Resolution 2006-109
COLLER COUNTY RESOLUTION NO: 06 - 109
TO JOINT LEGISLATIVE COMMITTEE OF THE STATE LEGISLATURE
WHEREAS, Pursuant to Florida Statutes, Sections 218.39, 11.45(7), 11.47, and Section
10.557(3), Rules of the Auditor Generalfor Local Governmental Entity Audits, Collier County
Government is to provide a 2005 audit for submission to the State of Florida Office of the
Auditor General or face statutory and budgetary penalties; and
WHEREAS, the Clerk of Courts for Collier County, as ex officio clerk and accountant to
the Collier County Board of County Commissioners, has the obligation, pursuant to the above-
stated statutory provisions and rule to provide a management representation letter in connection
with the annual audit of the County's records performed by KPMG, LLP; and
WHEREAS, the County Manager for Collier County Government has signed and
executed a management representation letter in a form acceptable to the County's independent
certified public accounting firm ofKPMG, LLP for the 2005 audit, (a copy of the letter is
attached hereto as Exhibit "A"), ; and
WHEREAS, the Clerk of Courts for Collier County, as ex officio clerk and accountant to
the Collier County Board of County Commissioners, has sent an alternative letter to the County's
independent certified public accounting firm ofKPMG, LLP for the 2005 audit, (a copy is
attached hereto as Exhibit "B"), that is equivocal and contains many unsupported and disputed
allegations that will result in a disclaimer of opinion on the 2005 audit for Collier County being
issued by KPMG, LLP., the County's independent certified public accounting firm; and
WHEREAS, the actions of the Clerk of Courts for Collier County as ex officio clerk and
accountant to the Collier County Board of County Commissioners, will result in harm to the
Collier County taxpayers by adversely impacting the County's credit rating and the County's
ability to continue to receive state and federal revenue sharing funds;
NOW THEREFORE, IT IS HEREBY RESOLVED:
1. The Collier County Board of County Commissioners, as the executive and legislative
governing body of Collier County, does hereby invoke, inter alia, the applicable provisions of
Florida Statutes, Chapter 11.011 et seq., including, without limitation, Section 11.45(6); and
requests the assistance of the Joint Legislative Auditing Committee of the Florida Legislature to
direct the State of Florida Office of the Auditor General to aid in this matter; and
2. The Collier County Board of County Commissioners, as the executive and legislative
governing body of Collier County, does hereby respectfully request the Joint Legislative
Auditing Committee of the Florida Legislature to direct the State of Florida Office of the Auditor
General to conduct an audit of the procedure utilized by the Clerk of Courts in the issuance of his
version of the Collier County 2005 management representation letter for KPMG, LLP; and
3. The Collier County Board of County Commissioners, as the executive and legislative
governing body of Collier County, does hereby respectfully request the Joint Legislative
Auditing Committee of the Florida Legislature to direct the State of Florida Office of the Auditor
General to conduct an audit of the issues surrounding the allegations of the Clerk that the County
has impeded his ability to carry out his responsibilities as the Clerk of the Circuit Court; and
4. The Collier County Board of County Commissioners, as the executive and legislative
governing body of Collier County, does hereby respectfully request the Joint Legislative
Auditing Committee of the Florida Legislature to direct the State of Florida Office of the Auditor
General to take any and all other action deemed necessary and appropriate by the Auditor
General to assist in the resolution of the above-stated issues in a timely fashion.
PASSED AND DULY ADOPTED by the Board of County Commissioners of Collier
County, Florida, this.:4ST~ day of r1pr;/ ~"CD .
ATTEST:
DWIGHT E. BROCK, CLERK
BOARD OF COUNTY COMMISSIONERS
COLLIER COUNTY, FLORIDA
~-?~ /
FRANK HALAS, CHAIRMAN
By:
~~~c~4)~'O C.
.,GAlt.... onl-
Date:. April 25, 2006
Date: April 25, 2006
Approved as to form and
legal sufficiency:
,~t)(L ~, L /
~a~que 'ne Williams Hubbard
~jistant County Attorney
ltem# S~
05-953-CAI Doc # 1253
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COLLIER COUNTY MANAGER'S OFFICE
3301 EllSt Tamiarni TraIl . Naples, Florida. 34112 . 239-774-8383 . FAX 239-774-4010
XPMG LLP
Suite 1 700
100 North Tampa Street
Tampa., FL 33602-5145
:March 11,2005
Ladies and Gentlemen:
We are providing this Jetter in connection with your audit of the basic financial statements of Collier County,
Florida, (the County) as of and for the year ended September 30,2004. We understand that your audit was
conducted for the purpose of expressing opinions as to whether the basic financial statements present fairly, in
all material respects, the financial position of the govermnental activities, the business-type activities, the
aggregate discretely presented component twit, eacb major fund and the aggregate remaining fund
information of Collier County, Florida, and the respective changes in financial position and cash flo'WS, where
applicable, in conformity with accounting principles generally accepted in the United States of America. We
confirm that we are responsible for the fair presentation in the basic financial statements of financial position,
changes in financial position, and cash flows, and the budgetary comparison schedule of the general fund in
~nfonnity with accounting principles generally accepted in the United States of America. We are also
responsible for establishing and maintaining effective internal control over financial reporting. Further, we
understand that the purpose of your testing of transactions and rocords from the County's federal and state
programs was to obtain reasonable assurance that the County had complied, in all material respects, with the
requirements of laws, regulations, contracts, and grants t.lJ.at could have a direct and material effect on each of
its major federal and state programs for the year ended September 30,2004.
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 accounting information
that, in the light of surrounding circumstances, makes: It probable that the judgment of a reasonable person
relying on the information would be c!l81lged or iu.tluenced by the omission or misstatement-
We COllL~, to the best of our knowledge and belief, the following representations made to you during your
audit:
L The basic financial ::rf:.atemenis referred to above are fairly presented in conformity with accounting
principles generally accepted in the United States of America.
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EXHIBIT
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2, We have made available to you, if and to the e~ient requested by you:
a. We have informed you that we are aware of certain deposit accounts that were
established using the Collier County, Board of County Commissioner's taxpayer
identification number, which were not set up by the Clerk of the Circuit Court in
his role as the Chief Financial Officer of the CQunty. At this time the Clerk's
Office cannot determine the materiality of the combined deposit accounts to the
financial statements. In addition, we are currently in litigation to determine 1he
Clerk's role with regard to these accounts and their transactions. With the
exception of the aforementioned accolUlts, we have provided an financial
records and related data.. We have Dot knowingly withhdd from you any other
f"mancial records or related data that in our judgment would he relevant to the
pwpose of your audit-
b. We have made available to you all minutes of the meetings of the Board of
County Commissions, or summaries of actions of recent meetings for wbicl:t
minutes have not yet been prepared.
3.
Except as disclosed to you in writing, thcre have been no cODllnlUlications from
regulatory agencies concerning noncompliance with, or deficiencies in, financial
reporting practices.
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4. There are no reportable conditions in the design or operation of internal control over
financial reporting which could adversely affect the County's ability to record, process,
summarize and report financial data, and we bave identified no material weaknesses in
internal control over financial reporting.
5. There are no:
a.
Violations or possible violations of laws or regulations, whose effects should be
consldered- for dIsclosure in the basic financial statements - or - as' a - b~rs- for-
recording a loss contingency.
b_ Unasserted claims or assessments that our lawyers have advised us are probable
of assertion and must be disclosed in accordance with Statement of Financial
Accounting Standards (SFAS) No.5, AccountingfoT Contingencies.
C, Other liabilities or gain or loss contingencies that are required to be accrued or
disclosed by SFAS No.5.
d.. Material transactions, for example, grants or encumbrances, that have not been
properly recorded in ihe accounting records underlying the basic financial
statements.
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e. Events that have occurred subsequent to the date of the statement of net assets
and through the date of this letter that would require adjustments to or disclosure
in the basic financial statements.
6_ There are no uncorrected financial statement miss+..atements to be included on a schedule
of uncorrected financial statement misstatements.
7 _ The County has no:
a.. Commitments for the purchase or sale of services or assets at prices involving
material probable loss_
b. Materia! amounts of obsolete, damaged, or unusable items included in the
inventories at greater than salvage values.
c. Loss to be sustained as a result of other-than-temporary declines in the fair value
of investments.
8. The County has no plans or intentions that may materially affect the carrying value or
classification of assets and liabilities.
9. Capital assets, including infrastructure assets, are properly capitalized, reported and, if
applicable. depreciated. There are no liens or encumbrances on such assets nor has any
asset heen pledged as collateraL
10_ Deposits and investment securities are properly classified and reported.
11. The County is responsible for the identification of and tompliance with all aspects of
lavvs, regulations, contracts, or grants that couId have a material effect on the basic
financial statement amounts in the event of noncompliance including legal l\11d
conhctual -provisions fOr -reporting specific activities in separate funds and has
disclosed those aspects of laws, regulations, contracts. or grants to you.
12_ The County has complied, in all materia! respects, with applicable laws, regulations,
contracts and gra.nts that could have a material effect on the basic fmancial statements in
the event of noncompliance-
13. The following have been properly recorded ef disclosed III the basic fina."lcial
statements:
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a. Related party transa.ctions including sales, purchases, loans, transfers, leasing
arrangements, guarantees, oogoing contractual commitments and amoUllts
receivable from or payable to related parties. We understand that the term
''related party" refers to affiliates of the County; entities for which investments
are accounted for by the equity method by the County; trusts for the benefit of
employees, such as pension and profit-sharing trusts that are managed by or
under the trusteeship of management; key administrative, financial, and
legislative personnel and other members of County management or businesses
they represent or have au interest in; members of the immediate families of
County management; and oilier parties with which th~ enterprise may deal if one
party controls or can significantly influence the management or operating
policies of the other to an extent that one of the 't:r3rlsacting parties might be
prevented from fully pllISUing its own separate interests. Another party also is a
related party if it can significantly influence the mailllgement or operating
policies of the transacting parties or if)t has an ownership interest in one of the
transacting parties and can significantly influence the oilier to an extent that one
or more of ilie transacting parties might be prevented from fully pursuing its
own separate interests.
b. Guarantees, whether written or oral, under which the County is contingently
liable.
c. Arrangements with financial institutions involving compensating balances, Or
other arrangements involving restrictions on cash balances and lines of credit or
similar arrangements.
d. Agreements to repurchase assets previously sold, including sales with recourse.
e. Changes in accounting principle affecting consistency.
14. The Coiinty lias identified and properly accounted for all nonexchange transactions.
15. Provision has been made for any material loss that is probable from environmental
remediation liabilities associated with Naples, Immokalee and Eustis landfill sites. We
believe that such estimate is reasonable based on available information and that the
liabilities and related loss contingencies and the eA-pected outcome of uncertainties have
been adequately disclosed in the County's basic financial statements.
16. The County's reporting entity includes all entities that are component units of the
County. Such component units ba\'e been properly presented as either blended or
discrete.
17. The basic financial statements properly classify all funds and activities.
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18. Net asset components (invested in capital assets, net of related debt~ res~cted; an?
unrestricted) and fund balance:: reserves and designations are properly classified and, If
applicable, approved-
19. The Coun.ty has complied with all tax and debt limits and with all debt related
covenants.
20. The County has presented all requited supplementaxy information. This information has
been measured and prepared within prescn"bed guidelines.
21. The COWIty has complied with all applicable laws and regulations in adopting,
approving and amending budgets.
:22. We acknowledge our responsibility for the design and implementation of programs and
controls to prevent and detect fraud. We understand that the term "fraud" includes
misstatements arising from fraudulent fmandaI reporting and misstatements arising
from misappropriation of assets. Misstatements arising from fraudulent financ:iaI
reporting are intentional misstatements, or omissions of amounts or disclosures in
fuumcial sb1:ements to deceive financial statement users. MissUl.tements arising from
misappropriation of assets involve the theft of an entity's assets where the effect of the
theft causes the basic financial statements not to be presented in confonnity with
accounting principles generally accepted in the United States of America.
:?3. We have no knowledge of any fraud or suspected fraud affecting the entity involving:
a. Management,
b. Employees who haYe significant roles in internal control, or
c. Others where the fraud could have a material effec1: 00 the basic financial
statements.
24. We have no knowledge of any allegations of fraud or suspected fraud affecting the
COUl1ty Iec~ived in communications from employees, former employees, analysts,
regulators, or others.
25. We have nO knowledge of any member of the governing body of the COUl1ty, or any
other person acting Wlder the direction thereot;. taking any action to fraudulently
mfluence, coerce, manipulate or mislead you during your audit.
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26. We have received opinions of counsel upon each issuance of tax-exempt bonds that the
interest on such bonds is exempt from federal income ta.:"{es Ullder the Internal Revenue
Code of 1986, as amended. There have been no cbai,.ges in the use of property :fmanced
with the proceeds of tax-exempt bonds, or any other occurrences, subsequent to the
issuance of such opinions, that would jeopardize the t3X-exempt status of the bonds.
Provision has been made, where material. for the amount of any required arbitrage
rebate.
27. Receivables re-ported in the basic financilll statements represent valid claims arising on
or before the date of the statement of net aSsets and appropriate provisions for
uncollectible receivables have been properly identified and recorded.
28_
The County is responsible for determining the fair value of certain investments as
required by GASB Statement No. 31, Accounting and Financial Reporting for C~rtain
InvestJrJents and for External Investment Pools. The amounts reported represent the
County's best estimate of fair value of investments required to be reported under the
Statement_ The County also has disclosed the methods and significant assumptions used
to estimate the fair value of its investments, and the nature of investments reported at
amortized cost.
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29. All funds that meet the quantitative criteria in GASB Statement No. 34 for presentation
as major- are identified and presented as such, and aU other funds that are presented as
major are considered to be particularly important to financial statement users by
management.
30. Expenses have been appropriately classified in or allocated to functions and programs in
the statement of activities, and allocations have been made on a r,;:asonable basis.
31, Revenues are appropriately classified .in the statement of activities within program
revenues and general revenues-
32. Interfund., internal and intra-entity activity and balances have been appropriately
classified and reported,
33. We agree with the findings of specialists in evaluating the self-insurance, Landfill
liability, a.'1d arbitrage rebate liability a.TId have adequately considered the qualificatio!l.s
of the specialist in determining the amounts and disclosures used in the financial
statemcn~ and underlying accounting records. We did not give or cause any
instructions to be given to specialists with respect to the values or amounts derived in an
attempt to bias tbeirwork, and we are Dot otherwise aware of any nurttors that ha'Ve had
an impact on the independence or objectivity of the specialists.
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34.
We believe that the actuarial assumptions and methods used to measure self-insurance
and costs for financial accmmting and disclosure purposes are appropriate in the
circumstances.
35.
In. accordance with Government Auditing Standards, we have identified to you the
significant findings and recommendations from previous financial audits, attestation
engagements. performance audits, or other studies related to the objectives of this audit
and have accurately communicated to you the related corrective actions taken to address
the findings.
36.
The County is responsible for complying. and has complied, 'With the requirements of
OMB Circular A-133 and Florida Statutes 215.91.
37.
The County has prepared the schedule of expenditures of federal awards and state
projects in accordance with the requirements of OMB Circular A-I33 and Florida
Statutes 215 _97, respectively, and has included all expenditures mad~ during the year
ended September 30,2004 for all awards provided by federal and state agencies in ilie
form of grants, federal and state cost-reimbursement contracts, loans, loan guarantees,
pcoperty (including donated surplus property), cooperative agreements, interest
subsidies, insurance, food commodities, direct appropriations, and other assistimce.
38.
The County is responslble for complying., and has complied, with the requirements of
laws and regulations, and the provisions of contracts and grant agreements related to
each of its federal programs and state projects. The COWlty has disclosed to you any
inteIpretations of any compliance requirements that have varying interpretations.
39.
The COWlty is responsible for establishing and maintaining effective internal control
over compliance for federal programs and state projects that provides reasonable
assurance that federal and state awards are administered in compliance with laws.
regulations, and the provisions of contracts or grant agreements that could have a
material effect on afederal program or state project..
40_
There are no reportable conditions in the design or operation of internal control which
could adversely affect The County's ability to administer a major federal program or
state project in accordance with the applicable requirements of laws.. regulations and the
provisions of contracts and grant agreements. Under standards established by the
American Institute of Certified Public Accountants, a ''reportable condition" is defined
as a significant deficiency in the design or operation of internal control that could
adversely affect The County's ability to administer a major federal program or state
project in accordance with the applicable requirements of laws, regulations and the
provisions of contracts and grant agreements. We understand that the term. "material
weakness in internal control" is a reportable condition for which the design or operation
of one or more internal control components does not reduce to a relatively low level the
risk that noncompliance with the applicable requirements of laws, regulations and the
provisions of contract and grant agreements may occur and not be detected within a
ti:rn eJy period by employees in the DDnna) course of perl'orming their assigned functions.
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41. We acknowledge our responsibility for the design and implementation of programs and
controls to prevent and detect fraud in the administration of federal programs and state
projects. We have no knowledge of any fraud or suspected fraud affecting the entity's
federal progrnms or state projects involving:
a. Management., including management involved in the admini!':tration of federal
programs or state projects,
b, Employees who have significant roles in internal control over the administration
offederal progrcnns or state projects. and
c. Others where the fraud could have a material effoct on compliance with laws
and regulations, and provisions of-contract and grant agreements related to its
federal programs or sUrte projects.
42. The County has identified and disclosed to you tbe requirement9 oflaws, regulations and
the provisions of contracts and grant agreements that are considered to have a direct and
material effect on each major federal program or state project.
43. The COlDlty has made available aU contracts and grant agreements (including
amendments, if any) and any other correspondence with federal or state agencies or
pass-through entities related to major federal programs or state projects.
44. The County has identified and disclosed to you all known noncompliance with the
requirements of federal or state awards, including the results of other audits or program
reVIeWs.
45_ The COlUlty has made available all documentation related to the compIilUlce
requirements, including information related to federal or state fmancial reports and
claims for .advances an.d reimbursements for major federal programs or state projects.
46. The COlUlty is in compliance with the documentation requirements contained in OMB
Circular A-87, "Cost Principles for State. Local and Tribal Governments" for all COStS
charged to federal awards, including both direct costs and indirect costs charged through
cost allocation plans or indirect cost proposals. Costs charged to federal awards or state
projects are considered allovvable under the applicable cost principles contained in OMB
Circular A-87.
47. Fedeml or state financial reports and claims for advances and reimbursements are
supported by the acc()unting records from which the basic financial statements have
been pr~pared.
48. The copies of federal or state financial reports pro...ided to you are true copies of the
reports submitted, or elec1ronicaUy transmitted, to the federal Or state agency or pass-
through eutity, as applicable.
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49, The COUIlty bas monitored subrecipients to determine that they have expended pass-
through assistance in accordance with applicable laws and :r~gul:ltions and have met the
requirements of OMB Circular A-B3 or Florida Statutes 215.97. The County has
issued management decisions on a timely basis after receipt of sub.recipient audit reports
that identified non-compliancc with laws, regulations, or the provisions of contracts or
grant agreement.<;, and has ensured that sub recipients have taken appropriate and timely
corrective action on such findings.
50. The County has considered the results of subrecipient audits and has .made any
necessary adjustments to the accounting records.
51. The County is responsible for, and has accUr.ltely prepared, the summary scbedule of
prior audit [mdings to include all findings required to be included by Florida Statutes
215.97.
52. The CoUIrty has provided you with all information on the status of the follow-up on prior
audit findings by state awarding agencies and pass-through entities, including all
management decisions.
53 _ The County has accurately completed Part I of the data collection form.
54.
The basic financial statements disclose all of the matters of which we are aware that are
relevant to the entity's abi.lity to continue as a going concern, including significant
conditions and events, and our plans.
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55_ During no time during the fiscal year did the County meet any of the conditions
described in Florida Statutes 218.503(1) as being in a state of "financial emergency."
56. Impact fee revenues are deferred as the County does not have a legaJly enforceable
claim against these revenues uutil they have been expended on a.utho~ projects,
encumbered or the period subje~ ~ refund ~s eA-pired.
Very truly yours,
C(jHiec County, Florida
ik4<Y.~
J L Mitchell, CIA, CFE, CBA
Director of Ffncmce and Accounting
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D M. Jolmssen, CPA
eneral Accounting Manager
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Dwight E. Brock
1 Clerk of Courts
· '1G:~ty offi:Jl)-ier ;1-\
.' .:r---...
e:bERK SF 'F.F.Ib 0lR:em COURT
COLLIER COUNTYi'" OUR~Us;E
3301 TAMIAMI E~T
P.O. BOX 4 044 \
NAPLES, FLORIDA Ol-3)OM
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Clerk of Courts
Accountant
Auditor
Custodian of County Funds
March! 7,2006
K.PMG LLP
Suite 1700
100 North Tampa Street
Tmnpa, FL 33602-5145
Ladies and Gentlemen:
We are providing this letter in connection with your audit of the basic financial statements of
Collier County, Florida, (the County) as of and for the year ended September 30,2005, for the
purpose of expressin g opinions as to whether the basic financial star.ements present fairly, in all
material respects, the fmancial position of the governmental activities, the business-type
activities, the aggregate discretely presented component unit, each major fund and the ag,gregate
remaining fund information of Collier County, Florida, and the respective changes in financial
position and cash flows, where applicable, in conformity with accounting principles generally
accepted in the United States of America. We confirm that we are responsible for the fair
presentation in the basic financjaJ statements of fmancial position, changes in financial position,
and cash flows, and the budgetary comparison schedule of the general fund)n conformity with
accounting principles generally accepted in the United States of America.[KPMG LLP is fully
aware of the impediments placed upon the Clerk's Office in insuring that the Financial
Statements comply with Generally Accepted Accounting Principles. KPMG lLP understands
the Clerk accepts no responsibility for those items of which we are unaware or ha\'e had limited
means of detecting, For pUIposes of these statement~ we are relying on the representations of
County staff as set forth in their representation lette~We are also resporu>ibll!l for establishing
and maintaining effecth:e illternal control over financial reportingEperating under IDose same
limitations aud impedimen~ Further, we understand that the purp<lse of your testing of
rransactions and records from the Coupty"s federal and state programs was to obtain reasonable
assurance tha.t the County had complied, in aU material respel::ts, with the requirements of laws,
regulations, contracts, 3Ild grants that could have a direct and marerial effect on each of its major
federal and state programs for the year E'Ilded September 30, 2D05.
Ce:n:ain representations in this letter are descri}:led as being limited IO matters that are material
Irems are considered material, regardless of size, if they involye an omission or misstatement of
accounting infonnation fuat, in the light of surrounding circumstances, makes it probable ilia1 me
judgment of a reasonable person relying on the information would be changed Dr influenced by
the omissioIl or misstatem.ent. .
fWe have made you aware ofpending litigation between the Clerk of Courts and the Board of
.-.- - -- - E::ounty E;onnnissIoners-regarding1:he County' s refu~al toa1low lb.! C!en(To-pe'ffarm rus -
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Phone- (239) 732~2646
Web site- www"clerk.collier.fl.ns
Fax- (239) 775-2755
Email- coIlierclerk@clerk.collier.tlus
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accounting/auditing functions as required by law. This refusal has limited our ability to audit
comity department; and CODS~eD1:ly limits our ability to make statements pertaining to the
:fmancial statement's accuracy;'!
[ConsideriTlg ilie above 1imitatio~ we co!lfirm. to the best of our knowledge and belief, the
fallowing representations made to you during your audit:
2.
1. The basic financial statements referred to above are fairly presented in conformity with
accounting principles generally accepted in the United States of Ameril'-a.
[We have infonned.you that we are aware ofseveral volunteer support groups that have,
in some cases, created unauthorized accounts and conected money without Board
approval or even Board knowledge. We confirm that an relevant infonnation that the
Clerk's Office possesses relating to these facts and circumstances that h35 been
discovered to date, has been disclosed by us to you, We also conf1IIIl 'Chat these matters
will be investigated furrher as aUowed by- law, and, where necessary, we are taking
timely and appropriate remedial acti~~th the e.."Xception of the aforementioned
accountsl we have made available to you,\i:fjmd to the extent requested by yo~ all
f"manci~ecords and related data&:fwhich we are aw~ We have not knowingly
,vit1ilield from you any other financial records or related data that in our judgment would
be relevant to tbe purpose of your audit.
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3_ We have made available to you all minutes of the meetings of the Board of County
Commissioners, or summaries of actions ofrecent meetings for which minutes have Dot
yet been prepared.
4, There have been no communications from regulatory agencies concerning
noncompliance with, or deficiencies in, fwandal reporting practices~f which we are
aware that have Dot been disclosed to KPMQ]
5. There are no reportable conditions in the design Of op~tiOIl of internal control over
fmancial reportinG the Clerk's AgencYIwhich could adversely affect the County's
abilIty to record, process, summarize an..:.rf'report :frnancial data. [Jye have be-en unable,
however, to test the County's internal controls due to the limitations imposed by the
Ccunt8
6. There are no:
a. Violations or possible violations of laws or regulations, whose effects should be
considered for disclosure in the basic: :financial statements or as_ a basis for
recordin~ loss contingency19fwhich we are aware that have not been disclosed
to KPMgd.
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b.
Unasserred claims or assessments that our lawyers bave advised us are probable
of assertion and must be disclosed in accordance with Statement ofFinsncial
Accounting Stancbrds (SFAS) No.5, AccoWJtingfor Contingencies.
c.
Other liabilities or gain or loss contingencies !bat are required to be accrued or
disclosed by SFAS No.5.
d.
Material transactions, for example, grants Dr e.ncumbrances.f<;fwhich we are
awar~that have not been properly recorded in the accountiJg records
underlying the basic financiaJ statements.
EvemsM which we are awa:3!tbat ~ave occurred subsequent to the date of the
statement of net assets and through the date of this letter that would require
adjustments to or disolosure in the basic fmancial statements.
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7. There are no uncorrected fmancial statement misstatements to be included in the
sununary of uncorrected statements.
8_ The County has no:
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a.
Commitments for the purchase or sale of services or assets at prices involving
material probable Joss@which we are aware that have not been report;;!]
b. Material amounts of obsolete, damaged, or unusable items included in the
inventorie~ at greater than salvage values Kwhich we are aw~
c. Loss,~which we are awar] to be sustained as a result ofomer-than-temporary
declines in the fair value of investments.
9. ~e are not aware of any plans or intentions of the CouniJthat may materially affect the
carrying value or classification of assetB and liabilities.
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10. CapiIaI asset<>, including infrastructure assets, are properly capitalized, reported and, if
applicable. depredated. There are no liens or encumbrances on such assets nor has any
asset been pledged as colIatera.@.at we are awa:~ur abiHry to discover umeported
capital assets, however, has beM compromised 1:iy our inability to test and inspect, due
to constraints plac;d upon us by the CoU!!B
11. )!:eport~ deposits and investment securities are properly classified and reported.
12. The County is responsible for the idemmcation of and compliance \lith all aspects of
laws, regulations, contracts, or grants that could have a material effect on the basic
financial statement amounts' in the event ofnoncompIilIDce including legal and
. - -contractual provisions for reporting specific activitJes-ln-separate funds and has--
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disclosed those aspects of laws, regulations, contracts, o~ grants to youf!:ccording to the
County's representation lettej
13. <'As far as we are aware, other than has been presented to KPMG L~e County ha.c;
~mplied. in all material respects, with applicable laws, regulations, contracts and grmts
that could have a material effect on the b~ic [mandaI statements in the event of
noncompliance.
14. The following have been properly recorded or disclosed in the basic financial
statement<;:
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a.
Related party- transactions including sales, purchases, loans, transfers, leasing
arrangements, guarantees, ongoing contractual commitments and amounts
receivable from OT payable to related parties. We understand that the term
"related party" refers to affiliates of the County; entities for which investments
are accounted for by the equity method by the County; trusts for the benent of
employees, such as pension and profit-sharing trusts that are managed by or
under the trusteeship of management; key administrative, financial, and
legislative personnel and other members of County management or businesses
they represent or have an interest in; members of the immediate families of
County management; and other parties with which the enterprise may deal if one
party controls or can significantly influence tho management or operating
policies of the other to an extent that one Qfthe transacting parties might be
prevented from fully pursuing its O"lVn separate interests. Another party also is a
~lated party if it can significantly influence the management or operating
policies of the transacting parties or if it has an o"'Ilership interest in one of the
transacting parties and can significantly influence the other to an extent thai one
or- more of the transaQting parties might be prevented from fully pursuing its
own separate interestsTWe have made KPMG LLP aware of certain entity
transa.ctions including tat not limited to the Collier County Housing
Development Corporation, the Empowerment Alliance, the Affordable Housing
Trust, numerous bank accounts and Habitat for Humanity of which we are
aware and do not have sufficient information available to us to detennine if they
have -been reported according. to generally accepted accounting pilndp19'
Guarantees, of which we are aware, whether 'Written or oral, under whicb the
County is contingently liable.
b.
Arrangements with financial institmions involving compensating balances, or
other arrangements iIrvolving restricTIons on cash~aIances and lines of credit or
similar arrangement€nder the cODn-ol of me Cle~
C3eporte~greements to repurchase assets previously sold, including sales with
_ rec:ourse,~fw~icb. ~e are aw~~ _ _ . _ _ _ . .
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e. Changes in accounting principle affecting consistency.
15. gs far as we are aw~the County has identified and properly accounted for all
nDnexcbange trarlsactlODS.
16. Provision.has been made for any material loss iliat is probable from environmental
remediation liabilities associated with the Naples, Immokalee, and Eustis landfill sites
(]:ased llpon engineering reports and solid waste staff represerrmtic:iiJwe believe that
such estimates are r5asonably based on m'ailable information and that the liabilities and
related loss contingencies and the expec'red outcome of uncenain"ties have been
adequately disclosed in the COUDLy'S basic financial statements.
[7. The County's reporting entity includes all entities that we are aware qualifY as
component units of the C~ty. Such component units have been properly presented as
either blended or discrete, \1ber-e may be additional component units as disclosed
previously. Due 10 the limitations imposed on us; by the County, we do not have
sufficient information avai~le to determine that Gene-raBy Accepted Accounting
Principles bave been applie!!l
The basic financial statements properly classify all funds and activitiese!which we are
aw5J
Net asset components (invested in capital assets, net of related debt; restricted; and
unrestricted) and fund balance reserves and designationBwhich we are aw~are
properly classified and, if applicable, approved.
18.
19.
20.
The Coun~bas complied with all trourd debt limits and with all debt related
covenantsU;s far as the Clerk is awar~
The Clerk has presented all required supplementary inforrnatio~sed upon the
information availabl~ This information has been measured and prepared within
prescribed guidelines considering the constraints noted above.
[As far as we are awar~e COUDIY has complied with all applicable laws and
regulations in adopting, approving and amending budgets.
We aCknoWledg~ COlll1ty~esponslbility for the design arid implementation of
programs and controls to prevent, deter and detect fraud. We \IDderstand that the term
"fraud" includes misstatements arising from fraudulent IlIlaIlcial reporting and
misstatements arising from misappropriation of assetsUV e consider the internal audit
function an integral part of OUT ability to prevent, deter and detect fraud_ The Clerk's
audit function has been limited by the C01lJliy as noted abo~
_ Mi:ssta.:teI1?-~nt~ arising from fraudulent fmancial reporting are-intemional misstatements,
or omissions of amoWlts or disclosures in financial statements to deceive financial
21.
22.
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smtement users. Mjsstatements arising from misappropriation of assets involve the theft
of an entity's aSsets where the effect of the theft causes IDe basic financi.1l statements not
to be presented in conformity "ith accounting principles generally accepted in the
- United States of America.
24, We have no knowledge of any fraud or suspected fraud affecting the entity involving
the Clerk's:
a. Management,
b. Employees who have significant roles lD internal control over fmancial
reporting, or
c. Others' where the fraud could have a material effect on the basic financial
statements .
25.
We have no knowledge of any allegations of fraud or suspected fraud affecting the
County received in communications from employees, former ~~yeos, analysts,
regulators, or others~ has not been disclosed to the proper authoriti~
We have no knowledge of any member of the governing body of the CCJUnty, or any
other person acting under the direction thereof, taking any action to fraudulently
influence, coerce, manipulate or mislead you dming your audit.
26-
27.
We have received opinions of counsel upon each issuance oftax-exempt bonds that the
interest on such bonds is exempt from federal income taxes under the Internal Revenue
Code of 19&6, as amended. We know afno changes in theus'e of property financed witb
the proceeds of tax-exempt bonds. or any other 9ccurrences, subsequent to the issuance
of such opinions, tbt would jeopardize the tax~exernpt status of the bonds. Provision
has been made, where material, for the amount of any required arbitrage rebat~,
28.
Receivables reported in the basic fimmciaJ statements tepresent~ the best of our
knowled~valid claims against debtors arising an or before the date of the statement of
net asset<; an d have been appropriately reduced to the ir estimated neI realizable value.
29.
The County is responsible for determining the fair value of certain investments as
required by GASB Statement No, 31, Accounting and Financial Reporting for Cerram
Investments and for Externallnvestmant Pools. The amounts reported represent the
COUllty'S best estimate offairyalue of investments required to be reponed under the
Statement. The County also has disclosed me methods and significant assumptions used
to estimate the fair value of its investments, and the nature of invesnneDts reporred &.t
amortized cost. _ .
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30. An funds that meet the quantitative criteria in GASB Statement No.3 4 for presentation
as major are identified and presented as such, and all other funds that are presented as
major are considered to be particularly important to fInancial statement users by
management.
31. Expenses, of which we are aware, have been appropriately classified in or al]o~ated to
functions and programs in the statement of activities, and allocations have b~en made on
a reasonable basis.
32. Re:e~~es~ ~-hich We are awar~ are appropriately classified in the statement of
actrntJes wlthm program. revenues and general revenues.
33. Interfund, intem:lt and intra-entity activity and balanceG"\vhich we are ll.war~ave
been appropriately classified and reported. J
34. There are no special or extraordinary item~fwhich we 3I\': aware that have not been
disclos~
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35 We have relied on the findings of specialists in evaluating the self-iwurance, landfill
liability, and arbitrage rebate liability. We did not give or cause any instructions to be
given to specialists with respect to the values or amounts derived in an attempt to bias
their work, atld we are not otherwise aware of any matters that have bad an impact on
the independence or objectivity of the specialisis,
36. tw....e have relied on the actuar~assumptions and methods used to measure self-insUTanc:e
liabilities and costs for :fm~~ accounting and disclosure purposes as reported by the
County.
37. In accordance with Government Audiring Standards, we have identified to you the
significant findings and recommendations from previous financial audits, attestation
engagements, perform3Ilce audits, or other studies related to the objectives oftbis audit
and have accurately communicated to you the related corrective actions taken to address
the fmdings.
38. The County 1S responsible for complying with the reguirements of 01vffi Circular A.D3
and the Florida State Single Audit.
39.
The Clerk has p.epared the schedule of expenditures of federal aw;n-ds and state projects
in accordance with the requirements ofOMB Circular A-B3 and Florida Statutes
215.97, respectively, and has included all expenditures: made during the yeer ended
September 30, ~005 for all awards provided by federal and state agencies in the form of
grants, federal and state cost-reimbursement cuntracts, loans, loan guarantees, property
(including donated surplus property), cooperative agreementS, interest s~~idies,
insurance, food commodides, direct appropriations. and other assistmc~wbich we are
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4D, The County is responsible for complying with the requirements of laws and regulations,
and !be provisions of contracts and gram agreements related to each of its feder.al
programs and state projects. According to their representation letter, me CDunty has
disclosed TO you any inte<rpretations of any complill.Ilce requiremems that have varying
interpretatiDns.
41.
The County is responsible for establishing and maintaining effective internal control
over compliance for federal programs and state projects that provides reasonable
assurance that federal and srate awards are< administered in compliance with laws,
regulations, md the prQ....isions of contracts. Or grant~eemeritS tha.t could have a
material effect on a feJera.1 program or state projec'6.JIue to the audit constraints placed
upon u~ the Coumy, we have re.1ie.cLOD information as -pT.oviu(;;d to us for reporting
purpose!;j
Gue to the constraints placed on our ability to audit, we are unable to determme that
there are no reportable co:oditi~in me design or operation of internal control which
could adversely affect the Coumy's ability to administer a major federal program or
state project in accordance with the applicable requirements of laws, regulations and the
provisions of contracts and grant agreements. Under standards established by the
American Institute of Certified Public Accountants, a "reportable condition" is defined
as a significant deficiency in the design or opera-tioD of internal controJ that could
adversely affect the County's ability to administer a major federal program in
accordance with the applicable requirement<; of laws, regulations and the provisions of
contracts and grant agreements, We understand that. the term "material weakness in
internal control" is a reportable condition for which the desjgn or operation of Oile or
more internal control components does not reduce to a relatively low level the risk that
noncompliance with the applicable requirements of laws, regulations and the provisions
of contract and grant agreements may occur and not be detected within a timely period
by employees in the normal CClurse of performing ilieir assigned funC'tions.
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43. We acknowledge our responsibility for the design and implementation ofprograrns and
controls to prevent and detect fraud in the adminimation offederaJ programs and state
projects')Eue to the constraiilts placed npon us by the County, and our inability to
perform audits, we have been unable to review programs beyond what information has
been provided by the CountylWe have no knowledge of any fraud or suspected fraud
affecting the entity's feder~ogrnrns or state projects involving:
:1. ~ C]~rkAanag~ment, includUlg management invQlved in the administration
of federal programs or state projects;
b. ~erk's employe~who bave significant roles in internal control over the
administration offederaI programs or stato projects; and
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c. ' Oiliers[iithrn the Clerk:; O.;;;J,. where the fraud could have a material effect
on compliance with laws and regulations, and provisions of contract and grant
agreements related to its federa1 programs Dr sate projects.
44. The Clerk has identified and disclosed to you tbe requirements of laws, regulations and
the provisions of contracts and grant agreements that are COllSitred to have a direc.o.p.d
material eff~ct on each major federal program or state project fwhich we are awar~
45. The Clerk has made available all contracts and grant agreements (mcluding
arnendrnents, if any) and any other correspondence with iederal agencies or pass-
through entities related to major federal programs of which we are aware.
46. The Clerk has identified and disclosed to you .:ill kDown noncompliance with the
r~quirements offederal.awards, including the results of other audits or program reviews
8Which we are awar~
4 7. Bi~have made available all documentation rel~red to the compliauce requirements,
including infonnation related "to federal or state financial. repon~d ~laims for advances
and reimbursements for major federal programs or state project~ich we are a~
48.
The County is in compliance with the documentation IequiremeD~ contain~d in OMB
Circular A-37, .'Cost Principles for State, Local and Tribal Governments" for all costs
charged to federal awards, including both direct costs and indirect costs charged thr~
cost allocation plans or indirect cost proposa1~ reported to the CleriSJ ~orted co~
charged to federal awards are considered aUo~e Wlcler the applicable cost principles
contained in ONrn Circular A-87.
49.
Federal or state financial reports and claims for advances 'lIaf!.reimbursements are
supported by the accounting record~reported to the Cle~from which the basic
financial statements have been prepared.
50.
The copies offederal or state tmancial reports provided to you are true copies of the
repom submitted, of!lectronically transmitted, to t~edera.l agency or pass-through
entity, as applicabl~ grants of which we are aware~
The County habortedl"'Jmonitored sub-reCIpients to detennine that they have
expended pass~tlirough ~?rstance in 8ccorqance with applicable laws and regulations
and have met the requir~ents ofOMB ~cuhr A-133 or Florida Statutes 215.97.
G-ccording to the County's represe-nta:tio~ey have issued managoment decisions on a
timely basis after receipt of subrecipient audit reports that identified non-compliance
with laws, regulatiOIls, or the provisions of conu:acts or gr-mt agreements, and have
enSU1'ed that s~brecipients have taken appropriate lUId timeJy COITf1ctive action on such
findings.
51.
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Th~ Clerk as considered the results of sub recipient audits ~ has made any necess'ilI)"
adjustmen to the accounting recar€!" which \ye are av.'aT::J
The counh~as-prepared the summary schedule of prior audit findings to include all
findings, ;f';;bich we are aware, required to be induded by q.MB Circular A-B3 or
Florida Statutes 215.97.
[W1have provided you with a.il infonnation on the status of the follow-up on prior audit
[mdings by federal an~te awarding agencies and pass-through entities, including aU
management decisions{9f which we are a.war~
(part I of the data collection farm has been completed with all information made
B.vailable_to_~
\To the best of our knowledg~at no time during the fiscal year did the County meet any
of the conditions described in Florida Statutes 218.503(1) as being in a state of
"fmancial E;rnergency."
53.
54.
55.
56.
57.
Impact fee revenues axe defen~d as the County does not have a legally enforceable
claim a.gainst these revenues until they h:ive been expended on authorized projects,
encumbered or tile period subject to refund has expired.
VeIy truly yours,
Collier County, Florida
rock
zty Clerk of the Czrcuit COWl
Crysul K. Kinzel
Director of Finance and Accounting
Derek M. J ohnssen. CPA
General Accowzting Manager