of the procedures selected depend on our judgement, including an assessment of the
risks of material noncompliance, whether due to fraud or error. We believe that the evidence we
obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the examination engagement.
Our examination does not provide a legal determination on the Okeechobee Utility Authority’s
compliance with the specified requirements.
In our opinion, the Okeechobee Utility Authority complied, in all material respects, with Section
218.415, Florida Statutes for the year ended September 30, 2022.
This report is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and Florida House of Representatives, the Florida Auditor General,
applicable management, and the Board of Supervisors, and is not intended to be and should not be used
by anyone other than these specified parties.
West Palm Beach, Florida
May 3, 2023