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Purvis
Gray &
Company
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
To the Honorable Mayor and
City Commissioners
Atlantic Beach, Florida
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund,and the aggregate remaining fund information of the City of Atlantic Beach,Florida, (the City),
for the year ended September 30, 2015, and have issued our report thereon dated June 23, 2016.
Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards,as well as certain information related to the planned scope and timing
of our audit. We have communicated such information in our engagement letter to you dated March 12,
2014, and our subsequent communication letter dated June 29, 2015. Professional standards require that
we provide you with the following information related to our audit:
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. The following new
pronouncements were adopted during the year ended September 30, 2015:
• The City implemented Governmental Accounting Standards Board (GASB) Statement No. 68,
Accounting and Financial Reporting for Pensions; and GASB Statement No. 71, Pension Transition
for Contributions Made Subsequent to the Measurement Date.
The impact of these standards is more fully described in Note 15 of the financial statements. We noted no
transactions entered into by the governmental unit during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based
on management's knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from
those expected. The most sensitive estimates affecting the financial statements were:
• Management's estimate of the depreciation and accumulated depreciation which is based on the useful
lives determined by asset type.
Certified Public Accountants
P.O. Box 141270 • 222 N.E. 1st Street • Gainesville, Florida 32614-1270 • (352) 378-2461 • FAX (352) 378-2505
Laurel Ridge Professional Center • 2347 S.E. 17th Street • Ocala, Florida 34471 • (352) 732-3872 • FAX (352) 732-0542
443 East College Avenue • Tallahassee, Florida 32301 • (850) 224-7144 • FAX (850) 224-1 762
5001 Lakewood Ranch Blvd. N., Suite 101 • Sarasota, Florida 34240 • (941) 907-0350 • FAX (941) 907-0309
MEMBERS OF AMERICAN AND Fl ORIDA INSTITUTES OF CERTIFIED PUBLIC ACCOUNTANTS
MrMBER OF AMERICAN INSTITUTr OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES AND S.F.C.PRACTICE SECTIONS
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To the Honorable Mayor and
City Commissioners
Atlantic Beach, Florida
Significant Audit Findings (Continued)
Qualitative Aspects of Accounting Practices (Concluded)
• Management's estimate of the allowance for uncollectible accounts which is based on historical trends
and an analysis of the collectability of individual accounts.
• Management's estimate of the other Postemployment Benefits Obligation which is based on actuarial
assumptions and estimates.
■ Management's estimate of the net pension liability for the City's two defined benefit pension plans is
based on the actuarial valuations performed by a qualified actuaries. As permitted by GASB Statement
No. 68, the City has elected to use a measurement date to record the net pension liabilities and related
deferred inflows and outflows of resources,that is one year prior to the reporting date. The net pension
liability represents the difference between the value of the pension plan assets and the total pension
liability,which is measured using various actuarial assumptions. These assumptions, if changed, could
have a significant impact on recorded amounts.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosures affecting the financial statements was:
• The disclosure in Note 7 that discusses Pension Plans for the City.
We evaluated the key factors and assumptions used to develop the estimates described above in determining
that they are reasonable in relation to the financial statements taken as a whole.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. As described in the Independent Auditors' Report on
Internal Control Over Financial Reporting and Compliance on Other Matters, we detected misstatements
that we consider to be material. All material misstatements identified were corrected and posted by
management.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditors' report. We are pleased to report that no such
disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated June 23, 2016.
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To the Honorable Mayor and
City Commissioners
Atlantic Beach, Florida
Significant Audit Findings (Concluded)
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters,similar to obtaining a"second opinion"on certain situations. If a consultation involves application
of an accounting principle to the governmental unit's financial statements or a determination of the type of
auditors' opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge,there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were not
a condition to our retention.
Other Matters
We applied certain limited procedures to the Required Supplementary Information (RSI), which
supplements the basic financial statements. Our procedures consisted of inquiries of management regarding
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. We did not audit the RSI and do not express an opinion
or provide any assurance on the RSI.
We were engaged to report on supplementary information which accompany the financial statements but
are not RSI. With respect to this supplementary information, we made certain inquiries of management
and evaluated the form,content,and methods of preparing the information to determine that the information
complies with accounting principles generally accepted in the United States of America, the method of
preparing it has not changed from the prior period, and the information is appropriate and complete in
relation to our audit of the financial statements. We compared and reconciled the supplementary
information to the underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
We were not engaged to report on other statistical information,which accompany the financial statements but
are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the information and use of the City Commission and management
of the City of Atlantic Beach, Florida and is not intended to be, and should not be, used by anyone other
than these specified parties.
CP11"141/. letC7 (2/?td.
June 23, 2016
Gainesville, Florida
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