Fort Walton Beach Council agenda — 03-19-12--special--audit — reading text

QC Honorable Mayor and City Council Members i City of Fort Walton Beach, Florida c REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN svmnE U ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS N ON We have audited the financial statements of governmental activities, the business -type activities, each major fund, LL and the aggregate remaining fund information of the City of Fort Walton Beach, Florida, as of and for the year ended September 30, 2012, which collectively comprise the City of Fort Walton Beach' s basic financial statements and have issued our report thereon dated March 5, 2013. 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 Gnvernmeni Auditing Standards, issued by the Comptroller General of the United States. Internal Co t of over Financial Reporting Management of City of Fort Walton Beach, Florida , is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the City of Fort Walton Beach, Florida's internal control over financial reporting as a basis for designing our auditing procedures 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 City of Fort Walton Beach, Florida' s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City' s internal control over financial reporting. A defrciencv 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 molerial weakness is a deficiency, or 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. Our consideration of internal control over financial reporting was for the limited purpose described in the fast paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 122 Paaet P060 ,  3. t. a Honorable Mayor and City Council Members City of Fort Walton Beach, Florida 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 ( Continued) t0aYm m Compliance and Other Matters a As part of obtaining reasonable assurance about whether the City of Fort Walton Beach' s financial statements arc free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, a contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on complianceThewith those results of c provisions was not an objective of our audit, and accordingly, we do no[ express such an opinion 0 our tests disclosed no instances of noncompliance or other matters that are required to be reported under m Government Auditing Standards. c 0 We noted certain matters that we reported to management of the City of Fort Walton Beach in a separate letter dated March 5, 2013. o-E 0 7his report is intended solely for the information and use of the Audit Committee, Management, others within the organization, and City Council, and is not intended to be and should not be used by anyone other than these n04 specified parties. N March 5. 2013 123 RaAkeRR9. 1 1`  3. t. a WARREN AVERETT USULLNAN CREEL A Business of Warren Asarco, LLC I CPAs & Consultants 5 L6iio N , -. N lc Lr' I g =.ir.. a41SY.'1 w. warrenaverettccm Honorable Mayor and City Council Members City of Fort Walton Beach, Florida MANAGEMENT LETTER We have audited the financial statements of the City of Fort Walton Beach, Florida, as of and for the fiscal year ended September 30, 2012, and have issued our report thereon dated March 5, 2013. 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. 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 Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in this report, which is dated March 5, 2013, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10. 550, Rides of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor' s report: Section 10. 554( l)( i) I., 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 annual financial report. There were no significant findings in the preceding financial report. Section 10. 554( 1)( i) 2, Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218 415, Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the City of Fort Walton Beach, Florida, complied with Section 218. 415, Florida Statutes. Section 10. 554( 1)( 1) 3., Rules of Auditor General, requires that we address in the management letter any recommendations to improve financial management. Our comments and recommendations are reported under the heading " Current Year Comments." Section 10. 554( I)( i) 4., Rules ofAuditor General, requires that we address violations of provisions of contracts or grant agreements, fraud, illegal acts, 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 more than inconsequential. In connection with our audit, we did not have any such findings. 124 pkef(Pg 62  3. t. a Honorable Mayor and City Council Members City of Fort Walton Beach, Florida Management Letter ( Continued) Section 10. 554( 1)( i) 5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on the financial statements, considering both quantitative and qualitative factors: ( 1) violations of provisions of contracts or grant agreements, fraud, illegal acts or abuse, and ( 2) deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did not have any such findings. Section 10. 554( I)( i) 6., 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. The City of Fort Walton Beach, Florida, was established as a municipality by a Special Act of the Florida Legislature in 1937. The City's original charter was enacted as Chapter 18539, Laws of Florida. The present charter was enacted in 1953 as Chapter 29093, Laws of Florida. The City of Fort Walton Beach, Florida, had one component unit within its reporting entity. The Fort Walton Beach Community Redevelopment Agency was created pursuant to provisions of Chapter 163, Part 111, Florida Statutes. This action, adopted by Resolution Number 77 -38, also outlines the rights, powers, duties, privileges, and immunities invested in the goveming body. City ordinance 1262, adopted on September 27, 1994, gave the City Council the authority to appoint an independent Board of Commissioners in place of the City Council effective January I, 1995.