Amended Item 2C- FY 2016 Audit ReportSTAFF REPORT
. City of Atlantic Beach
Commission Meeting
Aug. 14, 2017
AGENDA ITEM: FY 2016 Audit Report-Ron Whiteside of Purvis, Gray & Co .
DATE: Aug. 9 , 2017
SUBMITTED BY: Russell Caffey, Finance Director ~Y
BACKGROUND: The City of Atlantic Beach retained Purvis, Gray & Co. to conduct the audit
of the City's Financial Statements for the fiscal year ending Sept. 30, 2016.
ATTACHMENTS: 1. City of Atlantic Beach Representation Letter
2 . City of Atlantic Beach Financial Statements FY16-available online at
http :/ /weblink .coab .us/W ebLink8 /0/fol/73 5791 /Row l .aspx
REVIEWED BY CITY MANAGER:
Amended Agenda Item 2C
August 14, 2017
August7,2017
Purvis, Gray and Company , LLP
P.O. Box 141270
Gainesville, FL 32614
City of Atlantic Beach
800 Seminole Road
Atlantic Beach , Florida 32233 -5445
Telephone (904) 247-5800
Fax (904) 247-5819
http://www .coab. us
This representation letter is provided in connection with your audits of the financial statements of the City of
Atlantic Beach, FL (the City), which comprise the respective financ ial position of the governmental activi ties, the
business-type activities, each major fund, and the aggregate remaining fund information as of September 30 ,
2016 and 2015, and the respective changes in financial position and, where applicable , cash flows for the years
then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to
whether the financial statements are presented fairly , in all material respects , in accordance with accounting
principles generally accepted in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. Items are
considered material , regardless of size, if they involve an omission or misstatement of account ing information that,
in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the
information would be changed or influenced by the omission or misstatement. An omission or misstatement that is
monetarily small in amount could be considered material as a result of qualitative factors
We confirm, to the best of our knowledge and belief, as of August 8, 2017, the following representations made to
you during your audit.
Financial Statements
1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated September
16, 2016, including our responsibility for the preparation and fair presentat ion of the financial statements in
accordance with U.S. GAAP and for preparation of the supplementary information in accordance with the
applicable criteria .
2) The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all
properly classified funds and other financial information of the primary government and all component units
required by generally accepted accounting principles to be included in the financial reporting entity.
3) We acknowledge our respons ibility 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.
4) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to
prevent and detect fraud .
5) Significant assumptions we used in making account ing estimates, including those measured at fair value, are
reasonable.
6) Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers,
leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been
appropriately accounted for and disclosed in accordance with U.S. GAAP.
7) Adjustments or disclosures have been made for all events , including instances of noncompl iance, subsequent
to the date of the financial statements that would require adjustment to or disclosure in the financial
statements.
8) The effects of all known actual or possible litigation, claims, and assessments have been accounted for and
disclosed in accordance with U.S . GAAP.
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9) Guarantees, whether written or oral, under which the City is contingently liable, if any, have been properly
recorded or disclosed.
Information Provided
1 0) We have provided you with:
a) Access to all information, of which we are aware, that is relevant to the preparation and fair presentation
of the financial statements, such as records, documentation, and other matters and all audit or relevant
monitoring reports, if any, received from funding sources.
b) Additional information that you have requested from us for the purpose of the audit.
c) Unrestricted access to persons within the City from whom you determined it necessary to obtain audit
evidence.
d) Minutes of the meetings of the City Commission or summaries of actions of recent meetings for which
minutes have not yet been prepared.
11) All material transactions have been recorded in the accounting records and are reflected in the financial
statements.
12) We have disclosed to you the results of our assessment of the risk that the financial statements may be
materially misstated as a result of fraud.
13) We have no knowledge of any fraud or suspected fraud that affects the City and involves-
• Management,
• Employees who have significant roles in internal control, or
• Others where the fraud could have a material effect on the financial statements.
14) We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial statements
communicated by employees, former employees, regulators, or others.
15) We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws,
regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing
financial statements.
16) We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects
should be considered when preparing the financial statements.
17) We have disclosed to you the identity of the City's related parties and all the related party relationships and
transactions of which we are aware.
Government-specific
18) There have been no communications from regulatory agencies concerning noncompliance with, or
deficiencies in, financial reporting practices.
19) We have a process to track the status of audit findings and recommendations.
20) We have identified to you any previous audits, attestation engagements, and other studies related to the audit
objectives and whether related recommendations have been implemented.
21) We have provided our views on reported findings, conclusions, and recommendations, as well as our planned
corrective actions, for the report.
22) The City has no plans or intentions that may materially affect the carrying value or classification of assets,
liabilities, or equity.
23) We are responsible for compliance with the laws, regulations, and provisions of contracts and grant
agreements applicable to us, including tax or debt limits and debt contracts, and legal and contractual
provisions for reporting specific activities in separate funds.
24) We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of
fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the
financial statements or other financial data significant to the audit objectives, and any other instances that
warrant the attention of those charged with governance.
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25) We have identified and disclosed to you all instances, which have occurred or are likely to have occurred, of
noncompliance with provisions of contracts and grant agreements that we believe have a material effect on
the determination of financial statement amounts or other financial data significant to the audit objectives.
26) We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of
abuse that could be quantitatively or qualitatively material to the financial statements or other financial data
significant to the audit objectives.
27) There are no violations or possible violations of budget ordinances, laws and regulations (including those
pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax
or debt limits, and any related debt covenants whose effects should be considered for disclosure in the
financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance .
28) As part of your audit, you assisted with preparation of the financial statements and related notes and provided
assistance with the GASB 68 journal entries. We acknowledge our responsibility as it relates to those
nonaudit services, including that we assume all management responsibilities; oversee the services by
designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or
experience; evaluate the adequacy and results of the services performed; and accept responsibility for the
results of the services. We have reviewed, approved, and accepted responsibility for those financial
statements and related notes.
29) The City has satisfactory title to all owned assets (other than debt financed assets), and there are no liens or
encumbrances on such assets nor has any asset been pledged as collateral.
30) The City has complied with all aspects of contractual agreements that would have a material effect on the
financial statements in the event of noncompliance.
31) The financial statements include all component units as well as joint ventures with an equity interest, and
properly disclose all other joint ventures and other related organizations.
32) The financial statements properly classify all funds and activities in accordance with GASB St ateme nt No . 34 .
33) All funds that meet the quantitative criteria in GASBS Nos . 34 and 37 for presentation as major are identified
and presented as such and all other funds that are presented as major are particularly important to financial
statement users.
34) Components of net position (net investment in capital assets; restricted; and unrestricted) and classifications
of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and,
if applicable, approved.
35) Investments, derivative instruments, and land and other real estate held by endowments are properly valued .
36) Provisions for uncollectible receivables have been properly identified and recorded.
37) Expenses have been appropriately classified in or allocated to functions and programs in the statement of
activities, and allocations have been made on a reasonable basis.
38) Revenues are appropriately classified in the statement of activities within program revenues, general
revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
39) lnterfund, internal, and intra-entity activity and balances have been appropriately classified and reported.
40) Deposits and investment securities and derivative instruments are properly classified as to risk and are
properly disclosed.
41) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if
applicable, depreciated.
42) We have appropriately disclosed the City's policy regarding whether to first apply restricted or unrestricted
resources when an expense is incurred for purposes for which both restricted and unrestricted net position is
available and have determined that net position is properly recognized under the policy.
43) We are following our established accounting policy regarding which resources (that is, restricted, committed,
assigned, or unassigned) are considered to be spent first for expenditures for which more than one resource
classification is available. That policy determines the fund balance classifications for financial reporting
purposes.
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August 14, 2017
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44) We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured
and presented within prescribed guidelines and the methods of measurement and presentation have not
changed from those used in the prior period. We have disclosed to you any significant assumptions and
interpretations underlying the measurement and presentation of the RSI.
45) With respect to the supplementary information (as described in the table of contents in the financial
statements):
a) We acknowledge our responsibility for presenting the supplementary information in accordance with
accounting principles generally accepted in the United States of America, and we believe the
supplementary information, including its form and content, is fairly presented in accordance with
accounting principles generally accepted in the United States of America. The methods of measurement
and presentation of the supplementary information have not changed from those used in the prior period ,
and we have disclosed to you any significant assumptions or interpretations underlying the measurement
and presentation of the supplementary information.
b) If the supplementary information is not presented with the audited financial statements, we will make the
audited financial statements readily available to the intended users of the supplementary information no Slgnatu::ter th ~:~ementar:11:::t::ion ant~~~ thereon.
Kevin Hogencamp Russell J. Caffey
Interim -City Manager Director of Finance
Amended Agenda Item 2C
August 14, 2017