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Audit Report - 1983-1984 1 1 1 1 1 1 CITY OF ATLANTIC BEACH. FLORIDA i ANNUAL FINANCIAL REPORT (WITH SUPPLEMENTARY INFORMATION) i i SEPTEMBER 30. 1984 1 1 1 1 1 i al JUST i ~'~-¢sss ' CITY OF ATLANTIC BEACH, FLORIDA ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30 1984 , TABLE OF CONTENTS Pages Report of Independent Certified Public Accountants 3 General Purpose Financial Statements ' Combined Balance Sheet - All Fund Types end Account Groups 4-5 ' Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds 6 i Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget end Actual (GAAP Budgetary Basis) - General, Capital Projects, ' Special Revenue and Debt Service Fund Types 7-6 ~' Combined Statement of Revenues, Expenses and Changes in Retained Earnings/Fund Balance - All i Proprietary Fund Types and Pension Trust Fund 9 Combined Statement of Changes in Financial Position - All Proprietary Fund Types and Pension Trust Fund 10 Notes to Financial Statements 11-18 ' Supplementary Information General Fund ' Statement of Expenditures - Budget end Actual 19 ' eoos57 PaReg Proprietary Fund Types - Enterprise Funds 1 Combining Balance Sheet 20 Combining Statement o£ Revenues, Expenses end Changes in Retained Earnings 21 t Combining Statement of Changes in Financial Position 22 t 1 1 1 ~~-0658 1 1 1 i 1 1 1 1 1 i 1 ). rice __ Tterhouse -~; Honorable City Commission City of Atlantic Beach, Florida zs~ n sc„A~ JACKSOt~AM1lE. FLIXVOA 322Y2 ~a~~ December 14, 1984 We have examined the combined financial statements of the City of Atlantic Beach, Florida, as of and for the year ended September 30, 1984, as listed in the table o£ contents. Our examination wee made in accordance with generally accepted auditing standards and accordingly included such testa of the accounting records end such other auditing procedures as we considered necessary in the circumatences. In our opinion, the combined financial atetementa referred to above present fairly the financial position of the City of Atlantic Beach, Florida, et September 30, 1984, and the results of its operations and the changes in financial position of its proprietary fund types and pension trust fund for the year then ended, in conformity with generally accepted accounting princip lea which have been applied on a basis consistent with that of the preceding year. i Our examination was made for the purpose of forming an opinion on the combined financial atatemente taken as a whole. The combining and individual fund financial atatemente listed in i the table of contents are presented for purposes of additional analysis and ere not a required part of the combined financial atetementa of the City of Atlantic Beach, Florida. The i information has been subjected to Che auditing procedures applied in the examination of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken ea a whole. i Certified Public Accountants 1 i nnnFSq i . . . . . . . . . . . . . . . . . . . ~~~.~ 001NId1 eAlANlx s~ AIL nrao TYPE AND 9AAfa (EARS s~ 30. 1984 ~>~, ~~ wnd Ooenamtal Pld TyPe e and TvPe. TrPee Amour Qaae >4 Gaerel Cereral joule Spaclel Debt Cepltel sod Pen1m Im8-Tan Plred r~ Ont ~ Aeseu faecal Rea®e Servlm Pm acts rlae 'RVat Debt Aeaeb ~ _ fed. end Lrveetcte $/08,973 $ 421 $18,306 $13,125 $ 576,215 $1,223,940 $2,540,980 $1,838,893 Acoo.nte recelveble 231,676 52,614 191 284,481 276,443 Imatoriea 12,489 48,915 61,404 48,300 Oue faoa otler gosemsate 12,157 12,157 29,518 O.e fro. Defer fiada 12,157 12,157 20,891 1u 5,000 Ptepetd eapmeri 962 641 1583 2,849 Ober eeeeu 10,355 10,355 i 8eacrfeud Saeea~ce 809,351 8119,351 620,842 Coreteuctfm 1n pcagera r 115,917 115,917 PtoPertY. Plat sod . equlpsat-cat 1,896,011 91,410,498 3,307,009 3,183,284 Asast ewibsbbf >n the debt servlm find fix gyasot of lag-ten d 9 18,306 18,306 16,296 Aso~nt u be pcovlded br peys~~ of Lng- -debt ] 6 cecs 70, 94 770,694 412,704 Mnut m he prMdad Eor peyoaK of ]ag- ten portlm of oar paesud ebeenree 672; 63.723 50.268 Tool assets 5959.080 s12"s,e ~~ $25.282 S3•S10.019 $1.111.131 ~ 91"410.998 $7.613.]17 7 ~' See Notes u PLrrfel Sr~.s.... . a 0 ~ ~ ~ ~ ~ s ~ ~ ~ ~ r ~ ~ ~ ~ ~ ~ r ~ CIlY OP A71.1N1'[C BFi43i, nualu6 ~~~~ ,w, llso 3YP6 9290 6oouPrr oars sP2TPlmin 30. 19x4 rldu<i.ry ~~ ~,d G menxe:ntal n„a tvce e n.,d 1Yces 2voe. 6rw,rt lYaps 6peideble Cenerel Gueral ibtals fat Debt iul ~ .d ~>m ~ b ~ reM~ Otl finerel ~c Servlre seta @ite~ 'host pe [ eta _ clebiuciea Acmete peyeble e,d sern,ad llabtlitles $ 65,886 $ 5,089 $ 93,758 $ 164,fl3 $ 184,497 Obe m other fads 12,157 12,157 30,891 Oeposita 5,000 60,164 65,164 44,457 General lovg-tee debt pryeble $389.000 389,000 429.000 G'erenl lug-ten ooe u t d W ra p re o e nx payable 672) 67,)23 50.268 Total llebllltles 7J8B6 12.157 X089 153.922 453.723 694.777 729.109 ' Pled 8autty eelences u Imeetea,t >n del ' fixed meet $1,410,998 1,410,998 1,274,162 PIM equity: Canttibclar Erc~ other gwer~ta 819,846 879,846 910,483 ~ u ~aecred fo r rereesL eed repleoe.a,te BD9,351 809,351 620,842 Ii,rexervad retained eemLge 1,666,90D 1,666,900 1,274,000 P'ud hlencee: Peaer~ed far payeit of lug-ten debt $18,306 18,306 16,296 eeaerved [or I~QY 5,410 5,410 18,071 Prxrved 6or police tr $ 28,173 28,133 23,441 fad hlanoee 882784 431 X193 1.195.998 2.099.)96 1.638,922 7 e9"10 ~ helanoa X94 431 ly y 7,356,097 1.21/x131 1.410.998 6.918,340 5.776.179 Tatel lfabilt[Is aN Gad e9"itY helanne A955.aeo $13.578 a~1@e7~ $2i.7~L 33"510"019 ~3a2YJ.171 X152.112 91.410.998 37.613.117 See tutu m PLrcLl Btdsents. . . . . . . . . . . . . . . . . . . . i a , 7 r i :9 PJ 6erernn: 7aree Lltreaea ed pn.fu Federal eF,scod ceacre Pedenl grslu Sure ellered rnaeiee Slice gr~1u OCler 1eu[gorernaitel resere ~1gea fa eelvlm Pinn s,d forfefptu N,nt aoet Inre,n[ 4noee MleoelLleoue moue 7ore1 rareoes Pkpadl[iea: Cicra,[: Cererel glrue~a¢ F1Dl1c nfeq P1Elfc lclfeu Ibtle ad s[ueu lncregauen~sael servlcn Parke id reeasecim Oebt aecviae: Prlnelpsl raeiran! In[ereec N ffeul ~e Cgful alley ]Deal erpedln¢ae Hmese (deflrl[) of re,auee war mlpeldlq¢n Ot11er fLretlg ewaree (lien): Operecl.g [rarefero N Operatl~g trenEen (auc) cmr oP ell,wllc eernl, PIQIIM 0081471 9G19MM OP PE~'QUF5. DO'FH113111F5 AM au2las ]8 E1PO e61.18oPs 61L mVtlIIlQfl'N. nPaD 1YP6 xa r7wvul®1: 'OIIbT llfi6 IIX 71e vPax 114D s2rnlmm 30. 1984 ~>~ faarr~ul n.d 3ypee n.d ~ ~~~ wd 6e~a.e se...1m e.o area Ituec g 48z,6n 564.383 381,813 $48,625 661,146 12,142 3,712 70,785 77,814 27.030 291 2,112 X916 X495 g 4,211 2,453 y ~~ 1.717,141 3W.,143 737,849 267,385 20,810 13,549 80,733 1.464.469 252.672 164,383 156 ao0 8.383 01reee of ma.un eN otler sarcee war erpaldlaaee eM other lien 261,055 Pled 6elenw, Occa6et 1, 198] 627,139 Pled 6elrlres, Sepre~er 30, 1984 g 888.194 2,912 3brela ok~1.1b. Oo1y) g 547,060 $, 496.467 361,833 359,043 48,625 52,571 150,341 661,148 576,407 - 3,T43 12,142 10,103 3,712 6,337 70,785 72,226 4,211 5,022 82,670 80.668 28,030 10.617 1,640,216 1,ffis.065 344,143 291,405 740.821 636.904 125,574 267,785 282,891 20,610 14,680 13,X9 36,431 40,000 35,000 T7,,48s 26,373 241.775 486.920 GO,OOD u,46s 161 002 X485 16y y X916 X010 161 002 176,313 50 313) 50 313 176y313 1~b92i928 1,938,183 y 147.288 111 118 340,6% 465,955 206 313) 354 846 134,783 111,109 (1,197) 2,010 15,311 4,692 je1B ly 4,882 2441 8 421 ~~'~ S 1D.197 ~~. Sn tbcee to PLr1cL1 8t~_ •. 281,671 (9) 673,516 673.585 g 955.u7 S 67].576 Illy aP e3lvmc DE~aI, plmt m OOBIIFD sr41t1Q7[ OF PEVEHIEi, 170'F2111TIR6 xo Q~ >r fIRO e6urlas - lum~r wb ,va,w. (c66P ip10LET6RY eti97s) 187071 AL, aiPiTN. PBd1tLTS, set>:lnl. 86yF7alE AtO OEIfE smvl~ Flfo 3ms 1171 TIE veWi t2a0fD SFPI}l33®t7t 30, t984 General P1nd Spec fel Peeve IOade - PewnDle ~Veil®,oe Fewreble M[uel Bu a (liifewreble) Mtwl 9 t (I-iEewreDle) Bevee: Taxes S 482,677 $ 458.288 $ 2b,389 LScavee eN peMte 381,833 303.400 78.433 Federal shared Raam 548,625 $53,669 $(5,044) Stare shared mesas 661,148 .622.009 39.059 Other Interul teases 72,142 10,000 2,142 Qrcgea for aetvlaw 3,712 3,200 512 Phee and forfei[utea inrerent Lno•e 70,785 77,814 57,000 13,785 40,000 37,814 291 1,000 (709) Nlacellseae reV9a! T7.030 2000 2y _ iotel teauee 1.717,141 1.495,977 221,164 y y 5 753 B~pndtnan: C~¢rat: Caeral 8oeea~aR 344,143 354,482 10,319 Ablic uEety 737,849 76+,,JBL 26,915 Roeda ad etcoeta 267,385 294,660 27,275 ~ Intregooetnaafel ~ eervleee 20 810 21,060 1,250 Paciu aM axteatlm 13,549 14,400 851 ~ Oebt service: Principal mtresent Wecret eM Elarel drryRe C~pinl outlay 80,733 80.812 79 Total egetdl[utee 1,464,469 1,511,198 y B~cne (defielt) of meaee mar eryadttu[ee 252 612 35 22t Tb~893 y 1669 5 753) Other f(rorcing eo,¢cea (usn): OParat(nB trarofen 1n 164,383 164,387 OParatln8 trarofen (eut) 156 000 166 000 ly 50 313) 53 OOD) y 8.383 1 617 101000 50 713 53 ODD ~ 1681 8weu (deE1c1U of rmeeis J. eM orlas souroea over eapeMlturea and ueea 261,055 S (]6.838) 5297.893 (1,397) 9 1.669 sr3.o66) C ~ Plad 6ala~aea, Oeto6er 1, 1983 627.139 y FLd hlarcee, L47 Septeaber b, 1984 S 9Be.l~t $ 421 (farcfned on next psge) Sea Notes to P4reL1 cr..®..., . . . . . . . . . . . . . . . . . . . . w Q 01 .Fe CI7Y oP A71AN1'IC BFi1W. FILRIGiI mel[tn srelvvlr aP BG7hNIBS. E70'R•0171R6 Aw autn~ Ix f1Ei1 B6utms - elnrEr ARl Acnxl. (c6AP a>oc~rAwr eA9IS) mflw.. c1PITAC eenlocls. seoc7A1. Bcvt7a~e A!D Btar smvlo; nEO T2P65 1lR 31e YFwa f1gD sFrmmt 30. 1984 7ou1 Por All Budgeted CePitel Pro3ecte n.a oex 9etvloe Fud Covenea,tal I1.m TYoee Verlerce Verlerce Verlare PewreDle Fewreble Pewrable Acdrl e. ((Infewre6le) Acdal 9 [ (Oufewreble) Mdrl Rd~e (Ilnfewreble) Perau: Teem $84,383 $64.383 $ 547,060 $ 522.671 $24,389 Loa.eu eM patella Federal ehered teveatee Stele abated revauea Other L[er8wern•a,tal rerecuee Charges Eoz eetvlcp Plnee rd forfe(tu~rs Inletea[ Oo® Mlacellaomr terms Total terenea Papadit~aae: ~K: Ca.eral @.racr~t Wbltc ufe[y Aoeds and e[teeta Lrtrigrrvet>.artel Petke rd tecreatlmtac[ntlm Os6[ sluice: IR7nclpal retireaaa' Interns[ and f1au1 Cap ley 161 002 179 000 ibtel expedltutu 16y 17_y000 0ooess (deficit) of reraurs ores eapudlturoa 161 002) 179 000 Other Ehrne4g ea¢res (ueq): Opera4g trarefers N 176,313 179,000 Opera[4g tranfara (ae:) 1761313 17y 6meae (deficit) of [erases aM otter aoarae ores expad/ases aM ors Plod 6elamr, Octc6er 1, 1983 Nad 6elenos, Sepa~e 30, 1984 381,833 303,400 78,433 48,625 53,669 (5,044) 661,148 622,089 39,059 12,142 10,000 2,142 3,nz 3,2(10 s1z 70,785 57,000 13,785 2,112 $ 2.112 80,217 41.000 39.21) 27,030 2,000 25.070 66495 64.383 2 112 1,832,552 1,615,029 217,523 344,143 354,482 10,779 737,&.9 764,784 26,935 267.385 294,660 27,275 20,810 22,060 1,250 13,y.9 74,400 851 40.000 60,000 60.000 40.000 24.485 250,883 226,398 T!. 485 250.883 226.398 17 998 __ _ 241,775 259,812 18.077 ly y 226.398 1,689,956 2,001,081 311,125 ly 2y010 226 500 278.510 142,596 386 052) 5281 (2,687) N0,6% 1.3.383 (2,687) 208 317 219 OOD 12.687 2 687 IY•,383 124,381 l0i 15,311 ~Q 915.311 ~~ $ 20.193 2,010 (~,¢~ 9218.510 ly ~a~ (Cueluded) 9r tbtn m Financial Sbte•ata. 276,979 $ (261.669) 65D,135 9 927.114 ~ ~ ~ ~ ~ ~ e ~ ~ ~ ~ ~ ~ ~ s ~ ~ ~ ~ CITY OP ATLANTIC BEACH. FLORIDA COMBINED STATEMENT OP NEVENUES. E%PENSES AND CHANCES IN RE7AlNE0 EARNINGS/FUND BALANCE ALL PROPRIETARY FUND TYPES AND pFNSION TRUST POND POR THE YEAR ENDED SEPTEMBER 30. 1984 Q Operating revenues: Cuetoaer chsrgea Fiployer's con[rlbutlons State eontrLbutlona Other lncone To tai operating revenues Operating expenses: Personal services Contrectwl services Supplies Repstre end uln[enance Neat, light end power Depreciation Ocher expenses Retirement beneFib Total operating aspentes Openting incose Nonoperet Lng incase: Connection charges Interest lncose Total ronoperet ing ineoae Net incase before ape sting lnterfund [cane Eeo Opeuttng [ransEen (out) Net ineo~e Add depreeta[ton on fixed seset• acquired by shared revenws externally raRrleted for espltal Proprtetety Penelon Punde Pund Totele Peneioo SMeeorandw Only) Enteroriae Trues 19BT- T983 $1,083,091 $1,083,091 $ 801,612 $ 74,688 74,688 63,939 35,487 35,487 20,369 29,216 29,216 159.140 1.112,307 170,175 1,222,482 1.045.160 319,086 319,086 281,376 53,249 53,249 18,880 99,160 99,160 109,031 54,447 54,447 219,353 87,533 87,533 81,174 109,629 109,629 104,317 4,024 4,024 2,780 40,741 40,341 30.894 727,128 40.341 767.469 847,805 785,179 69.834 455.013 197.355 192,834 192,834 55,976 107.146 107,048 210.194 175.102 249.980 103.048 403,028 231.078 685.159 172,882 858.041 428,431 (134.383) (134,363) 111 108) 550,776 172,882 723,658 317,325 acquis It lone 30.638 30,638 18.880 Tnerease In retslned earnings 561,414 172,882 754,296 346,205 Retained earnings/fund balenea, October 1, 1983 1.894,837 1,027,116 2.917,953 2,571.748 Reuined esrnings/fund 6slsnce, Septe~ber 30, 1984 92.476.251 51.195-998 93.672.249 92.917.953 Sea Notes to YlssnelQ SteternG. ~ ~ ~ ~ . ~ ~ ~ ~ ~ ~ s ~ ~ ~ ~ ~ ~ ~ CITY OP ATLANTIC BEACH, FLORIDA COMBINED STATEMENT OP CHANGES IN FINANCIAL POSITION ALL PROPRIETARY FUND TYPES AND PENSION TRUST FUND F00. TIIE YEAR ENDED SEPTEMBER 30, 1984 Proprietary Pension Funds Pund To[ele Pane Lon (Mewundua Only) Enterprise 7ruet T9~ 487 Financial reaoureea wra provided by: Opeza[lons: Net incoae $550.775 $172,882 $727.657 $317,325 Iteae not rey~iring working capital during the period: Depreciation 109,630 109.630 104,717 Vorking capital provided by operations 660,405 172,882 83J,287 421,642 Contrlbutlons frog other governaents 67,610 Decrease Ln other assets 832 832 total sources of ror4ing eapltal 661,237 172,882 834,119 489.252 ~ Plnanciel resources were used for: Acqutalt ion of property, plant "' ~ and equlpaent 212 440 212,440 126,347 Increue in rutrieted Sovestaanb 188.510 188,510 347,000 ~ Increase in rorking capital $260.287 8172.882 $473.169 8 19.905 Analysis of Changes in Yorking Capital Increaae (decrease) in current assets: Cash and inveetaente $311,721 $172,882 9490,603 $ 26,889 Accounts receivable 3,568 3,568 3,734 Inventory 18,646 18,646 30 469 Other current assets 513) 513) 1.154 Increaae Sn current assets 339.422 172,882 512,304 42,246 (Increase) decrease In current Ifebi11t1ee: Accounts payable end accrued ~, liabtlitlee Cuecoa d i 58,424) 58,424) (11,003) er epoe [a 20 711) 20 711) 11 33B) Decrease in current llebilities 79 135) 79 135) 22 341) Qj Increase Sn working upitQ 8260.287 $172 ,B B2 5433.169 $ 19.905 Sae Notu to PLnane Ll SCatenenq. 1 1 i t CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1984 Note 1 - Summary of Significant Accounting Policies The following is a summery of the significant accounting principles and policies used in the preparation of these financial statements. A. Basis of Presentation The City of Atlantic Beach, Florida (the "City"), a municipality in Duval County, Florida, ie chartered by the state of Florida ae a centralized municipal government. The City Commission (the "Commission") is responsible for the legislative and fiscal control of the City. A City Manager is appointed by the Commission and La responsible for the management of the resources of the City maintained in the City's funds and account groups. The accounting records of the City are organized on the basis of funds and groups of accounts. A fund is defined ae a fiscal and operating entity, with a self-balancing set of accounts recording cash and other financial resources together with all related liabilities, residual equities, or balances and charges therein which are segregated for the purpose of carrying on the specific activities, or attaining certain objectives Ln accordance with special regulations, restrictions or limitations. For reporting purposes, the various funds of the City are classified into three basic fund types: governmental funds, proprietary funds and fiduciary funds. The fund types and account groups maintained by the City are described below: Governmental Fund Types - The General Fund is used to account for all revenues and expenditures applicable to the general operations of the City. - Special Revenue Funds are used to account for revenues which are legally restricted for specified purposes. - Debt Service Funds are used to account for the payment of interest and principal on long-term debt end revenues pledged for debt service. - Capital Projects Funds are used to account for the construction or acquisition of general fixed assets. _ 11 l1A~667 Proprietary Fund Types - Enterprise Funda are used to account for water, sewer and sanitation services that are financed and operated in a manner similar to private businesses where the intent of the governing body is that the costa of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Fiduciary Fund Types - The Pena ion Trust Fund is used to account for the assets of the pension plan. The fund is accounted for in essentially the same manner as proprietary funds since capital maintenance Se critical. - The Expendable Trust Fund ie used to account for assets held by the City as trustee. These funds are treated like governmental funds. Account Croups - The General Fixed Asset Account Group is used to account for fixed assets owned by the City which are not part of the Enterprise Funda. - The General Long-Term Debt Account Group is used to account Eor the outstanding principal balances of general long-term debt. The columns entitled "Totals (Memorandum Only)" are included for informational purposes only. These total columns are not comparable to consolidated financial information as the basic reporting entities and fund types use differing bases of accounting. In addition, interfund eliminations have not been made in arriving at the amounts included in these columns. Certain prior year balances have been reclassified to be comparable with the current year. B. Budget Requirements Florida atatutea require that the City establish a budgetary system for general operations. The City budget process is based on estimates of revenues and expenditures on a modified accrual basis. - 12 - r~J~,'1s68 ' C. Basis of Accounting ' All Governmental Funds and Expendable Trust Funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current ' liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund e operating statements present increases (revenues and other financial sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. The Governmental and Expendable Trust Fund Types use the modified accrual basis of accounting. Under the modified accrual basis, revenues are ' recognized in the accounting period in which they become available and measurable. Expend iturea, other than interest on general long-term debt which is recorded when due, are recognized ' in the accounting period when incurred. All Proprietary Funds and the Pension Trust Fund are accounted for on a coat of services or "capital maintenance" ' measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their reported ' fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) end decreases ' (expenses) Ln net total asaete. The Proprietary Fund Types and Pension Trust Fund use the accrual basis of accounting. Under the accrual basis, revenues are recognized in the accounting period in whlch they are earned. Expenses are recognized in the ' accounting period when incurred. water, sewer and sanitation services are billed in advance to customers on a quarterly cycle; revenues are recorded when earned. ' Cash and Investments Except where prohibited, the City commingles cash balances ' for all funds in a single investment account to maximize the yield on its investment of surplus cash. ' The City's investments for all commingled funds consist of certificates of deposit, treasury bills and other interest bearing accounts. Interest is recorded when earned. The cash and investment balance of the Expendable and Pension Trust fund includes an investment in a New England Life Insurance investment account, which is not commingled with other funds. ~ naosss - 13 - ' Inventories Inventories of the Enterprise Funds and the General Fund, ' consisting principally of materials, supplies end fuel, ere recorded at the lower of first-in, first-out coat or market. ' Property Taxes The assessment of all properties and the collection of all property taxes are made through the Property Appraiser and Tex Collector of the City of Jacksonville. General property taxes are recorded as received in cash, which approximate taxes levied, less discounts, for the current fiscal year. No material amount of property taxes ie susceptible to accrual. Property, Plant and Equipment ' General fixed assets are recorded ae expenditures in the purchasing governmental fund and recorded at coat in the General Fixed Asaeta Accouni Group. Infrastructure assets such as ' streets, sidewalks and street lights are not reported in the General Fixed Asaeta Account Group. Property, plant and equipment purchased by the Enterprise Funds ere carried at coat „less accumulated depreciation. Depreciation of fixed assets acquired with resources externally restricted foz capital acquisitions is amortized against ' contributed capital in the financial statements. Maintenance end repairs are charged [o expense as incurred. Mayor renewals and betterments are capitalized. ' The coat and related accumulated depreciation on disposals are removed from the accounts with gains or losses recorded on dispositions. Depreciation is provided using the straight-line method over the following useful lives: Buildings 25-30 Years ' Improvements other then buildings 40-50 Years Machinery end equipment 3-7 Yeera ' Interfund Transactions During the course of normal operations, the City has various transactions between funds to construct assets and comply with ' local ordinances and other legal restrictions. These transactions are reflected ea operating transfers. ' Pe naion Trust Funds and Pension Expense The City's investment contract with the New England Life ' Insurance Company ie valued at contract value. Contract value represents deposits made under the contract, plus interest. Pension expense includes normal coat plus amortization of pest service cost over 30 years. The City funds pension coats ' accrued. ~OU67 - 14 - Q Note 2 - Cash and Investments The total cash and investment bal ance of the City is compria ed of [he following items: Petty cash on hand $ 400 Savings and money market accounts 207,486 State Board of Administration 105,499 Total cash and investments available upon demand $ 313,385 Certificates of deposit Leas than 30 days maturity 533,561 31-90 days maturity 561,584 91-180 days maturity 747,710 181-360 days maturity 102,892 Greater than 1 year maturity 115,771 Total certificates of deposit 2,061,518 U.S. Treasury bills and notes Less than 30 days maturity 198,3b5 91-180 days maturity 240,858 Greater than 1 year maturity 105,735 To[el U.S. Treasury bills and notes 544,958 New England Life investment account 430,470 Total cash and investments 3,350,331 Less: restricted inveatmenta 809,351 Total unrestricted cash and invea tmenta $2.540.980 Note 3 - Property, Plant and Equipment Property, plant, and equipment of the Enterprise Funds at September 30, 1984 follows: Total Water Sewer Sanitation Enterprise Fund Fund Fund Funds Land $ 65,557 $ 65,557 Buildings $ 393,718 505,685 899,403 Improvements other than buildings 1,038,513 945,677 1,984,190 Machinery end equipment 2,733 $225,674 228,40% Less-accumulated depreciation (491,522) (648,891) (141,133) (1,281,546) 3 940.709 5870.761 84 4 31.896.011 ~l00671 -ls- The changes in the General Fixed Asset Account Group follow: Improvements other than Land Buildings buildings Equipment Balance at October 1, 1983 $128,356 $275,626 $405,696 $464,484 Additions 5,700 31,549 5,665 173,308 Dispositions (79,386) Balance at September 30, 1984 1 4 056 07 1 411 6 5558.406 Note 4 - Lon¢-Term Debt General long-term debt includes 1958 and 1971 General Obligation Sewer Bonds. The proceeds from the 1958 bonds were used for construction of a sewer system. The proceeds from the 1971 bond issue were used for extensions and improvements to the existing sewer system. Interest rates range from 3.8% to 5.75% per annum. General long-term debt decreased by $40,000 during fiscal 1984, through payment of scheduled principal maturities. The remaining maturities for this debt follow: Due in 1958 1971 Fiscal Sewer Sewer Year Bonds Bonds Total 1985 $20,000 $ 20,000 $ 40,000 1986 20,000 22,000 42,000 1987 20,000 25,000 45,000 1988 20,000 25,000 45,000 1989 25,000 25,000 1990 25,000 25,000 1991 30,000 30,000 1992 30,000 30,000 1993 30,000 30,000 1994 40,000 40,000 1995 37.000 37.000 580.000 S309.000 - 16 _ A(~8672 Total principal and interest payments of $64,383 ($23,800 and $40,583 for the 1958 and 1972 bond series) were made during 1984. Summary debt service requirements (principal and interest) to maturity are as follows: General Lona-Term Debt 1985 $ 62,323 1986 62,262 1987 63,072 1988 60,688 1989 38,302 1990-1994 195,413 1995 39>128 1 18 Note 5 - Employee Benefits The City has a noncontributory defined benefit pension plan covering aubstentially all employees. Total pension expense for all funds for the year ending September 30, 1984 was $79,123. The City's pension contribution is computed using accepted actuarial methods and, except for the effects of plan amendments, if any, is not expected to increase materially in the future in relation to total payroll expense. Accumulated plan benefits, determined as of September 30, 1983 by the City's actuary, and net assets of the plan fallow. A 7.5% rate of return was used in determining accumulated benefits. Actuarial present value of accumulated plan benefits: Vested Non-Vested Net assets available for plan benefits $481,564 58,674 40 2 S1.023.000 ~~~s~.~ - 17 _ 1 1 t 1 1 1 1 Note 6 - Segment Information for Enterprise Funds The City has estab lished three Enterprise Funds to account for water, sewer and sanitation services. Segment information for the year ended September 30, 1984 is ea fol lows: Total Water Sewer Sanitation Enterprise Fund Fund Fund Fugda Operating revenues $ 261,308 $ 634,798 $216,201 $1,112,307 Depreciation 43,052 41,745 24,832 109,629 Operating income (loss) 94,899 332,812 (42,532) 385,179 Operating transfers in (out) (100,000) (64,383) 30,000 (134,383) Nonoperating income 67,797 232,183 - 299,580 Net income 62,696 500,612 (12,532) 550,776 Net plant, property and equipment 940,709 870,761 84,541 1,896,011 Net working capital 245,348 200,376 78,739 524,463 Total equity 1,314,360 1,878,457 163,280 3,356,097 -la- ~0467q i~ ~~DS`7S II CT1Y OF ATL4NPIC BFAQi, F[ IA AR ' GENBRAL FiRID STATQ~If OF 1XPf2IDIYURES -BUDGET AND ACTiWi. 1LR 1RE YEAR ESB)ED SEPfFPffifR 30, 1984 Variance Fawrable ' Actual Budget (Unfawreble) General government: - Legislature: ' Personal services $ 16,987 $ 18,793 $ 1,806 Other services acd charges 240 4,700 4,460 ' Total legislature 17,227 23,493 6,266 Executive: Persaial services 40,213 40,451 238 ' Other services and charges 3,673 4,203 530 Total executive 43,886 44,654 768 Financial: Personal services 121,160 122,051 891 Other services acd charges 29,005 29,321 316 Total fir~encial 150,165 151,372 1,207 General services: Personal services 713 714 1 Other services acd charges 132,152 134,249 2,097 Total general services 132,865 134,963 2,098 ' Total gererel goverrmert afe P bli : 344,143 354,482 10,339 u c s ty Personal services 631,970 658,540 26,570 Other services acd charges 105,879 106,244 64 84 365 26 5 Total public safety 737,849 7 ,7 ,93 Roads and streets: Personal services 188,830 215,310 26,480 Other services aid charges 78,555 79,350 795 Total roads end streets 267,385 294,660 27,275 ' Parks end recreation: Other services acd charges 13,549 14,400 851 Total parks and recreation 13,549 14,400 851 Intregoverrm~tel services: Personal services 18,939 20,185 1,246 Other services end charges 1,871 1,875 4 Total intragovernmental services 20,810 22,060 1,250 i Capital outlay 80,733 80,812 79 Total exprsdign-ea 51.464.469 1 1 66 72 1 t t Fi i l St t o See No es nanc a at eaea s. - 19 - ~'~ ~~ ~ ~ r s ~ ~ ~ ~ ~ s ~ ~ ~ ~ ~ o ~ ~ ~ CITY OP ATLANtIC BEACH, FLORIDA COMBI N[NC BALANCE SHEE7 ENTERPRISE FUNDS SEPTEMBER 30, 1984 YITN COMPARATIVE TOTALS FOR SEPTEMBER 30, 1981 Asceta N 0 J 'v7. 4 Cash end inveetaents Aceounce recetveble Prepaid expenses Inventories Total current tueta Other assets Rea[ricted inveataente Conatruccton Sn progress Property, plant end aqulpaent - net Total aseeu Llebtl lttee and Fund Faulty Liabil it Lea: Aeeounte payable and accrued 1feb111ttea Custoter deposits Total liabllitiea Pund equity: Con[ributiona - other governaenc• Retained earnings: Reserved for renevale and repleceaence Unreserved Total rabined earnings Total Eund equity Total liabilltiea and fund equity Mater Sever Santb[Lon Toule Pund Pund Fund 1484- 2987 9 276,361 $ 247,806 $ 92,048 $ 576,215 $ 258,494 42,372 10,282 52,614 49,046 108 333 641 1,154 48.915 48.915 30,269 327.916 258.421 92,048 678,385 338,963 670 9,685 10,355 11,187 127,63) 681,718 809,351 620,842 115,917 115,917 940,709 $1.396.928 870,761 51.976.502 84,541 $176.589 1 $3 .896,011 1. .510.019 52 909,122 .880.114 $ 22,404 $ 58,045 $ 13,309 $ 97,758 $ 35,334 60,164 60.164 39,453 82,568 58.045 13.]09 153,912 74.787 593,918 285,928 879,84b 910,485 127,633 681,718 809,351 620,842 592,809 910.811 163.280 1 .666.900 1 .274,000 720,442 1,592,529 167,280 2 ,476,251 1 .694.842 1,314,360 1,878.457 163,280 3 ,356,097 2 .805,727 $1.396.928 $1.936.502 4176.589 S3 510.019 $2 .880.114 Sea Notaa Co Plnancial Stateaenta. CITY OF ATLANTIC BEACH. FLORIDA COMBINING STATEMENT OP 0.EVENUFS. EXPENSES AND CHANCES IN RETAINED EARNINGS ENTERPRISE FUNDS FOR 'THE YEAR ENDED SEPTEM8E0. 70. 1984 VITN COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30. 1981 , N r , Operating revenues: Cuatoner ehargec Ocher incoae io[Q operating revenues Operating eapenaea: Personal services Conereccual aervlcee Supplies Repairs end aeintenance Heat,] Lghc end porar Depree (at(on Other eapenaea Total operating erpe rases Operating lncoae (lose) Nonoperating incoae: Connee[Lan charges Intereec intone Toral nonoperating lncosa Ne[ Sncoae (lose) before operating Ln[erEund tranafera Opeucing tranafera in (out) Net lneoae (lose) Add depreciation on fired aseeta acquired by shared revenues ea[ernally rea[ritted Eor capful aequu It tone Increase [n re[etned eerninga Re[dned earnings, October 1, 1997 Repined eatninga at Septeaber 30, 1984 Voter Serer Sanl[atfon Totals Pund Fund Fund 1987 T983 $241,920 $ 628,598 $TIZ,573 $1,083,091 $ 801,512 19,J$B _ 6,200 3,628 29.216 1s9.240 261,308 634.798 216,201 1,112.307 _ 9-6852 51,251 95,416 182,419 319,086 281,376 4,194 43,629 5.426 53 249 18,880 25,971 34,440 38,749 99,160 109,071 14,859 34,429 5,159 s4,447 219,353 26,927 60,706 87,s7I BI,174 43,051 41,745 24,832 109,629 104,317 2ss 1.621 2,748 4.024 2,780 166,409 301.986 258,77] 727.128 815,911 94.899 332.812 42 s72 385.179 143 941 34,876 137,9se 32,921 )4.22s 67.797 232.181 162,696 664.995 100 000) (64,787) 62,696 500,512 24.537 6.101 87,233 506,713 63J,209 1,085.315 3720.442 31.592.629 192,874 Ss,976 107,146 93,387 299.980 139.1s9 42 sI2) 685.159 283.300 30.000 (134.383) (111,103) (12 632) 660,776 172,192 _ 30.678 28.880 (12,632) 681,424 201,072 176.812 1.894 ,317 1,693,765 3167.280 32.476.251 g1 .394.837 Sea Notes [o Plnanclal 8[a[eaenu. .? J CITY OF ATLANTIC BEACH. FLORIDA COMBINING STATEMENT OP CHANCES IN PINANCIAL POSITION ENTERPRISE FYNDS FOR THE YEAR ENDED SEPTEMBER 30, 1984 YI7H COMPARATIVE AMOUNTS POR THE YEAR ENDED SEPTO~BER 30. 1983 N N O O Oi pinenetel reeourcee rere provided by: Opeutlone: Nec Eneoee (lone) Dapreeiettoo Vorking capital provided by opeuttons Concr(butione froe other gover,rente Decreeae 1n other acacia Total eourcae of rocking capital Pinenctel reeourcee rere aced Eor: Acqutettton of property, plant end equlpeent Inereue Ln ree[rlctad inveeUenu Inereeee (decrwee) in vorking uplul WC<r Serer Seni cation Totele Pmd Pund Fund 198~ i487 $ 62,696 $500,612 ($12,533) $550,775 $172,192 43.052 41,745 24.833 109.610 104.317 105,748 542,357 12,300 660,403 276,509 67,610 267 565 832 106.015 542,922 12.700 661,237 344,119 2T,730 184,210 5,500 212,440 126,347 30.552 157,958 188.510 343.000 $ sz.733 Sz0o.7s4 s b.eoD $260.287 (Q) Awlve is of Chengee 1n VorkLnR GplCel Increase (decreeee) In current eeeets: Cuh and Snveateen[e Accounts receivable Inventory Other current aese[e Inereeee (decreeee) In current assata (Inereeee) decreeee in current liebtlit iaa: Accounts payable cad aecrwd ltabillt lee Cwtoner Dapoelta (Inereeee) decreue In current 1 Lbiliclee Inereeee (deereue) Ln rocking upibl $ 64,962 $237,399 $15,360 $]17,721 ($118,244) 255 7,428 (4,115) ],568 3,734 19,326 (680) 18,646 10,469 246) 267) (513) 1,154 84.297 243,880 11.245 339.422 102 887) (10,853) (43,126) (4,445) (58,424) (11,003) TO 711) 20 711) ll 33B) 31 564) 47 126) 4 445) 19 US) 22 341) ($ ) 9sa Notae to P/wnelal 9tetewnq. Deloitte Haskins+Sells Ceftihetl Pubbc Accountants CITY OF ATLANTIC BEACH, FLORIDA Single Audit Report For The Year Ended September 30, 1985 Deloitte Haskins+Sells Cetlifietl Public Accountants Suite 1240. Atlantic Bank Building 200 West Forsyth Sireel Jacksonville. Florida 32202-0371 (6041 354-8333 ITT Telex: 4995892 Honorable Mayor and January 27, 1986 City Commissioners City of Atlantic Beach, Florida Dear Sirs: We have examined the financial statements of the City of Atlantic Beach, Florida as of and for the year ended September 30, 1985 and have issued our report thereon dated January 27, 1986. As part of our examination, we made a study and evaluation of the City's system of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion on the Company's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. The observations reported herein should be considered in the context of the responsibility of management for establishing and maintaining a system of internal accounting control, the objectives of and inherent limitations on such a system, end the definition of a material weakness for purposes of this report, which are described in the Appendix to this report. Our study and evaluation made for the limited purposes described in the first paragraph would not necessarily disclosed all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of The City of Atlantic Beach, Florida taken es a whole. However, our study end evaluation disclosed no condition that we believe is a materiel weakness. Honorable Mayor and City Commieaioners January 27, 1986 Our examination did, however, disclose the following conditions that, although not considered by us to be material weaknesses, ere weakneasea in internal accounting control for which corrective action might be taken or conditions for which improvements might be made. Cash Disbursements Finding - Cash disbursements from [he City's cash and nvi estment accounts require only one authorized check signature. Bac round - The City presently relies upon the review and approve of documentation supporting disbursements by the City Manager and the preparation of monthly bank reconciliations by a non-checksigner es the primary internal controls over cash disbursements. These controls, together with overriding control provided by the general supervision of the City Manager in the close working environment of the City's Finance Department, appear to mitigate this condition as a material weakness. However, it is felt that dual signature authority over material cash disbursements would strengthen internal accounting control and documentation. Recommendation - Establish an upper monetary limit for single s gna t~ ure authority for cash disbursements and require dual signatures on cash disbursements which exceed the limit. In addition, dual signatures should be required for all cash disbursements from grant and other restricted funds. The City should also consider the use of facsimile signature with respect to routine batched disbursements. EDP Terminal Security Finding - The utilities cashier could directly access water and sewer customer billing records through an EDP terminal. BaclcR round - The EDY terminal located Sn the utility cashier's work area is used by the cashier to access customer billing records in order to answer customer inquiries or disputes about their water and sewer bills. The security status of the terminal also allowed the Cashier the capability to directly make changes to or alter such records in the system. However, changes to customer billing records on the system should only be made by the Finance Department's EDP operator, upon the submission of authorized documentation of such changes. Honorable Mayor and City Commissioners January 27, 1986 Recommendation - We recommended that the security status of t e ut ty cashier's EDP terminal be changed to "inquiry only". Information may still be accessed and viewed, however, changes to the underlying records cannot be made directly through the terminal. The City Manager end Finance Director concurred with our recommendation and it is our understanding that it has been implemented. Payroll Distributions F_in~ding - The City's payrolls are distributed to its employees by its various department heeds and directors. Bac round - The City's payrolls are prepared by the Finance apartment based on employee time records which are submitted by department heads or their designees. Upon preparation, the payrolls are submitted back to the persons for distribution. These circumstances allow access to initial employee payroll records and payrolls by the same persons. Recommendation - Periodically perform surprise payroll distributions. The City Manager or another responsible employee, independent of routine payroll responsibilities, should deliver and distribute payroll checks on a surprise basis on randomly selected dates, two or three times a year. This will act as a deterrent and provide for the detection of continued payroll distributions to terminated or fictic ioua employees. Encumbrance System Finding - The City does not presently use an encumbrance accounting system in its Governmental Type and other budgeted funds. Back round - The City presently manages its expenditure u gets y comparison of actual expenditures incurred to budgeted amounts. This requires considerable judgment as total expenditures approach their budgets in that the Finance Department must accumulate and manually determine the extent of outstanding and in-process purchase orders and estimate emergency expenditures. An encumbrance system is a widely-used and valuable tool in this process. With an encumbrance accounting system, the Initial accounting for expenditures 6egina with the purchase order or request which is recorded on the system as an appropriation prior to the actual expenditure. This allows for more efficient management of budgets as outstanding purchase orders representing encumbered funds are recorded and accumulated on the system. Honorable Mayor and City Commissioners January 27, 1986 Recommendation - The City should study the feasibility of est~a T sfT non encumbrance accounting system over expenditures in Governmental Fund Type and other Budgeted funds. Debt Covenants Find~in -The City has not formally established accounting for the revenue, sinking fund and other related accounts and reserves outlined in the debt covenants of the Buccaneer District water and Sewer Revenue Bond Ordinance. Recommendation - Prepare a monthly working paper analysis w c-Fi~~- act for these restricted asset accounts in accordance with the covenants of the Bond Ordinance. The total funds accounted for in this analysis should agree with the restricted cash and investments account of such funds recorded in the general ledger of the related Enterprise Funds. Dlanual Subsidiary Records Finding - The City's general ledgers and budgets are maintained on their computer, however, numerous aubeid iery records supporting account balances and memorandum accounts are prepared manually. Background - Many of the City's subsidiary records and ens- Iysea of general ledger and memorandum accounts are maintained manually. The increase in transactions during the fiscal year, particularly with the procurement of two new grants end bond issues, together with future significant transactions planned, will require substantial additional subsidiary record level accounting and schedule preparation and maintenance by the Finance Department. Considering the efficiencies afforded by the use of a microcomputer in performing subsidiary record level accounting together with its relatively nominal costs, coat recovery should be realizable in a snort period of time. Recommendation - The City should consider obtaining a mm croc~for use in the Finance Department. t t Honorable Mayor end Clty Commiasionera January 27, 1986 5 This report is intended solely for the use of management and should nor. be used for any other purpose. Me will be pleased to discuss these comments With you and, if desired, to assist you in implementing any of the suggestions. Yours truly, ~JQ`O~~C ~o~4.a Q JtSDG~ APPENDIX MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF, INTERNAL ACCOUIiTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS The following comments concerning management's responsibility for internal accounting control, [he objectives of and the inherent limitations on a system of internal accounting control, and the definition of a material weakness are excerpts from Statements on Auditing Standards of the American Institute of Certified Public Accountants. Management's Responsibility Management ... is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control p rocedurea. Objectives The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting princ iplea. Limitations Because of inherent limitations in any system of internal accounting control, errors or irregularities nevertheless may occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Materiel Weakness A material weakness (for the auditor's purpose) is a condition in which the specific control procedures, or the degree of compliance with them, do not (in the auditor's judgment) reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. These criteria may be broader than those that may be appropriate for evaluating weaknesses in accounting control for management or other purposes. • Deloitte Haskins+Sells Cenifietl Public Accountants Suite 1240. Atlantic Bank Building • 200 West Forsyth Street Jacksonville. Florida 32202A371 (9041 354-8333 ITT Telex: 4995842 AUDITORS' OPINION • Nonorable Mayor end Members of the Clty Commission City of Atlentlc Beech, Florida • We have examined the combined financial statements of the City of Atlantic Beach, Florida as of and for the year ended September 30, 1985. Such combined financial ata[emente are included in your 1985 Annual Financial Report and are incorporated herein by refezence. • Our examination was made for the purpose of forming an opinion on the combined financial statements taken ae a whole. The supplemental schedule of grant activity for the year ended September 30, 1985, included herein, is presented for purposes of additional analysis end Se not a required part of the combined financial statements. Such supplemental schedule has • been subjected to the auditing procedures applied in the examination of the basic combined financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic combined financial etatementa taken ea a whole. • ~~~'~Te ~~ A ~elOh .Ianuary 27, 1986 . . . . . . . . . . . clrr aF Aruxnc gEACx, FLO91w SCXEOULE OF GRANT ACTIVITY FOR TXE TEAR ENDED SERTEIBER 30. 1985 Grant and Entitleaa!nt ContrlbuLlons and Revenues (Accrued) Accrued Grantee Grant and October 1, Septeaber 30, Inkrest Entl tleaent Grant Title Grant Nuaber 1984 Recelve0 1985 Recognized Earned Tokl Espendlkres FEDERAL 60YERMIFIIT GRANT AND EMT[TIEMEMT: Enri ronaenkl RroLK tion Agency Federal Nerenue Sharing Tokl Federal goverment grant and entitleaz!nt STATE 60YERNIExT GRANT - F1or1M Departaent of Envi ronaenkl Regulation C120747-03 j 01,431 {59,013 ;110,M1 j140,444 ;115,955 10-2-015-001 (12 157) 55,233 74100 57 254 20 57,104 (12,157) 135,654 73201 197,700 220 197,920 115.955 147010 1296 10.2% 10,2% 10 2% TOTAL 1 15 5136.649 183.497 f20 •WB ,4, ~ 24 ~]j6.252 • Deloitte Haskins-Sells Certilled Public Accou mains Suile 1240. Atlantic Bank auilding ~ 200 West FarsNh Sneel Jacksonville. Florida 32202-4371 (90413548333 ITT Telex; 4995042 Honorable Hayor and Hembera January 27, 1986 ~ of the City Commission City of Atlantic Beach, Florida Dear Sira: We have examined the combined financial statements of the City ~ of Atlantic Beach, Florida as of and for the year ended September 30, 1985, and have issued our report thereon dated January 27, 1986. As part of our examination, we made a study and evaluation of the City's eyatem of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards and ~ the Standards for Financial and Compliance Audits contained in Standards for Audit of Governnmeotal Or¢anizationa. Proxrems. General. For the purpose of this report, we have classified the s~ificant internal accounting controls in the following categories: cash receipts and dleburaements, cash and investment balances, receivables, budgets, fixed assets, payroll, ~ purchasing, grants, debt administration and general ledger. The purpose of our study and evaluatlon was to determine the nature, timing, and extent of the euditin~ procedures necessary for expressing an opinion on the City s financial statements. Our study and evaluation was more limited than would be necessary to express an opinion an the eyatem of internal accounting control ~ taken as a whole. The observations reported herein should be considered in the context of the responsibility of management for establishing and maintaining a eyatem of internal accounting control, the ~ objectives of and inherent limitations on such a eyatem, and the definition of a material xeakness for porpoise of this report, which are described in the Appendix attached to this report. Our study and evaluation made for the limited purpose described in the first paragraph would not necessarily disclose all ~ material weaknesses in the eyatem. Accordingly, we do not express an opinion on the system of internal accounting control of the City of Atlantic Beach, Plorida taken as a whole. However, our study and evaluatlon disclosed no condition that we believe ie a material weakness. ^• Honorable Mayor and Maabera of City Couiasion .lanuery 27, 1986 2 ~• This report is intended solely for the use of the City of Atlantic Beach, Florida and the Federal Cogniraot Audit Agency and other Federsl and Stets audit agencies end should not be used for any other purpose. ~ ^Your1~ truly`.` ` v~0 ~< ~Ld~tw 4~ ~ DELDITTE FiAS&INS 4 SELLS Attachaent ~• ~• ~• APPENDIX • MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF, INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS The Following comments concerning management's responsibility for internal accounting control, the objectives of and the inherent • limitations on a system of internal accounting control, and the definition of a material weakness are excerpts from Statements on Auditing Standards of the American Institute of Certified Public Accountants. • Management's Responsibility Management ... is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. Objectives The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded • against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization end recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. • Limitations Because of inherent limitations in any system of internal accounting control, errors or irregularities nevertheless ma7 occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become • inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Material Weakness A material weakness (for the auditor's purpose) ie a condition in • which the specific control procedures, or the degree of compliance with them, do not (in the auditor's judgment) reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned • functions. These criteria may be broader than those that may be appropriate for evaluating xeaknesses in accounting control for management or other purposes. C] • Deloitte Haskins+SeUs Cart tired Public Accou plants Suite 7240. Atlantic Bank Building 200 W¢51 F0i5yIh $tre¢I Jacksonville. Florida 32202-4371 (9041 354-8333 ITT Telez: 4995642 ~ Honorable Neyor aad Members of the January 27, 1986 City Commission City of Atlantic Beach, Florida Dear Sire: ~ We have examined the combined financial statements of the City of Atlantic Beach, Florida as of end for the year ended September 30, 1985 and have Lasued our report thereon dated January 27, 1986. Our examimtion vas made in accordance with generally accepted auditing standards, the provisions of Standards for Audit of Governmental Organizations, Programs, • ct v t ea en unct one, promu gate y t e omptro er spars , c parts n to financial snd compliance audits; the Office of Management and Budget's (OMB) Compliance Supplement_ for Sin le Audits of State and Local Governments; an , provia ona o OMB a Circular A- , vi ors Adm letrative Re uiremente for Grants-In-Aid to State an oca overnnents • Attac ant P, udit Requiremen_ta an the v de pea or Financial and om ante u is of Federa - ea ate ro rams Guidelines and, accordingly, included auc testa o t accounting records and such other auditing procedures ea we considered necessary in the circumstances. • In our opinion, for the tested operations and records, the City of Atlantic Beach, Florida, complied rith the material terms and conditions of its Federsl end State grants, contracts, and agreements, and the tested Federal and State financial reports present the underlying financial data of the . grants. Further, based on our examination and the procedures referred to above, nothing came to our attention to indicate that the City of Atlantic Beach, Florida, had not complied with the compliance matters referred to above, and the Pederal and State financial repo rte do not present the underlying financial data of the grants. • Thia report is intended solely for the use of the City of Atlantic Beach, Plorida end the Pederal Cognizant Audit Agency and other Federal and State audit agencies end should not be used for any other purpose. ~ Yours t'r'1uly,`` ~~u~o.tle t~w~~ctn,.~ d~Q~ DELOITTE HASKINS fi SELLS •