HomeMy Public PortalAboutLTC 127-2016 Comprehensive Annual Financial Report (CAFR)Marcum LLP n One Southeast Third Avenue n Suite 1100 n Miami, Florida 33131 n Phone 305.995.9600 n Fax 305.995.9601 n www.marcumllp.com
June 29, 2016
To the Honorable Mayor, Village Council and Village Manager
Bal Harbour Village
655 96th Street
Bal Harbour, FL 33154
We have audited the financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of Bal Harbour Village, Florida (The
Village) for the year ended September 30, 2015. Professional standards require that we provide you with
information about our responsibilities under generally accepted auditing standards and Government
Auditing Standards, as well as certain information related to the planned scope and timing of our audit
and the following information related to our audit.
Our Responsibilities under U.S. Generally Accepted Auditing Standards and Government Auditing
Standards
As stated in our engagement letter dated November 27, 2013, our responsibility, as described by
professional standards, was to express opinions about whether the financial statements prepared by
management with your oversight are fairly presented, in all material respects, in conformity with U.S.
generally accepted accounting principles. Our audit of the financial statements does not relieve you or
management of your responsibilities.
As part of our audit, we considered the internal control of the Village. Such considerations are solely for
the purpose of determining our audit procedures and not to provide any assurance concerning such
internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the Village’s compliance with certain provisions of laws,
regulations, contracts, and grants. However, the objective of our tests was not to provide an opinion on
compliance with such provisions.
Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that
the financial statements are free of material misstatement.
We are responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures specifically to identify such matters.
Planned Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to in our
meeting about planning matters on December 21, 2015.
To the Honorable Mayor, Village Council and Village Manager
Bal Harbour Village
June 29, 2016
Page 2
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit will involve judgment about the number of transactions to be
examined and the areas to be tested.
Our audit will include obtaining an understanding of the entity and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing, and extent of further audit procedures. Material misstatements may result from (1)
errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or
governmental regulations that are attributable to the entity or to acts by management or employees
acting on behalf of the entity. We will generally communicate our significant findings at the conclusion
of the audit. However, some matters could be communicated sooner, particularly if significant
difficulties are encountered during the audit where assistance is needed to overcome the difficulties or if
the difficulties may lead to a modified opinion. We will also communicate any internal control related
matters that are required to be communicated under professional standards.
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 Village are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of existing policies was not changed during the
year except for the City implementing Governmental Accounting Standards Board (GASB) Statement
No. 68, Accounting and Financial Reporting for Pensions-an amendment for GASB Statement No. 27,
and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the
Measurement Date—an amendment of GASB Statement No. 68 during the fiscal year under audit. We
noted no transactions entered into by the City 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 estimate affecting the financial statements was:
Management’s estimate of the net pension liability in accordance with GASB Statement
No. 68 is based on actuarial methods and assumptions used by the actuary for the
development of the funding valuation as well as the accounting valuation. The key factors
impacting the assumptions, such as change in market conditions, are subject to change on
an annual basis therefore and can have a significant impact on this estimate. We evaluated
the key factors and assumptions used to develop the estimate described above, in
determining that it is reasonable in relation to the financial statements taken as a whole.
To the Honorable Mayor, Village Council and Village Manager
Bal Harbour Village
June 29, 2016
Page 3
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosure affecting the financial statements was:
The new disclosures of and reporting required by GASB Statement No. 68 Accounting
and Financial Reporting For Pensions, an Amendment of GASB Statement No. 27.
The financial statement disclosures are neutral, consistent, and clear.
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 clearly trivial, and communicate them to the appropriate level of
management. Management has corrected all such misstatements. In addition, none of the misstatements
detected as a result of audit procedures and corrected by management were material, either individually
or in the aggregate, to each opinion unit’s financial statements taken as a whole. There were no
uncorrected misstatements.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s 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 29, 2016.
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 auditor’s 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.
To the Honorable Mayor, Village Council and Village Manager
Bal Harbour Village
June 29, 2016
Page 4
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 Management’s Discussion and Analysis and the Required
Supplementary Information, which are required supplementary information (RSI) that 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 combining fund financial statements, 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 have not been engaged to report on the introductory and statistical sections, which accompany the
financial statements but are not RSI. Our responsibility with respect to this other information in
documents containing the audited financial statements and auditors’ report does not extend beyond the
financial information identified in the report. We have no responsibility for determining whether this
other information is properly stated. This other information will not be audited and we will not express
an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the use of the Mayor, Village Council, Village Manager and
management of Bal Harbour Village and is not intended to be, and should not be, used by anyone other
than these specified parties.
Very truly yours,
Marcum LLP