FY13 Independent Audit HERITAGE GREENS
COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30,2013
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT 1-2
MANAGEMENT'S DISCUSSION AND ANALYSIS 3-6
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position 7
Statement of Activities 8
Fund Financial Statements:
Balance Sheet—Governmental Fund 9
Statement of Revenues, Expenditures and Changes in Fund Balance—
Governmental Fund 10
Notes to the Financial Statements 11-17
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes In Fund Balance—
Budget and Actual—General Fund 18
Notes to Required Supplementary Information 19
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS 20-21
MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550 OF THE RULES
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 22-23
2700 North Military Trail•Suite 350
Boca Raton, Florida 33431
Grau& Associates (561)994-9299•(800)299-4728
Fax (561)994-5823
CERTIFIED PUBLIC ACCOUNTANTS www.graucpa.com
INDEPENDENT AUDITOR'S REPORT
To the Board of Supervisors
Heritage Greens Community Development District
Collier County, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and the major fund of
Heritage Greens Community Development District,Collier County, Florida("District")as of and for the fiscal
year ended September 30,2013,and the related notes to the financial statements,which collectively comprise
the District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America;this includes 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.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit.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.Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements.The procedures selected depend on the auditor's judgment,including the assessment of
the risks of material misstatement of the financial statements,whether due to fraud or error.In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
control.Accordingly,we express no such opinion.An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion,the financial statements referred to above present fairly,in all material respects,the respective
financial position of the governmental activities and the major fund of the District as of September 30,2013,
and the respective changes in financial position thereof for the fiscal year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board,who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational,economic,or historical context.We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America,which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
managements responses to our inquiries,the basic financial statements,and other knowledge we obtained
during our audit of the basic financial statements.We do not express an opinion or provide any assurance on
the information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated March 28,2014,on
our consideration of the Districts internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations,contracts,grant agreements and other matters.The purpose of
that report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing,and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the District's intemal control over financial reporting and compliance.
detst.tt aaelOtt.61
March 28,2014
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
Our discussion and analysis of Heritage Greens Community Development District, Collier County, Florida
("District")provides a narrative overview of the District's financial activities for the fiscal year ended September
30, 2013. Please read it in conjunction with the District's Independent Auditor's Report, basic financial
statements,accompanying notes and supplementary information to the basic financial statements.
FINANCIAL HIGHLIGHTS
• The assets of the District exceeded its liabilities at the close of the most recent fiscal year resulting in
a net position balance of$2,721,025
• The change in the District's total net position in comparison with the prior fiscal year was($101,214),
a decrease. The key components of the District's net position and change in net position are reflected
in the table in the government-wide financial analysis section.
• At September 30,2013,the Districts govemmental funds reported combined ending fund balances of
$158,602, an increase of$26,544 in comparison with the prior fiscal year. A portion of the fund
balance is assigned to subsequent year's expenditures, and the remainder Is unassigned fund
balance which is available for spending at the District's discretion.
• During fiscal year 2013, the District implemented Governmental Accounting Standards Board
("GASB")Statement No.62,(Codification of Accounting and Financial Reporting Guidance Contained
in Pre-November 30, 1989 Financial Accounting Standards Board("FASB')and American Institute of
Certified Public Accountants ("AICPA") Pronouncements, GASB Statement No. 63, Financial
Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources,and Net Position,and
GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. Please see New
Accounting Standards Adopted in Note 2 of the financial statements for additional information.
OVERVIEW OF FINANCIAL STATEMENTS.
This discussion and analysis are intended to serve as the introduction to the District's basic financial
statements. The District's basic financial statements are comprised of three components: 1)government-wide
financial statements,2)fund financial statements,and 3)notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
1) Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
District's finances,in a manner similar to a private-sector business.
The statement of net position presents information on all the District's assets and liabilities with the residual
amount being reported as net position. Over time, increases or decreases in net position may serve as a
useful indicator of whether the financial position of the District is improving or deteriorating.
The statement of activities presents information showing how the government's net position changed during
the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs,regardless of the timing of related cash flows. Thus,revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods.
The government-wide financial statements include all governmental activities that are principally supported by
special assessment revenues.The District does not have any business-type activities. The governmental
activities of the District include the general government(management)and maintenance functions.
3
OVERVIEW OF FINANCIAL STATEMENTS(Continued)
2) Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The District,like other state and local governments,uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has
one fund category:governmental funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However,unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflow of
spendable resources,as well as on balances of spendable resources available at the end of the fiscal
year. Such information may be useful in evaluating a District's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so,readers may better understand the long-term impact of the District's near-term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
The District maintains one governmental fund for external reporting. Information is presented separately
in the governmental fund balance sheet and the governmental fund statement of revenues,
expenditures,and changes in fund balances for the general fund,which is a major fund.
The District adopts an annual appropriated budget for its general fund. A budgetary comparison
schedule has been provided for the general fund to demonstrate compliance with the budget.
3) Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements.
' GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier,net position may serve over time as a useful indicator of an entity's financial position.In the
case of the District,assets exceeded liabilities at the close of the most recent fiscal year.
Key components of the Districts net position are reflected in the following table:
NET POSITION
SEPTEMBER 30,
2013 2012
Assets,excluding capital assets $ 164,602 $ 139,882
Capital assets,net of depreciation 2,582,423 2,690,181
Total assets 2,727,025 2,830,063
Liabilities,excluding long-term liabilities 6,000 7,824
Total liabilities 6,000 7,824
Net position
Invested in capital assets 2,562,423 2,690,181
Unrestricted 158,602 132,058
Total net position $ 2,721,025 $ 2,822,239
4
GOVERNMENT-WIDE FINANCIAL ANALYSIS(Continued2
The Districts net position reflects its investment in capital assets (e.g. land, land improvements, and
infrastructure);less any related debt used to acquire those assets that is still outstanding. These assets are
used to provide services to residents; consequently, these assets are not available for future spending.
Although the District's investment in capital assets is reported net of related debt,it should be noted that the
resources needed to repay this debt must be provided from other sources,since the capital assets themselves
cannot be used to liquidate these liabilities.
The remaining balance of unrestricted net position may be used to meet the District's other obligations.
The District's net position decreased during the most recent fiscal year. The majority of the decrease
represents the extent to which the cost of operations and depreciation expense exceeded ongoing program
revenues.
Key elements of the change in net position are reflected in the following table:
CHANGES IN NET POSITION
FOR THE FISCAL YEAR END SEPTEMBER 30,
2013 2012
Revenues:
Program revenues $ 210,999 $ 210,818
General revenues 549 461
Total revenues 211,548 211,279
Expenses:
General government 69,041 64,057
Physical environment 243.721 232,062
Total expenses 312,762 296,119
Change in net position (101,214) (84,840)
Net position beginning 2,822,239 2,907,079
Net position ending $ 2,721,025 4=======$ 2,822,239
As noted above and in the statement of activities,the cost of all governmental activities during the fiscal year
ended September 30, 2013 was $312,762. The costs of the District's activities were primarily funded by
program revenues. Program revenues, comprised primarily of assessments, have remained relatively
constant.The increase in current fiscal year expenses is primarily the result of an increase in professional fees
as well as increase in Repair and Maintenance Drainage costs.
GENERAL BUDGETING HIGHLIGHTS
An operating budget was adopted and maintained by the governing board for the District pursuant to the
requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in
preparation of the fund financial statements. The legal level of budgetary control, the level at which
expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the
aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund
expenditures did not exceed appropriations for the fiscal year ended September 30,2013.
The variance between budgeted and actual general fund revenues for the 2013 fiscal year was not considered
significant. The actual general fund expenditures were lower than budgeted amounts due primarily to
anticipated repair and maintenance costs which were not required.
5
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At September 30,2013,the District had$4,656,757 invested in land,infrastructure,and improvements,for its
governmental activities. In the government-wide financial statements depreciation of$2,094,334 has been
taken,which resulted in a net book value of$2,562,423.More detailed information about the District's capital
assets is presented in the notes of the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND OTHER EVENTS
The District does not anticipate any major projects or significant changes to its infrastructure maintenance
program for the subsequent fiscal year. In addition,it is anticipated that the general operations of the District
will remain fairly constant.
CONTACTING THE DISTRICTS FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens,land owners,customers,investors and creditors with a
general overview of the District's finances and to demonstrate the District's accountability for the financial
resources it manages and the stewardship of the facilities it maintains. If you have questions about this report
or need additional financial information, contact the Heritage Greens Community Development District's
Finance Department at 210 N.University Drive,Suite 702,Coral Springs, Florida, 33071.
6
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30,2013
Governmental
Activities
ASSETS
Cash and cash equivalents $ 162,372
Investments 626
Due from other governments 1,604
Capital assets:
Nondepreciable 918,434
Depreciable, net 1,643,989
Total assets 2,727,025
LIABILITIES
Accounts payable 6,000
Total liabilities 6,000
NET POSITION
Invested in capital assets 2,562,423
Unrestricted 158,602
Total net position $ 2,721,025
See notes to the financial statements
7
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013
Net(Expense)
Program Revenue and
Revenues Changes in Net Position
Charges
for Governmental
Functions/Proarams Expenses Services Activities
Primary government:
Governmental activities:
General government $ 69,041 $ 69,041 $ -
Physical environment 243,721 141,958 (101,763)
Total governmental activities 312,762 210,9999 (101,763)
General revenues:
Unrestricted investment earnings 549
Total general revenues 549
Change in net position (101,214)
Net position-beginning 2,822,239
Net position-ending $ 2,721,025
See notes to the financial statements
8
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30,2013
Major
Governmental
Fund
General Fund
ASSETS
Cash and cash equivalents $ 162,372
Investments 626
Due from other governments 1,604
Total assets $ 164,602
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 6,000
Total liabilities 6,000
Fund balance:
Assigned to:
Subsequent year's expenditure 49,897
Future repairs and maintenance 64,987
Unassigned 43,718
Total fund balance 158,602
Total liabilities and fund balance $ 164,602
Amounts reported for governmental activities in the
statement of net position are different because:
Fund balance-governmental fund $ 158,602
Capital assets used in governmental activities
are not financial resources and,therefore,are not
reported as assets in the governmental funds. The
statement of net position includes those capital
assets, net of any accumulated depreciation,in the
net position of the government as a whole.
Cost of capital assets 4,656,757
Accumulated depreciation (2,094,334) 2,562,423
Net position of governmental activities $ 2,721,025
See notes to the financial statements
9
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
STATEMENT OF REVENUES,EXPENDITURES,
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013
Major
Governmental
Fund
General Fund
REVENUES
Assessments $ 210,021
Other revenues 978
Interest 549
Total revenues 211,548
EXPENDITURES
Current:
General government 69,041
Physical environment 115,963
Total expenditures 185,004
Excess of revenues
over expenditures 26,544
Fund balance-beginning 132,058
Fund balance-ending $ 158,602
Amounts reported for governmental activities in the statement
of activities are different because:
Net change in fund balances-governmental fund $ 26,544
Depreciation on capital assets is not recognized in the
governmental fund financial statement but is reported as
an expense In the statement of activities. (127,758)
Change in net position of governmental activities $ (101,214)
See notes to the financial statements
10
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY, FLORIDA
NOTES TO FINANCIAL STATEMENTS
NOTE 1 —NATURE OF ORGANIZATION AND REPORTING ENTITY
Heritage Greens Community Development District("District")was created on July 20,1993 by Ordinance 93-
39 of the Board of County Commissioners of Collier County, Florida, pursuant to the Uniform Community
Development District Act of 1980,otherwise known as Chapter 190,Florida Statutes.The Act provides among
other things,the power to manage basic services for community development, power to borrow money and
issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital
infrastructure.
The District was established for the purposes of financing and managing the acquisition, construction,
maintenance and operation of a portion of the infrastructure necessary for community development within the
District.
The District is governed by the Board of Supervisors ("Board"),which is composed of five members. The
Supervisors are elected by the owners of the property within the District. The Board of Supervisors of the
District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes.
The Board has the responsibility for:
1. Assessing and levying assessments.
2. Approving budgets.
3. Exercising control over facilities and properties.
4. Controlling the use of funds generated by the District.
5. Approving the hiring and firing of key personnel.
6. Financing improvements.
The financial statements were prepared in accordance with Governmental Accounting Standards Board
("GASB") Statement 14, Statement 39, and Statement 61. Under the provisions of those standards, the
financial reporting entity consists of the primary government, organizations for which the District Board of
Supervisors is considered to be financially accountable, and other organizations for which the nature and
significance of their relationship with the District are such that, if excluded, the financial statements of the
District would be considered incomplete or misleading. There are no entities considered to be component
units of the District;therefore,the financial statements include only the operations of the District.
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government-Wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements.
The government-wide financial statements(i.e.,the statement of net position and the statement of activities)
report information on all of the non-fiduciary activities of the primary government. For the most part,the effect
of interfund activity has been removed from these statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include 1) charges to customers who purchase, use, or directly
benefit from goods,services,or privileges provided by a given function or segment; operating-type special
assessments for maintenance and debt service are treated as charges for services and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
segment. Other items not included among program revenues are reported instead as general revenues.
11
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
Measurement Focus.Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when
a liability is incurred,regardless of the timing of related cash flows. Assessments are recognized as revenues
in the year for which they are levied. Grants and similar items are to be recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable
and available. Revenues are considered to be available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period. For this purpose,the government considers
revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures are recorded when a liability is incurred,as under accrual accounting. However,debt service
expenditures are recorded only when payment is due.
Assessments
Assessments are non-ad valorem assessments on benefited lands within the District.Assessments are levied
to pay for the operations and maintenance of the District. The fiscal year for which annual assessments are
levied begins on October 1 with discounts available for payments through February 28 and become delinquent
on April 1.The District's annual assessments for operations and debt service are billed and collected by the
County Tax Assessor/Collector. The amounts remitted to the District are net of applicable discounts or fees
and include interest on monies held from the day of collection to the day of distribution.
Assessments and interest associated with the current fiscal period are considered to be susceptible to accrual
and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.
The District reports the following major governmental fund:
General Fund
The general fund is the general operating fund of the District. It is used to account for all financial resources
except those required to be accounted for in another fund.
When both restricted and unrestricted resources are available for use, it is the government's policy to use
restricted resources first for qualifying expenditures,then unrestricted resources as they are needed.
New Accountina Standards Adopted
During fiscal year 2013,the District adopted two new accounting standards as follows:
GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-
November 30, 1989 FASB and AICPA Pronouncements
This Statement incorporates into the GASB's authoritative literature certain guidance that previously could only
be found in certain FASB and AICPA pronouncements issued on or before November 30,1989 and eliminates
the selection to apply post-November 30, 1989 FASB pronouncements that do not conflict with or contradict
GASB pronouncements.
GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position
. 12
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
New Accounting Standards Adopted(Continued)
This Statement provides financial reporting guidance for deferred outflows of resources and deferred inflows of
resources and identifies net position as the residual of all other elements presented in a statement of financial
position.This Statement amends the net asset reporting requirements by Incorporating deferred outflows of
resources and deferred inflows of resources(previously reported as assets and liabilities)into the definitions of
the required components of the residual measure and by renaming that measure as net position,rather than
net assets.
GASB Statement No.65,Items Previously Repotted as Assets and Liabilities
This Statement establishes accounting and financial reporting standards that reclassify,as deferred outflows
of resources or deferred inflows of resources, certain Items that were previously reported as assets and
liabilities and recognizes,as outflows of resources or inflows of resources,certain items that were previously
reported as assets and liabilities.
Assets,Liabilities and Net Position or Equity
Deposits and Investments
The District's cash and cash equivalents are considered to be cash on hand and demand deposits(interest
and non-interest bearing).
The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section 218.415
(17)Florida Statutes. The District may invest any surplus public funds in the following:
a) The Local Government Surplus Trust Funds,or any intergovernmental investment pool authorized
pursuant to the Florida Interlocal Cooperation Act;
b) Securities and Exchange Commission registered money market funds with the highest credit quality
rating from a nationally recognized rating agency;
c) Interest bearing time deposits or savings accounts in qualified public depositories;
d) Direct obligations of the U.S.Treasury.
Securities listed in paragraphs c and d shall be invested to provide sufficient liquidity to pay obligations as they
come due. In addition,surplus funds may be deposited into certificates of deposit which are insured.
The District records all interest revenue related to investment activities in the respective funds and reports
investments at fair value.
Capital Assets
Capital assets,which include property,plant and equipment,and infrastructure assets(e.g.,roads,sidewalks
and similar items) are reported in the government activities columns in the government-wide financial
statements. For financial statement reporting purposes, capital assets are defined by the government as
assets with an initial,individual cost of more than$5,000(amount not rounded)and an estimated useful life in
excess of two years. Such assets are recorded at historical cost or estimated historical cost If purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed.
13
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
Assets.Liabilities and Net Assets or Equity(Continued)
Capital Assets(Continued)
Property,plant and equipment of the District are depreciated using the straight-line method over the following
estimated useful lives:
Assets Years
Improvements other than buildings 10-20
Infrastructure 20-30
In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are
reported as fund expenditures. Depreciation expense is not reported in the governmental fund financial
statements.
Deferred Outflows/Inflows of Resources
The statement of net position reports,as applicable, a separate section for deferred outflows of resources.
Deferred outflows of resources represent a consumption of net position that applies to future reporting
period(s)and so will not be recognized as an outflow of resources(expense/expenditure)until that time.For
example, the District would record deferred outflows of resources related to debit amounts resulting from
current and advance refundings resulting in the defeasance of debt(i.e.when there are differences between
the reacquisition price and the net carrying amount of the old debt).
The statement of net position reports, as applicable, a separate section for deferred inflows of resources.
Deferred inflows of resources represent an acquisition of net position that applies to future reporting period(s)
and so will not be recognized as an inflow of resources(revenue)until that time.For example,when an asset
is recorded in the governmental fund financial statements,but the revenue is not available,the District reports
a deferred inflow of resources until such times as the revenue becomes available.
Fund Eauitv/Net Position
In the fund financial statements,governmental funds report non spendable and restricted fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific
purpose. Assignments of fund balance represent tentative management plans that are subject to change.
The District can establish limitations on the use of fund balance as follows:
Committed fund balance—Amounts that can be used only for the specific purposes determined by a formal
action(resolution)of the Board of Supervisors.Commitments may be changed or lifted only by the Board of
Supervisors taking the same formal action(resolution)that imposed the constraint originally. Resources
accumulated pursuant to stabilization arrangements sometimes are reported in this category.
Assigned fund balance — Includes spendable fund balance amounts established by the Board of
Supervisors that are intended to be used for specific purposes that are neither considered restricted nor
committed. The Board may also assign fund balance as it does when appropriating fund balance to cover
differences in estimated revenue and appropriations in the subsequent year's appropriated budget.
Assignments are generally temporary and normally the same formal action need not be taken to remove
the assignment.
The District first uses committed fund balance,followed by assigned fund balance and then unassigned fund
balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund
balance classifications could be used.
14
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
Assets.Liabilities and Net Assets or Eauitv(Continued)
Fund Eauitv/Net Position(Continued)
Net position is the difference between assets and deferred outflows of resources less liabilities and deferred
inflows of resources. Net position in the government-wide financial statements are categorized as net
investment in capital assets,restricted or unrestricted. Net investment in capital assets represents net position
related to infrastructure and property, plant and equipment. Restricted net position represents the assets
restricted by the District's Bond covenants or other contractual restrictions.Unrestricted net position consists
of the net position not meeting the definition of either of the other two components.
Other Disclosures
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenditures during the reporting period. Actual results could differ from those
estimates.
NOTE 3—BUDGETARY INFORMATION
The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are
adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual
appropriations lapse at fiscal year end.
The District follows these procedures in establishing the budgetary data reflected in the financial statements.
a) Each year the District Manager submits to the District Board a proposed operating budget for the fiscal
year commencing the following October 1.
b) Public hearings are conducted to obtain public comments.
c) Prior to October 1,the budget is legally adopted by the District Board.
d) All budget changes must be approved by the District Board.
e) The budgets are adopted on a basis consistent with generally accepted accounting principles.
f) Unused appropriation for annually budgeted funds lapse at the end of the year.
NOTE 4—DEPOSITS AND INVESTMENTS
Deposits
The District's cash balances were entirely covered by federal depository insurance or by a collateral pool
pledged to the State Treasurer. Florida Statutes Chapter 280, "Florida Security for Public Deposits Act",
requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral
equal to various percentages of the average daily balance for each month of all public deposits in excess of
any applicable deposit insurance held. The percentage of eligible collateral(generally, U.S. Governmental
and agency securities,state or local government debt, or corporate bonds)to public deposits is dependent
upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a
qualified public depository,the remaining public depositories would be responsible for covering any resulting
losses.
15
•
NOTE 4—DEPOSITS AND INVESTMENTS(Continued)
investments
The District's investments were held as follows at September 30,2013:
Investment Fair Value Credit Risk Maturity
Weighted average of the
Florida PRIME $ 454 S&P AAAm fund portfolio:44 days
Investment in Fund B Surplus Weighted average life of
Funds Trust Fund 172 N/A fund:4.04 years
Total Investments $ 626
Credit risk—For investments,credit risk is generally the risk that an issuer of an investment will not fulfill its
obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Investment ratings by investment type are included in the preceding
summary of investments.
Concentration risk—The District places no limit on the amount the District may invest in any one issuer.
Interest rate risk—The District does not have a formal policy that limits investment maturities as a means of
managing exposure to fair value losses arising from Increasing interest rates.
NOTE 5—CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30,2013 was as follows:
Beginning
Balance Additions Reductions Ending Balance
Governmental activities
Capital assets,not being depreciated
Land and land improvements $ 918,434 $ - $ - $ 918,434
Total capital assets,not being depreciated 918,434 - 918,434
Capital assets,being depreciated
Improvements other than buildings 355,508 - - 355,508
Infrastructure 3,382,817 3,382,817
Total capital assets,being depreciated 3,738,323 3,738,323
Less accumulated depreciation for:
Improvements other than buildings 299,084 9,358 - 308,442
Infrastructure 1,667,492 118,400 1,785,892
Total accumulated depreciation 1,988,576 127,758 - 2,094,334
Total capital assets,being depreciated,net 1,771,747 (127,758) - 1,643,989
Governmental activities capital assets,net $ 2,690,181 $ (127,758) $ - $ 2,562,423
Depreciation expense was charged to the physical environment function.
16
NOTE 6—MANAGEMENT COMPANY
The District has contracted with a management company to perform management advisory services,which
include financial and accounting services. Certain employees of the management company also serve as
officers of the District. Under the agreement, the District compensates the management company for
management,accounting,financial reporting,computer and other administrative costs.
NOTE 7—RISK MANAGEMENT
The District is exposed to various risks of loss related to torts;theft of,damage to,and destruction of assets;
errors and omissions;and natural disasters.The District has obtained commercial insurance from independent
third parties to mitigate the costs of these risks;coverage may not extend to all situations.Settled claims from
these risks have not exceeded commercial insurance coverage over the past three years.
17
•
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY, FLORIDA
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCE-BUDGET AND ACTUAL—GENERAL FUND
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2013
Variance
with Final
Budget-
Budgeted Actual Positive
Amounts Amounts (Negative)
REVENUES
Assessments $ 209,188 $ 210,021 $ 833
Other revenue - 978 978
Interest 400 549 149
Total revenues 209,588 211,548 1.960
EXPENDITURES
Current:
General government 68,310 69,041 (731)
Physical environment 141,278 115,963 25,315
Total expenditures 209,588 185,004 24,584
Excess(deficiency)of revenues
over(under)expenditures $ - 26,544 $
Fund balance-beginning 132,058
Fund balance-ending $ 158,602
•
See notes to required supplementary information
18
HERITAGE GREENS COMMUNITY DEVELOPMENT DISTRICT
COLLIER COUNTY,FLORIDA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
The District is required to establish a budgetary system and an approved Annual Budget for the general fund.
The Districts budgeting process is based on estimates of cash receipts and cash expenditures which are
approved by the Board. The budget approximates a basis consistent with accounting principles generally
accepted in the United States of America(generally accepted accounting principles).
The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the
aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved
by the Board of Supervisors. Actual general fund expenditures did not exceed appropriations for the fiscal
year ended September 30,2013.The actual general fund expenditures for the 2013 fiscal year were lower
than budgeted amounts due primarily to anticipated costs which were not incurred in the current fiscal year.
The variance between budgeted and actual general fund revenues for the 2013 fiscal year was not considered
significant. The actual general fund expenditures for the current fiscal year were lower than budgeted
amounts due primarily to anticipated costs which were not incurred in the current fiscal year.
19
2700 North Military Trail•Suite 350
Boca Raton, Florida 33431
Grau& Associates (561)994-9299•(800)299-4728
CO Fax (561)994-5823
CERTIFIED PUBLIC ACCOUNTANTS www.graucpa.com
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
To the Board of Supervisors
Heritage Greens Community Development District
Collier County, Florida
We have audited, in accordance with the 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,the financial statements of the governmental activities and
the major fund of Heritage Greens Community Development District,Collier County,Florida("District")as of
and for the fiscal year ended September 30,2013, and the related notes to the financial statements,which
collectively comprise the District's basic financial statements, and have issued our opinion thereon dated
March 28,2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements,we considered the District's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances 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 District's internal control.Accordingly,we do not express
an opinion on the effectiveness of the District's internal control.
A deficiency 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 material weakness is a deficiency, or a 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.A significant deficiency is a
deficiency,or a combination of deficiencies,in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or,
significant deficiencies.Given these limitations,during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However,material weaknesses may exist that have not
been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit,and accordingly,we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
20
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of Internal control and compliance and
the results of that testing,and not to provide an opinion on the effectiveness of the entity's internal control or
on compliance.This report is an integral part of an audit performed In accordance with Government Auditing
Standards In considering the entity's internal control and compliance.Accordingly,this communication is not
suitable for any other purpose.
4
March 28,2014
21
2700 North Military Trail•Suite 350
Boca Raton, Florida 33431
Grau& Associates (561)994-9299•(800)299-4728
CI) Fax (561)994-5823
CERTIFIED PUBLIC ACCOUNTANTS www.graucpa.com
MANAGEMENT LETTER PURSUANT TO THE RULES OF
THE AUDITOR GENERAL FOR THE STATE OF FLORIDA
To the Board of Supervisors
Heritage Greens Community Development District
Collier County, Florida
We have audited the accompanying basic financial statements of Heritage Greens Community Development
District,Collier County,Florida("District")as of and for the fiscal year ended September 30,2013,and have
issued our report thereon dated March 28,2014.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; Government Auditing Standards, issued by the Comptroller General of the United States; and
Chapter 10.550,Rules of the Florida Auditor General. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement.
In addition,we have issued our Independent Auditor's Report on Internal Control over Financial Reporting and
Compliance and Other Matters based on an audit of the financial statements performed in accordance with
Government Auditing Standards and Chapter 10.550, Rules of the Florida Auditor General dated March 28,
2014. Disclosures in that report should be considered in conjunction with this management letter.
The purpose of this letter is to comment on those matters required by Chapter 10.550 of the Rules of the
Auditor General for the State of Florida. Accordingly,in connection with our audit of the financial statements of
the District,as described in the first paragraph,we report the following:
I. Current year findings and recommendations.
II. Status of prior year findings and recommendations.
III. Compliance with the Provisions of the Auditor General of the State of Florida.
Our management letter is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General,
Federal and other granting agencies,as applicable,management,and the Board of Supervisors of Heritage
Greens Community Development District,Collier County,Florida and is not intended to be and should not be
used by anyone other than these specified parties.
We wish to thank Heritage Greens Community Development District,Collier County,Florida and the personnel
associated with it,for the opportunity to be of service to them in this endeavor as well as future engagements,
and the courtesies extended to us.
3641A-11 &24fre42444a.__
March 28,2014
22
REPORT TO MANAGEMENT
I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None
II. PRIOR YEAR FINDINGS AND RECOMMENDATIONS
None
III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA
Unless otherwise required to be reported in the auditor's report on compliance and internal controls,the
management letter shall include, but not be limited to the following:
1. A statement as to whether or not corrective actions have been taken to address findings and
recommendations made in the preceding annual financial audit report.
There were no significant findings and recommendations made in the preceding annual financial
audit report for the fiscal year ended September 30,2012.
2. A statement as to whether or not the local governmental entity complied with Section 218.415,
Florida Statutes,regarding the investment of public funds.
The District complied with Section 218.415, Florida Statutes, regarding the investment of public
funds.
3. Any recommendations to improve the local governmental entity's financial management.
There were no such matters discovered by, or that came to the attention of, the auditor, to be
reported for the fiscal year ended September 30,2013.
4. Noncompliance with provisions of contracts or grant agreements,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 which warrants the attention of those charged with governance.
There were no such matters discovered by, or that came to the attention of, the auditor, to be
reported,for the fiscal year ended September 30,2013.
5. The name or official title and legal authority of the District are disclosed in the notes to the financial
statements.
6. The financial report filed with the Florida Department of Financial Services pursuant to Section
218.32(1)(a), Florida Statutes agrees with the September 30,2013 financial audit report.
7. The District has not met one or more of the financial emergency conditions described in Section
218.503(1), Florida Statutes.
8. We applied financial condition assessment procedures pursuant to Rule 10.556(7) and no
deteriorating financial conditions were noted as of September 30, 2013. It is management's
responsibility to monitor financial condition,and our financial condition assessment was based in part
on representations made by management and the review of financial information provided by same.
23