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LTC 284-2020 External Auditor's (RSM US LLP) Annual Audit Report on the City of Miami Beach (the City) for the period ended September 30, 2019DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 M IA M I BEACH OFFICE OE TE ITV MA«r L TC 284-2020 LETTER TO COM M ISSIO N To: Mayor Dan Gelber and Members of tg,Z!},Commission FROM: Jimmy L. Morales, City Manager ~lWtWt'1 fvlt>v-Jt.s ~28CA 1 i 194070496 ... DATE: August 17, 2020 SUBJECT: External Auditor's (RSM US LLP) Annual Audit Report on the City of Miami Beach (the City) for the period ended September 30, 2019 The following reports are currently available at https://www.miamibeachfl.gov/city-hall/finance/ financial-documents/: A. Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2019, which includes an unmodified (clean) audit opinion B. Miami Beach Redevelopment Agency (RDA) for the fiscal year ended September 30, 2019, which includes an unmodified (clean) audit opinion. Enclosed, for your information, are the following documents: A. The Auditor's letter to the Mayor and Members of the City Commission which includes the following: • Required Communications • Summary of Significant Accounting Estimates • Summary of Recorded Audit Adjustments • Exhibit A - Significant Written Communications Between Management and Our Firm Representation Letters • Exhibit B - Single audit reports in accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General and the management letter in accordance with the Rules of the Auditor General of the State of Florida and Independent Accountant's Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirement in accordance with Chapter 10.550, Rules of the Auditor General B. Other Auditor's Reports: • Management letter in accordance with the Rules of the Auditor General of the State of Florida • Independent Accountants Report of Compliance with Section 218.415 Florida Statutes Other Financial Audit Reports for the period ending September 30, 2019 are located at https:_//yyw_miamibeachfl.gov/city-hall/finance/financial-documents/; If you have any questions or need additional information, please feel free to contact Allison R. Williams at 305-673-7 466. DocuSign Envelope ID: 5B45F 799-4807-4485-3F7-E00AD 88E4 OD 6 City of Miami Beach, Florida Report to the Honorable Mayor and Members of the City Commission Fiscal Year Ended September 30, 2019 DocuSign Envelope ID: 5B45F 799-4807-4485-B3F7-E00AD 88E4 0D6 I August 3, 2020 Honorable Mayor and Members of the City Commission The City of Miami Beach, Florida 1700 Con venti on Center Drive, 4 Floor Miami Beach, FL 33139 RSM US LLP 100 NE Third Avenue Suite 300 Fort Lauderdale, Florida 33201 T+1954 462 6300 F +1954 462 4607 wwwrmus.com Attention: Honorable Mayor and Members of the City Commission We are pleased to present this report related to our audit of the basic financial statements of the City of Miami Beach, Florida (the City) as of and for the year ended September 30, 2019. In connection therewith, we have also issued a separate report on internal control over financial reporting and on compliance and other matters, a report on compliance for each major federal program, a management letter in accordance with the rules the Florida Auditor General, and an attestation report on compliance with Chapter 1 0.550, Rules of the Auditor General of the State of Florida, relating to the City's compliance with Section 218.415, Florida Statutes, Local Government Investment Policies. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City's financial reporting process. This report is intended solely for the information and use of the Mayor, Members of the City Commission and management, and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to be of service to the City. THE POWER OF BEING UNDERSTOOD AUDIT / TAX CONSULTING RM4LP us the á .merer fer f RM ternatkal. a gkti netsvrk t independent a:dt,tax, an0ting frs. sit rsmus.or/abutu9 ir more inferatn r ing FM US4LP and 4±ternira DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Contents Required Communications 1-3 Summary of Significant Accounting Estimates 4-5 Summary of Recorded Audit Adjustments 6-7 Exhibit A-Significant Written Communications Between Management and Our Firm Representation Letters Exhibit 8-Single audit reports in accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General and the management letter in accordance with the Rules of the Auditor General of the State of Florida and Independent Accountant's Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirement in accordance with Chapter 10.550, Rules of the Auditor General DocuSign Envelope ID: 5B45F 799-4807-4485-B 3F7 -E 00AD88E4 0D6 Required Communications Generally accepted auditing standards (AU-C 260, The Auditor's Communication With Those Charged With Governance) require the auditor to promote effective two-way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the basic financial statement audit as well as observations arising from our audit that are significant and relevant to your responsibility to oversee the financial and related compliance reporting process. Area Comments Our Responsibilities With Regard to the Financial Statement Audit Overview of the Planned Scope and Timing of the Financial Statement Audit Accounting Policies and Practices Accounting Policies and Practices (Continued) Our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States have been described to you in our arrangement letter dated July 30, 2019. Our audit of the financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter. We have issued a separate communication dated September 23, 2019 regarding the planned scope and timing of our audit and have discussed with you our identification of significant risks of material misstatement. Preferability of Accounting Policies and Practices Under generally accepted accounting principles, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice. Adoption of, or Change in, Accounting Policies Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The City adopted the recognition and disclosure requirements of Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations, and GASB Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Private Placements. Adoption of these standards did not have a significant effect on the City's financial statements. There were no other new significant accounting policies, nor have there been any significant changes in existing accounting policies during the current period. Significant or Unusual Transactions We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Management's Judgments and Accounting Estimates Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Area Comments Audit Adjustments Uncorrected Misstatements Disagreements With Management Consultations With Other Accountants Significant Issues Discussed With Management Significant Difficulties Encountered in Performing the Audit Audit adjustments, other than those that are clearly trivial, proposed by us and recorded by the City are shown in the attached Summary of Recorded Audit Adjustments. We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial. We encountered no disagreements with management over the application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the basic financial statements. We are not aware of any consultations management had with other accountants about accounting or auditing matters. Following is a description of significant issues arising from the audit that were discussed with management: • GASB 75 discount rate restatement • Period of availability for revenue recognition of grants • Implementation of GASB standards • Uniform Guidance requirements We did not encounter any significant difficulties in dealing with management during the audit. 2 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E4OD6 Area Comments Letter(s) Communicating Significant Deficiencies and Material Weaknesses in Internal Control Over Financial Reporting Significant Written Communications Between Management and Our Firm We have issued, under separate cover, the following reports in connection with our audit, as required by the Government Auditing Standards, Uniform Guidance, and Chapter 10.550, Rules of the Auditor General of the State of Florida: • 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 and identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. • Independent Auditor's Report on Compliance for Each Major Federal Program and State Project; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards and State Financial Assistance Required By the Uniform Guidance and Chapter 10.550, Rules of the Auditor General. • Management Letter Required Chapter 10.550, Rules of the Auditor General. • Independent Accountant's Report in Accordance with Chapter 10.550 of the Rules of the Auditor General relating to the City's compliance with Section 218.415, Florida Statutes, Local Government Investment Policies. Copies of material written communications between our firm and the management of the Organization, including the representation letter provided to us by management, are attached as Exhibit A. 3 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Summary of Significant Accounting Estimates Accounting estimates are an integral part of the preparation of financial statements and are based upon management's current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates. The following describes the significant accounting estimates reflected in the City's September 30, 2019 basic financial statements. Estimate Accounting Policy Management's Estimation Process Basis for Our Conclusions on Reasonableness of Estimate Actuarial Assumptions Used for the Self-Insurance Program (Risk Management) Accounting for Pension Plans and Related Net Pension Liabilities, Expense and Deferred Amounts The City is self-insured for health, general and auto liability, property and workers' compensation. The accrued liability for estimated claims represents an estimate of the eventual loss on claims, including claims incurred but not yet reported. Net pension liabilities and related deferred pension amounts and expense are actuarially determined in accordance with the parameters established by the Governmental Accounting Standards Board (GASB). The difference between the total pension liability and Plan Fiduciary Net Position at each Plans' measurement date and any associated deferred outflows/inflows as of the period ended are recognized in the financial statements. The City utilizes the services of an actuary, their risk manager, and outside legal counsel to assist in developing any risk reserves for health, general and auto liability, property and worker's compensation claims including those that may have been incurred but not yet reported. City management and/or the pension plans' management, with input from its actuary, developed the actuarial assumptions based on relevant criteria. City management reviewed and approved the financial statement estimates derived from the pension plans' actuarial reports. We have audited the underlying data supporting the estimate, including having our specialist evaluate the actuarial report and assumptions used and concluded the resulting estimate to be reasonable. We have audited the underlying data supporting the estimates, including having our specialist evaluate the actuarial reports and assumptions used and conclude the resulting estimates to be reasonable. 4 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-EOOAD88E40D6 Basis for Our Conclusions on Management's Reasonableness of Estimate Accounting Policy Estimation Process Estimate Depreciation of Depreciation on capital Depreciation of capital We have audited the Capital Assets assets is provided using assets is determined underlying data the straight-line method. using the straight-line supporting the estimate The depreciable life of method of depreciation and have concluded the capital assets is based over the estimated resulting estimate to be on management's useful lives of the asset, reasonable. estimate of the useful as assigned by lives of the assets. management. Allowance for All trade and other The allowance is based We have audited the Doubtful Accounts receivables are reported on receivables in underlying data net of an allowance for excess of 90 days that supporting the estimate uncollectible amounts to are not deemed and have concluded the arrive at the net collectible. resulting estimate to be realizable value. reasonable. Accounting for Other Total post-employment Management and the We have audited the Post-Employment benefits (OPEB) actuary determine the underlying data Benefits (OPEB) and liabilities, related appropriateness of the supporting the the Related Total deferred OPEB actuarial assumptions to estimates, including OPEB Liabilities, amounts and expense be utilized. The actuary having our specialist Expense and Deferred are actuarially then performs the evaluate the actuarial Amounts determined in calculation that is report and assumptions accordance with the reviewed and approved used and conclude the parameters established by management. resulting estimates to by the GASB. be reasonable. 5 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-EOOAD88E40D6 Summary of Recorded Audit Adjustments Entry #1: Capital Projects - Due from other governments $ Other Special Revenue - Due from other governments Capital Projects - Unavailable revenue Other Special Revenue - Unavailable revenue Debit 14,585,299 $ 597,940 Credit 14,585,299 597,940 To record grants that were measurable but not received within the period of availability criteria - outside of the 45 days accrual period. Entry #2: Stormwater Opinion Unit Debit Deferred outflow - OPEB 918,844 Net OPEB liability - noncurrent Deferred inflow - OPEB 172,095 Net position Personal services 301,550 Water and Sewer Opinion Unit Deferred outflow - OPEB 125,602 Net OPEB liability - noncurrent Deferred inflow - OPEB 1,166,474 Net position Personal services 106,212 Parking Opinion Unit Deferred outflow - OPEB 1,424,323 Net OPEB liability - noncurrent Deferred inflow - OPEB 265,108 Net position Personal services 538,482 Convention Center Opinion Unit Deferred outflow - OPEB 22,132 Net OPEB liability - noncurrent Deferred inflow - OPEB 9,895 Net position 15,549 Personal services 8,170 Sanitation Opinion Unit Deferred outflow - OPEB 1,104,082 Net OPEB liability - noncurrent Deferred inflow - OPEB 1,160,179 Net position Personal services 456,781 Internal Service Funds Opinion Unit Deferred outflow- OPEB 1,123,713 Net OPEB liability - noncurrent Deferred inflow - OPEB 1,129,678 Net position Personal services 440,697 Credit (241,177) 1,151,312 1,328,479 69,809 1,361,658 866,255 55,746 2,048,826 672,216 1,567,758 1,008,084 To properly reflect the OPEB liability, deferred inflows/outflows, and expense as of 9/30/19. Entry includes restatement. 6 D ocuS ig n E nvelope ID : 5B 4 5 F 7 99-4 807-448 5-B 3 F7-E 00A D 88E 40D 6 S u m m a ry of R eco rd ed A ud it A dju s tm ents (c ontin ued ) Entry #3: Storm w ater Opinion Unit Debit Credit D e ferr ed outfl o w - O P E B 1,736,017 N e t O P E B lia b ility - no ncurre nt 241,178 D e ferred inflo w - OP E B 222,869 P e rso n a l se rv ices 1,717,708 W ater and Sew er Opinion Unit D e fe rred outflo w - OP EB 4,960,779 N e t O P E B lia bility - noncurre nt 1,328,480 D efe rred infl ow - O PE B 553,341 P e rso n a l se rv ices 4,18 5,640 Parking O pinion Unit D e ferr ed outfl o w - O PE B 7,4 82,187 N e t O P E B liab ility - no ncurre nt 1,361,658 D e ferred inflo w - OP E B 918,466 P e rso n a l se rv ice s 7,038,995 Convention Center Opinion Unit D e ferred outflo w - O PE B 135,386 N e t O P E B lia bility - no ncurre nt 55,745 D e fe rred infl ow - OP EB 12,555 P e rso n a l se rv ice s 92,196 Sanitation Opinion Unit D e fe rred outflo w - OP E B 8,842,482 N e t O P E B lia b ility - non cur r ent 2,048,828 D e ferr ed infl ow - O P E B 1,028,015 P e rso n a l se rv ices 7,821,669 Intern al Serv ice Funds Opinion Unit D e ferr ed outfl o w - O PE B 9,188,166 N e t O P E B liab ility - non cur r ent 1,567,759 D e ferr ed infl ow - O P E B 1,099,189 P e rso n a l se rv ices 8,719,596 T o reve rse orig in a l entry recorde d by the C ity in order to properly record the O PEB liability, deferred infl ow s/outflow s and expe nse at 9/30/19 . Entry #4: Entry #5: G overn m ental Activities A ccrue d inte re st In te rest expe nse T o prop e rly refle ct accrue d interest expense as of 9/30/19. Debit Credit 2,349,034 2,349,034 Govern m ental Activities O P E B Li a b ility Fu nd B a la n ce O the r LT Li a b ility D efe rred O utflo w - G A S B 75 D e fe rre d In fl ow - G A S B 75 209,180,307 146,381,762 16 ,578,762 46,041,243 178,540 T o pro p e rly refle ct the O P E B liability, deferr ed inflow s/outflow s, and expense as of 9/30/19. Entry in cl ud e s resta te m e nt. 7 DocuSign Envelope ID: 5845F799-4807-4485-83F7-E00AD88E40D6 Exhibit A- Significant Written Communications Between Management and Our Firm DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 MI t 'ß.•.·.E.-.· .. ¡ e City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, ww _miamibeachf gov FINANCE DEPART MENT June 24, 2020 RSM US, LLP 801 Brickell Avenue, Suite 1050 Miami, FL 33131 This representation letter is provided in connection with your audit of the basic financial statements of the City of Miami Beach, Florida as of and for the year ended September 30, 2019 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). We confirm, to the best of our knowledge and belief, that as of June 24, 2020 Financial Statements 1. We have fulfilled our responsibilities, as set out ìn the terms of the audit arrangement letter dated July 30, 2019, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP. 2. We acknowledge our responsibility for the design, implementation and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 3. We acknowledge our responsibility for the design, implementation and maintenance of internal controls to prevent and detect fraud. 4. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take. 5. Related-party transactions, including those with component units for which the City is accountable, other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete, and interfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund transfers, long-term loans, leasing arrangements and guarantees, have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 2 6. All events subsequent to the date of th e financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed. 7. The effects of all know actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. 8. There are no unasserted claims or assessments that our lawyers have advised us are probable of assertion and must be disclosed in accordance with GASB Statement No.10 and 62 beyond those accounted for in the City's risk retention estimated liabilities. 9. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bondholders which is not disclosed in the financial statements. 10. We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 11.We have evaluated Governmental Accounting Standards Board ("GASB") Statement No. 83 Certain Asset Retirement Obligations and GASB Statement No.88 Certain Disclosures related to debt, including direct borrowings and direct placements, and have concluded that these accounting pronouncements did not or will not have any significant impact on the City's financial statements. 12.As of and for the year ended September 30, 2019, there were no uncorrected misstatements aggregated by you that should be considered in the final amounts reported in the financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probab le that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. However, we acknowledge that we have omitted certain disclosures related to the pension and other post-employment ben efit (OPEB) plans that should be included in the notes to the financial statements. We believe the effect of the omission of these footnote disclosures is not material to the financial statements. 13. We agree with the findings of specialists in evaluating our self-insurance program, the total OPEB and related OPEB amounts, the pension plans net pension liab ility and related pension amounts, and our arbitrage rebate liability and have adequately considered the qualifications of the specialists in determining the am ounts and disclosures used in the financial statements 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 their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivi ty of the specialists 14. We believe that the actuarial assumptions and methods used to measure the City's OPEB and pension liabilities and related costs for financial accounting purposes are appropriate in the circumstances. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 3 15. We agree with the restatements of the previously issued financial statements discussed in Note 19 . In that regard: a. The restatements correct errors in those financial statements. b. We were not aware of the errors when those financial statements were issued. c. We are not aware of any other errors in those financial statements. d. The restatement did not cause or cure a debt covenant violation in the restated year or current year. e. The restatement did not cause or cure any noncompliance related matters in the restated year or current year. We do not believe it is necessary to recall those previously issued financial statements and al l users of those financial statements will receive a copy of the current year's financial statem ents and independent auditor's accountant's report Information Provided 16. We have provided you with: a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters; b. Additional information that you have requested from us for the purpose of the audit; c. Unrestricted access to persons wi thin the City from whom you determined it necessary to obtain audit evidence; and d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared. 17.All transactions have been recorded in the accounting records and are reflected in the financial statements. 18. We have disclosed to you the results of our assessment of risk that the finan cial statements may be materially misstated as a result of fraud. 19. We have no knowledge of allegations of fraud or suspected fraud affecting the City's financial statements involving: a. Management. b. Employees who have significant roles in internal control. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40O6 RSM US LLP June 24, 2020 Page 4 c. Others where the fraud could have a material effect on the financial statements. 20. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity's financial statements received in communications from employees, former employees, analysts, regulators, short sellers or others. 21. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations. 22. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. 23. We have disclosed to you the identity of the City's related parties and all the related- party relationships and transactions of which we are aware. 24. Except as disclosed in your reports, we are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize and report financial data. 25. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. Supplementary Information 26. With respect to supplementary information presented in relation to the financial statements as a whole: a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S. GAAP. c. The methods of measurement or presentation have not changed from those used in the prior period. d. When supplementary information ìs not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance of the supplementary information and the auditor's report thereon. 27.With respect to the Required Supplementary Information presented as required by the Governmental Accounting Standards to supplement the basic financial statements: a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 5 c. The methods of measurement or presentation have not changed from those used in the prior period. 28. Management has assessed the financial condition of the City of Miami Beach and noted no deteriorating financial condition. 29. The City of Miami Beach is not in a state of emergency based upon the conditions described in Section 218.503(1), Florida Statutes. 30. During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. Compliance Considerations In connection with your audit, conducted in accordance with Government Auditing Standards, we confirm that management: 31. Is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. 32. Is responsible with the laws, regulations, and provisions of contracts and grant agreements applicable to the City of Miami Beach. 33. Has identified and disclosed to the auditor th at there are no instances that have occurred, or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 34. Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that have a material effect on the determination of financial statement amounts. 35. Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statements. 36. Is responsible for the design, implementation and maintenance of internal control relevant to the prep aration and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 37.Acknowledges its responsibility for the design, implementation and maintenance of internal controls to prevent and detect fraud. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP Jun e 24, 2020 Page 6 38. Has taken tim ely and appropriate steps to remedy fraud; noncompliance with provisions of laws, regulations, contracts and grant agreements; or abuse that the auditor reports 39. Has a process to track the sta tus of audit finding s an d recommendations 40. Has identified for the auditor previous audits, atte station engagemen ts, or other studies related to the audit objectives and whether related recommendations have been im pleme nted. 41 Acknowledges its responsibilities as it relates to non-audit services performed by the auditor, including a statement that it assumes all management responsibilities; that it oversees the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge or experience; that it evaluates the adequacy and results of th e services performed, and that it accepts responsibility for the results of the services The¡City of Mia Jim Ci John w Iruff, Ch ie f Financial Officer . i lii.llj- Athison Williams Deputy Finance Director, CPA, CGFO, CGMA DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00ADBBE40D6 MIA 1B8 City of Miam i Beach, )700 Convention Center Drive, Miari Beach, Florida 33139, ww.miamibeachf.gov FINANCE DEPARTMENT June 24, 2020 RSM US, LLP 801 Brickell Avenue Suite 1050 Miami, FL 33131 In connection with your examination of the City of Miami Beach's (the City) compliance with Section 218.415, Florida Statutes, Local Government Investment Policies (the Statute) during the year ended September 30, 2019, in accordance with attestation standards established by the American Institute of Certified Public Accountants, we confirm, to the best of our knowledge and belief, the following representations made to you during the course of your engagement: 1. We are responsible for the City's compliance with the Statute and the selection of the criteria against which compliance is being evaluated. 2. The criteria is Section 218.415, Florida Statutes, Local Government Investment Policies. 3. We understand that we are responsible for determining that such criteria are appropriate for our purposes. 4. We are responsible for establishing and maintaining effective internal controls over the City's compliance wi th the Statute. 5. We have performed an evaluation of the City's compliance with the Statute. Based on our evaluation, the City has complied with the Statute during the year ended September 30, 2019. 6. There has been no known noncompliance with the Statute during the year ended September 30, 2019 or through the date of this letter. 7. There are no known communications from regulatory agencies, internal auditors or other pra ctitioners concerning the City's possible noncompliance with the Statute received by us during the year ended September 30, 2019 or through the date of this letter. 8. We have made available to you all documentation related to the City's compliance with the Statute. 9. There has been no knowledge of fraud or suspected fraud affecting the entity involving. DocuSign Envelope ID: 5B4 5F7 99-4807-4485-B 3F 7-E00AD 88E4 0D6 R S M U S LLP June 24, 2020 Pag e 2 a. Management b Employees who have significant roles in internal control. c. Others where fraud could have a material effect on the City's compliance with the Statute 10. We acknowledge our responsibility for the design and implementation of programs and controls to provide reasonable assurance that fraud is prevented and det ected 11 We have no knowledge of any allegations of fraud or suspected fraud affecting the City received in communications from employees. former employees, analysts, regulators, or others. 12. We have responded fully to all inquiries made to us by you during your engagem ent. 13 During the cours e of your engagem en t , you may have accumul ated records cont aining data that should be reflected in our books and records All such data have been so reflecte d . Accordingly, copies of such records in your possession are no longer needed by us. The City of Mi am i B ea ch , Flor id a ~ ç:~t--· __ _,-=::::;:. _ . Chief iaeia1 öñicer Allison Williams, Deputy Fi DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 II\!\ I v Al City of Miami Beach, N O0 C onventio n Center Drive, Miami Beach , Florida 33 139, www,miamibeochfl.gov FINANCE DEPARTMENT June 29, 2020 RSM US, LLP 801 Brickell Avenue, Suite 1050 Miami, FL 33131 In connection with your audit of federal awards and state projects conducted in accordance with Subpart F Of Title 2 US. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requi reme nts for Federal Awards (Uniform Guidance) and the audit of state projects conducted in accordance with Chapter 10.550, Rules of the Auditor General of the State of Florida (Chapter 10.550), for the year ended September 30, 2019 for the City of Miami Beach, Florida, we confirm the following. 1. We are responsible for complying and we have complied with the requirements of Uniform Guidance and Chapter 10.550, Rules of the Auditor General, State of Florida. 2. We are responsible for understanding and complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of our federal programs and state projects. 3. We have prepared the schedule of expenditures of federal awards and state financial assistance in accordance with Uniform Guidance and Chapter 10.550, and have included expenditures made during the period being audited for all awards provided by federal and state agencies in the form of grants, federal and state cost- reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance, as deemed applicable. 4. We have identified and disclosed all of our government programs and related activities subject to the Uniform Guidance and state compliance audit. 5. We have made available all federal awards and state projects (including amendments, if any) and any other correspondence relevant to federal and state programs and related activities that have taken place with federal and state agencies or pass-through entities. 6. We have identified and disclosed to you that there are no amounts questioned and no known noncompliance with the direct and material compliance requirements of federal and state awards, when applicable. 7. We believe that we have complied with the direct and material compliance requirements, except as disclosed in the Single Audit Reports in accordance with Uniform Guidance and Chapter 10.550 for the year ended Septem b er 30, 2019. 8. We have made available all documentation related to compliance with the direct and material compliance requirements, including information related to federal program and state projects financial reports and claims for advances and reimbursements. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 29, 2020 Page 2 9. We have provided you our interpretations of any compliance requirements that are subject to varying interpretations. 10. We have disclosed to you any communications from federal and state awarding agencies and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of your report, 11.We have disclosed to you findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of your report, when applicable. 12 . We are responsible for taking corrective action on audit findings of the compliance audit and have developed a corrective action plan that meets the requirements of the Uniform Guidance. 13 . We have provided you with all information on the status of the follow-up on prior audit findings by federal and state awarding agencies and pass-through entities, including all management decisions. 14, Th ere were no subsequent events that provide additional evidence wi th respect to conditions that existed at the end of the reporting period that affect noncompliance during the reporting period. 15. There are no changes in internal control over compliance or other factors that might significantly affect internal control, including any corrective action taken by us with regard to significant deficiencies in internal control over compliance (including material weaknesses in internal control over compliance), have occurred subsequent to the date as of wh ich compliance is audited. 16.Federal programs and state projects financial reports and claims for advances and reimbursements are supported by the books and records from which the basic financial statements have been prepared. 17.The copies of federal programs and state projects financial reports provided to you are true copies of the reports submitted, or electronically transmitted, to the federal agency or pass- through entity, as applicable. 18. We have monitored subrecipients to determine that they have expended pass-through assistance in accordance with applicable laws and regulations and the terms and conditions of the subaward and have met the other pass-through entity requirements of the Un i form Guidance and Chapter 10.550, wh en applicable. 19 .1f ap p lic ab l e , management has issued management decisions for audit findings that relate to federal awards it makes to subrecipients and that such management decisions are issued within six months of the acceptance of the audit report by FAC. Additionally, management has followed up to ensure that the subrecipient takes timely and app ropriat e action on all deficiencies detected through audits on-site reviews and other means th at pertain to the federal award provided to the subrecipient from the pass-through entity. 20. We have considered the results of subrecipient audits and have made any necessary adjustments to our own books and records, when applicable. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-EDDAD88E40D6 • RSM US LLP June 29, 2020 Page 3 21.We have charged costs to federal and state programs in accordance with applicable cost prin ciple s. 22. We are responsible for, and have accurately prepared, the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance and Ch apt er 10.550 23. We will accurately complete appropriate sections of the data collection form. We further acknowledge our responsibility for th e complete, accura te, and timely filing of th e data collection form wi th the Federal Audit Cl earinghouse. 24. We have disclosed all contracts or other agreemen ts with service organizations. We have disclosed to you all communications from service organizations relating to noncompliance at those organizations, when applicable. John 'o Chief Financial Officer lilli.. ison Williams Deputy Finance Director, CPA, CGFO, CGMA DocuSign Envelope ID: 5B4 5F 799-4807-4485-B3F7-E00AD 88E4 0D6 e City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miomibeochfl.gov FINANCE DEPARTMENT August3,2020 RSM US, LLP 801 Brickell Avenue, Suite 1050 Miami FL 33131 This representation letter is provided in connection with your audit of the basic financial statements of the Miami Beach Redevelopment Agency (the "Agency"), A Component Unit of the City of Miami Beach, Florida, as of and for the year ended September 30, 2019 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S . GA AP). We confirm, to the best of our knowledge and belief, that as of August 3, 2020. Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated July 30, 2019, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP 2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements th at are free from material misstatement, whether due to fraud or error. 3. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud. 4. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take. 5. Related-party transactions, including those with component units for which th e Agency is accountable, other organizations for which the nature and significance of their relationship with the Agency are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete, and interfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund transfers, long-term loans, leasing arrangements and guarantees, have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. 6. All events subsequent to the date of the financial statements, and for which US. GAP requires adjustment or disclosure, have been adjusted or disclosed 7. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAp DocuSign Envelope ID: 5B4 5F 799-4807-4485-B 3F7-E 00AD 88E4OD6 RSM US LLP August 3, 2020 Page 2 8. There are no unasserted claims or assessments that our lawyers have advised us are probable of assertion and must be disclosed in accordance with GASB Statement No. 10 and 62 beyond those accounted for in the Agency's risk retention estimated liabilities 9. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bondholders which is not disclosed in the financial statements. 10. We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 11. We have evaluated Governmental Accounting Standards Board ("GASB") Statement No. 83 Certain Asset Retirement Obligations and GASB Statement No.88 Certain Disclosures related to debt, including direct borrowings and direct placements, and have concluded that these accounting pronouncements did not or will not have any significant impact on the Agency's financial statements. 12. As of and for the year ended September 30, 2019, there were no uncorrected misstatements aggregated by you that should be considered in the final amounts reported in the financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement 13 We agree with the findings of specialists in evaluating our self-insurance program, the total OPEB and related OPEB amounts, the pension plans net pension liability and related pension amounts, and our arbitrage rebate liability and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements 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 their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists 14. We believe that the actuarial assumptions and methods used to measure the Agency's OPEB and pension liabilities and related costs for financial accounting purposes are appropriate in the circumstances. 15. We agree with the restatements of the previously issued financial statements discussed in Note 16. In that regard a. The restatem ents correct errors in those financial statements. b. We were not aware of the errors when those financial statements were issued. c. We are not aware of any other errors in those financial statements. d. The restatement did not cause or cure a debt covenant violation in the restated year or current year. e. The restatement did not cause or cure any noncompliance related matters in the restated year or current year. We do not believe it is necessary to recall those previously issued financial statements and all users of those financial statements will receive a copy of the current year's financial statements and independent auditor's accountant's report DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP August 3, 2020 Page 3 Inform ation Provided 16 We have provided you with. a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters; b. Additional information that you have requested from us for the purpose of the audit, c. Unrestricted access to persons within the Agency from whom you determined it necessary to obtain audit evidence; and d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared. 17. All transactions have been recorded in the accounting records and are reflected in the financial statements. 18. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud 19. We have no knowledge of allegations of fraud or suspected fraud affecting the Agency's financial statements involving. a. Management b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the financial statements. 20. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity's financial statements received in communications from employees, former employees, analysts, regulators, short sellers or others. 21. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations. 22. WVe have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. 23. We have disclosed to you the identity of the Agency's related parties and all the related-party relationships and transactions of which we are aware. 24 . E xce pt as d iscl o sed in your re p orts, we are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the Agency's ability to record, process, summarize and report financial data. 25. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices Supplementary Information 26. With respect to supplementary information presented in relation to the financial statements as a whole. DocuSign Envelope ID: 5B45F 799-4807-4485-B3F7-E0 0AD 88E40D6 RSM US LLP August 3, 2020 Page 4 a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S. GAAP. c. The methods of measurement or presentation have not changed from those used in the prior period d. When supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance of the supplementary information and the auditor's report thereon. 27. With respect to the Required Supplementary Information presented as required by the Governmental Accounting Standards to supplement the basic financial statements:. a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP c. The methods of measurement or presentation have not changed from those used in the prior period. 28 Management has assessed the financial condition of the Agency and noted no deteriorating financial condition. 29 . The Agency is not in a state of emergency based upon the conditions described in Section 218.503(1), Florida Statutes. 30. During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. Compliance Considerations In connection with your audit, conducted in accordance with Government Auditing Standards, we confirm that management. 31. Is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. 32. Is responsible with the laws, regulations, and provisions of contracts and grant agreements applicable to the Agency 33. Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 34. Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occurred, of noncompliance with provisions of contracts and gra nt agreements that have a material effect on the determination of financial statement amounts. Il fe DocuSign Envelope ID: 5B45F799-4807-4485-B 3F7-E00AD88E40D6 RSM US LLP August 3, 2020 Page 5 35 Has identified and disclosed to the auditor that there are no instances that have occurred, or are hkely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statements 36 Is responsible for the design, implementation and m ainten a nce of internal control relevant to the preparation and far presentation of financial statements that are free from material musstatement whether due to fraud or error 37 Acknowledges its responsibility for the design, implement ation and maintenance of internal controls to prevent and detect fraud 38 Has taken tunety and approp riate steps to remedy fraud, noncompliance with provisions of laws. regulations contracts and grant agreements, or abuse that the auditor reports 39. Has a process to track the status of audit finamgs and recommendations 40 +as identified for the auditor previous audits, attestation engagements or other studies related to the audit objectives and whether related recommendations have been implemented 41 Acknowdodges its responsibilities as i relates to non-audit services performed by the auditor, including a statement that it assumes al management responsibilities that it oversees the services by designating an individual, preferably w«thin senior management who possesses suitable skill. knowledge or experience, that it evaluates the adequacy and results of the services performed, and that it accepts responsiblty for tbe resutts of the services Miami Beach Redevelopment Agency ., }''> ---'"' _,_ •. , .... John Woodruft Chief Financial Officer ! tison Williams Deputy Finance Director DocuSign Envelope ID: 5B45F7 99-4807-4485-B3F7 -E00AD88E4 0D6 IA\I e City of Miami Beach, 1700 Convention Center Drive, M iam i Beach, Florida 33139, ww.miomibeachf.gov FINANCE DEPARTMENT August 3, 2020 RSM US, LLP 801 Brickell Avenue, Suite 1050 M iami. FL 33131 This representation letter is provided in connection with your audit of the financial statements of the Parking System Fund (the Fund) of the City of Miami Beach, Florida (the City), as of and for the year ended September 30, 2019 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (US. GAAP). We confirm, to the best of our knowledge and belief, that as of August 3, 2020 Financial Statements We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated July 30, 2019, for the preparation and fair presentation of the financial statements referred to above in accordance with US. GAAP. 2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error 3. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud. 4. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions abo ut conditions we expect to exist and courses of action we expect to take. 5. Related-party transactions, including those with component units for which the Fund is accountable, other organizations for which the nature and significance of their relationship with the Fund are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete, and interfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund transfers, long-term loans, leasing arrangements and guarantees, have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of US. GAAP 6. AII events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed. 7. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00ADBBE40O6 RSM US LLP August 3, 2020 Page 2 8. There are no unasserted claims or assessments that our lawyers have advised us are probable of assertion and must be disclosed in accordance with GASB Statement No.10 and 62 beyond those accounted for in the Fund's risk retention estimated liabilities. 9. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bondholders which is not disclosed in the financial statements. 10 We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 11. We have evaluated Governmental Accounting Standards Board ("GASB") Statement No. 83 Certain Asset Retirement Obligations and GASB Statement No.88 Certain Disclosures related to debt, including direct borrowings and direct placements, and have concluded that these accounting pronouncements did not or will not have any significant impact on the Fund's financial statements. 12 As of and for the year ended September 30, 2019, there were no uncorrected misstatements aggregated by you that should be considered in the final amounts reported in the financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. 13 We agree with the findings of specialists in evaluating our self-insurance program, the total OPEB and related OPEB amounts, the pension plans net pension liability and related pension amounts, and our arbitrage rebate liability and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements 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 their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists 14. We believe that the actuarial assumptions and methods used to measure the Fund's OPEB and pension liabilities and related costs for financial accounting purposes are appropriate in the circumstances. 15 We agree with the restatements of the previously issued financial statements discussed in Note 13 In that regard a. The restatements correct errors in those financial statements b. We were not aware of the errors when those financial statements were issued. c, We are not aware of any other errors in those financial statements. d. The restatement did not cause or cure a debt covenant violation in the restated year or current year. e. The restatement did not cause or cure any noncompliance related matters in the restated year or current year. We do not believe it is necessary to recall those previously issued financial statements and all users of those financial statements will receive a copy of the current year's financial statements and independent auditor's accountant's repo rt DocuSign Envelope ID: 5B4 5F799-4807-4485-B3F7-£00AD 88E4OD6 RSM US LLP August 3, 2020 Page 3 Information Provided 16. We have provided you with. a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters; b. Additional information that you have requested from us for the purpose of the audit; co. Unrestricted access to persons within the Fund from whom you determined it necessary to obtain audit evidence; and d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared. 17. All transactions have been recorded in the accounting records and are reflected in the financial statements. 18. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud. 19 . We have no knowledge of allegations of fraud or suspected fraud affecting the Fund's financial statements involving. a. Management b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the financial statements 20. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity's financial statements received in communications from employees, former employees, analysts, regulators, short sellers or ot her s. 21. We have no knowledge of noncompliance or suspected noncompliance wi th laws and regulations. 22. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. 23. We have disclosed to you the identity of the Fund's related parties and all the related-party relationships and transactions of which we are aware. 24. Except as disclosed in your reports, we are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the Fund's ability to record, process, summarize and report financial data. 25. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. Supplementary Information 26. With respect to supplementary information presented in relation to the financial statements as a whole: DocuSign Envelope ID : 5B4 5F7 99-4807-4485-3F7-E0 0AD 88E4 OD6 RSM US LLP August 3, 2020 Page 4 a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S GAAP. c. The methods of measurement or presentation have not changed from those used in the prior period d. When supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance of the supplementary information and the auditor's report thereon. 27. With respect to the Required Supplementary Information presented as required by the Governmental Accounting Standards to supplement the basic financial statements: a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP c. The methods of measurement or presentation have not changed from those used in the prior period 28. Management has assessed the financial condition of the Fund and noted no deteriorating financial condition. 29. The Fund is not in a state of emergency based upon the conditions described in Section 218.503(1), Florida Statutes. 30. During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. Compliance Considerations In connection with your audit, conducted in accordance with Government Auditing Standards, we confirm that management 31. Is responsible for the preparation and fair presentation of the financial statements in accordance with the applicabl e financial rep orting framework 32. Is responsible with the laws, regulations, and provisions of contracts and grant agreements applicable to the Fund 33. Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40O6 RSM US LL August 3, 2020 P a ge 5 34 Has ident ified and disclosed to the auditor that there are no instances that have occurred, or are hk ely to have occurred, of noncompliance with provisions of contracts and grant agreements that have a material effect on the determination of f«arc1al statement amounts 35 Has identified and disclosed to the auditor that there are no instances that have occurred, or are likely to have occ urred, of abase th at coul d be quantitativel y or qualitatively material to the financial statements 36 Is resp on sible for the desig n, implementation and ma inten ance of internal controi relevant to the preparation and far presentation of financial statements that are free from material misstatement, whether due to fraud or error 37 Ackno wledges ts respo nsibility for the design, mpiernentaton and maintenance of internal controls to prevent and detect fraud 38 Has taken timely and approp ri ate steps to remnedy fraud, non c omplia nc e wnth provisions of laws regulations, contracts and gra nt agreements. or abuse that the auditor repor ts 39 Has a process to track the status of audit fi g s an recommendations 40 Has identified for the auditor previous a udits attestation eng agem ents, or other studies re/ated to the audit object ives and wnether related recommendations have beer implemented 41 Acknowledges its respons ibilities as it relates to nor-audit services perform ed by the auditor icl udmng a st ateme nt that it assum e s ail manageme nt responsbiitias, that it oversees the services by designating an individual, preferably within senior ma nagement who possesses suitable skill, knowledge or experience that it evaluate s the adequacy and results of the ser vi c es perfor m e d. and th at it acce pts responsbnty for the resul ts of the services Jim Cito · ach Manager Joh Chio Financial Officer eat.o tiison Witframs , Deputy Fra nco DO1rector DocuSign Envelope ID: 5B4 5F799-4807-4485-3F7-E 00AD 88E4OD6 City of Miami Beach, 7OO Convention Center Drive, Miami Beach, Florido 33139, www.miamibeachfl.gov June 24, 2020 RSM US LLP 801 Brickell Avenue, Suite 1050 Mi am i, FL 33131 This representation letter is provided in connection with your audits of the Schedule of Expenditures for each of the Children's Trust Contracts (the "Schedule") of the City of Miami Beach (the "City") for the period ended September 30, 2019 (as defined in Note 2 of the Schedule) and the related notes to the Schedule for the purpose of expressing an opinion on whether the Schedule presents fairly, in all material respects, the contract budgets and expenditures for each of the Children's Trust Contracts of the City in accordance with accounting principles generally accepted in the United States (U.S. GAAP) We confirm to the best of o ur knowledge and belief, as of the date of this letter. Schedule of Expenditures 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated July 30, 2019 for the preparation and fair presentation of the Schedule referred to above in accordance with U.,S. GAP and the presentation requirements of the Children's Trust Fund contractual agreements. 2. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that is free from material misstatement, whether due to fraud or error. 3. We acknowledge our responsibility for the design, implementation and maintenance of internal controls to prevent and detect fraud. 4. All events subsequent to the date of the Schedule and for which U.S GAAP requires adjustment or disclosure have been adjusted or disclosed. 5. We have no knowledge of any uncorrected misstatements in the Schedule. C o m p lia n ce Considerations In connection with your audits conducted in accordance with Government Auditing Standards and the Children's Trust Fund contractual agreements, we confirm: 6. We are responsible for. a. Compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to the City. b. Establishing and maintaining effective internal control over financial reporting. 7. We have identified and disclosed to you. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 2 a. All laws and regulations that have a direct and material effect on the determination of the Schedule's amounts. b. There are no violations (and possible violations) of laws, regulations, and provisions of contracts and grant agreements whose effects should be considered for disclosure in the schedule of findings and questioned costs. c. There are no instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the Schedule or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. d. There are no instances that have occurred or are likely to have occurred, of noncompliance with provisions of contracts and gran t agreements that have a material effect on the determination of amounts or other financial data significant to the audit objectives. 8. We have a process to track the status of audit findings and recommendations. 9. We are responsible for complying, and we have complied, with the requirements of the Children's T rust Fund contractual agre em ents. 10. We are responsible for understanding and complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements. 11 We are responsible for establishing and maintaining, and we have established and maintained, effective internal control over compliance for the Children's Trust Fund that provides reasonable assurance that we are managing awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on the Schedule. 12. Management is responsible for and has accurately prepared the Schedule in accordance with the Children's Trust contractual agreements and have included expenditures made during the period bei n g audited for all awards provided by agencies in the form of grants, cost-reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance. 13. We have identified and disclosed to you the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on the Schedule. 14. We believe that we have complied with the direct and material compliance requirements of the Children's Trust Fund awards. If applicable, we have iden tified and disclosed to you all amounts questioned and all known noncompliance with the direct and material compliance requirements. 15. We have made available all documentation related to our compliance with the direct and material compliance requirements, including information related to the Children's Trust Fund financial reports and claims for advances and reimbu rsements. 16. We have provided you our interpretations of any compliance requirements that are subject to varying interpretations. 17. We have disclosed to you any communications from grantors and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 3 communications received from the end of the period covered by the compliance audit to the date of your report. 18. We have disclosed to you there have not been any findings received from previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audits, including from the end of the period covered by the compliance audits to the date of your report 19. We have disclosed the nature of any subsequent events that provide additional evidence with respect to conditions that existed at the end of the reporting period that affect noncompliance during the reporting period. 20. We are not aware of any known noncompliance with direct and material compliance requirements occurring subsequent to the period covered by your report 21. We have disclosed whether any changes in internal control over compliance or other factors that might significantly affect internal control including that which may have occurred subsequent to the date as of which compliance is audited. 22. The Children's Trust Fund financial reports and claims for advances and reimbursements are supported by the books and records from which the above-mentioned Schedule has been prepared. 23. The copies of Children's Trust Fund financial reports provided to you are true copies of the reports submitted, or electronically transmitted, to the Children's Trust or pass-through entity, as applicable. 24. Management has monitored subrecipients to determine that they have expended pass-through assistance in accordance with applicable laws and regulations and have met the requirements of the Children's Trust Fund contract agreements. 25. Management has considered the results of subrecipient audits and has made any necessary adjustments to the City's own books and records. 26. We have charged costs to the Children's Trust Fund contract agreements in accordance with applicable cost principles. 27. We have disclosed all contracts or other agreements with service organizations. 28. We have disclosed to you there have not been communications from service organizations relating to noncompliance at those organizations. 29. No events or transactions have occurred subsequent to the Schedule date and through the date of this letter that would require disclosure in the Schedule. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LLP June 24, 2020 Page 4 30. During the course of your audits, you may have accumulated records containing data which should be reflected in our books and records All such data have been so reflected. Accordingly. copies of such records in your possession are no longer needed y us Jo CF f 1 ì hi ttison Williams Deputy Finance Director DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40O6 à Ml MIBE H City of Miami Beach, )700 Convention Center Dive, Mi ami Beach, Florido 33139, www.miamibeachfl.gov January 3, 2020 RSM US LLP 801 Brickell Avenue, Suite 1050 Miami, FL 33131 Ladies and Gentlemen: We are providing this letter in connection with your audit of the Schedule of Expenditures of the Building Better Communities Bond Projects (the Schedule) of the City of Miami Beach, Florida, (the "Program") for the year ended September 30, 2019, we confirm that we are responsible for the fair presentation of the Schedule in conformity with accounting principles generally accepted in the United States of America. We confirm, to the best of our knowledge and belief, as of the date of this letter: The Schedule 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated July 30, 2019, for the preparation and fair presentation of the Schedule referred to above in accordance with U.S. GAAP. 2. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that are free from material misstatement, whether due to fraud or error. 3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 4. Significant assumptions used by us in making accounting estimates are reasonable and reflect our judgment based on our knowledge and experience about past and current events and our assumptions about conditions we expect to exist and courses of action we expect to take, when applicable. 5. There are no related-party transactions that are required to be reported in the Schedule. 6. All events subsequent to the date of the Schedule and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed, when applicable. 7. There are no actual or possible litigation and claims that are required to be accounted for and disclosed in accordance with U.S. GAAP related to the Program. 8. We are not aware of any pending or threatened litigation, claims, or assessments that are required to be accrued or disclosed in the Schedule. 9. We have complied with all aspects of contractual agreements that would have a material effect on the Program's Schedule in the event of noncompliance. 10. We have no knowledge of any uncorrected misstatement in the Schedule. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 R S M U S LL P P a g e 2 of 4 Information Provided 11.We have provided you with: a. Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the Schedule such as records, documentation, and other matters; b. Additional information that you have requested from us for the purpose of the audit; c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. d. Minutes of the meetings of the governing boards and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared which are relevant to the Program. 12. AII transactions have been recorded in the accounting records and are reflected in the Schedule. 13. We have disclosed to you the results of our assessment of risk that the Schedule may be materially misstated as a result of fraud. 14.We have no knowledge of allegations of fraud or suspected fraud, affecting the Program involving: a. Management. b. Employees who have significant roles in the internal control. c. Others where the fraud could have a material effect on the Schedule. 15. We have no knowledge of any allegations of fraud or suspected fraud affecting the Schedule received in communications from employees, former employees, or others. 16.We have no knowledge of noncompliance or suspected noncompliance with laws and regulations whose effects should be considered when preparing the Schedule. 17.We are not aware of any pending or threatened litigation and claims whose effects should be considered when preparing the Schedule of the Program. 18. We are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize, and report financial data. 19. We are not aware of any communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 20. During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. In connection with your audit of the Program conducted in accordance with the Program-Specific Audit Option under Miami-Dade County, Florida Ordinance 05-47, Applicable Resolutions and Building Better Communities, Administrative Rules (Ordinance 05-47), we confirm: 21. We are responsible for complying, and we have complied, with the requirements of Ordinance 05-47. 22. We are responsible for understanding and complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to the Program. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 R S M US LLP Page 3 of 4 23. We are responsible for establishing and maintaining, and we have established and maintained, effective internal control over compliance for the Program that provides reasonable assurance that we are managing the Program in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on the Program. 24. We have prepared the Schedule in accordance with Ordinance 05-47 and have included all Program expenditures made during the period. 25. We have identified and disclosed to you the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on the Program. 26. We have made available all contracts and grant agreements (including amendments, if any) and any other correspondence relevant to the Program and related activities that have taken place. 27.We have identified and disclosed to you that there are no amounts questioned and there is no known noncompliance with the direct and material compliance requirements of the Program. 28. We believe that we have complied with the direct and material compliance requirements of the Program. 29. We have made available all documentation related to compliance with the direct and material compliance requirements, including information related to the Program's financial reports and claims for advances and reimbursements. 30. We have provided you our interpretations of any compliance requirements that are subject to varying interpretations. 31. There have been no communications with the grantor concerning noncompliance with the reporting requirements of the Program. 32. Management has disclosed to the auditor the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of your report (when applicable). 33. There are no subsequent events that provide additional evidence with respect to conditions that existed at the end of the reporting period that affect noncompliance during the reporting period. 34. There is no known noncompliance with direct and material compliance requirements occurring subsequent to the period covered by your report. 35. There are no changes in internal control over compliance or other factors that might significantly affect internal control, subsequent to the date as of which compliance is audited. 36. Program financial reports and claims for advances and reimbursements are supported by the books and records from which the Schedule have been prepared. 37.The copies of Program financial reports provided to you are true copies of the reports submitted, or electronically transmitted to Miami-Dade County, Florida. 38. We have charged costs to Program in accordance with applicable cost principles. DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RS M US LLP P age 4 of 4 is rales John CFO Allison Williams Deputy Finance Director DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Exhibit 8-Significant W ritten Communications Betw een Management and Our Firm DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Single Audit Reports in Accordance With the Uniform Guidance and Chapter 10.550, Rules of the Auditor General of the State of Florida Year Ended September 30, 2019 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Contents 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 1-2 Independent auditor's report on compliance for each major federal program and state project; report on internal control over compliance; and report on the schedule of expenditures of federal awards and state financial assistance required by the Uniform Guidance and Chapter 10.550, Rules of the Auditor General, State of Florida 3-5 Schedule of expenditures of federal awards and state financial assistance Notes to schedule of expenditures of federal awards and state financial assistance Schedule of findings and questioned costs Summary schedule of prior audit findings 6-8 9 10-15 16 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 RSM US LL.P 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 Independent Auditor's Report To the Honorable Mayor and Members of the City Commission City of Miami Beach, 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, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami Beach, Florida (the City), as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated June 24, 2020. Our report included a reference to other auditors who audited the financial statements of the City of Miami Beach Employees' Retirement Plan, City of Miami Beach Pension fund for Firefighters and Police Officers, City of Miami Beach Policemen's Relief and Pension Fund, and the City of Miami Beach Firefighters' Relief Pension Fund, as described in our report on the City's financial statements. This report does not include the results of the other auditors' testing on internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of the City of Miami Beach Policemen's Relief and Pension were not audited in accordance with Government Auditing Standards. Our report included a emphasis of matter paragraphs for the City's restatement of the beginning net position of the governmental activities, business type activities, stormwater utility fund, water and sewer fund, parking system fund, convention center fund and the aggregate remaining fund information to reflect a correction of an error in the recording of the net other post-employment benefit (OPEB) liability and related deferred outflows, inflows and OPEB expense. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City'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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying schedule of findings and questioned costs, we did identify certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. THE POWER OF BEING UNDERSTOOD AUDIT TAX I CONSULTING DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E4OD6 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. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2019-001 to be a material weakness. 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. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2019-002 to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on 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 instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. City's Response to Findings The City's response to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. 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. Miami, Florida June 24, 2020 2 DocuSign Envelope ID: 5845F799-4807-4485-B3F7-E00AD88E40D6 RSM US LL.P Report on Compliance for Each Major Federal Program and State Project; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards and State Financial Assistance Required by the Uniform Guidance and Chapter 10.550, Rules of the Auditor General, State of Florida Independent Auditor's Report The Honorable Mayor and City Commissioners City of Miami Beach, Florida Report on Compliance for Each Major Federal Program We have audited the City of Miami Beach, Florida's (the City) compliance with the types of compliance requirements described in the 0MB Compliance Supplement and the requirements described in the Florida Department of Financial Services' State Project Compliance Supplement, that could have a direct and material effect on each of the City's major federal programs and state projects for the year ended September 30, 2019. The City's major federal programs and state projects are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal and state statutes, regulations, and the terms and conditions of its federal awards and state financial assistance applicable to its federal programs and state projects. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and Chapter 10.550, Rules of the Auditor General, State of Florida. Those standards and the Uniform Guidance and Chapter 10.550, Rules of the Auditor General, require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or major state project occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2019. THE POWER OF BEING UNDERSTOOD AUDIT I TAX ICONSULTNG 3 f M U :,...,1/£/u Ne' i+++@ ,}±£@sa! è¿in,i #te ak ++ß#,+i+t w«+t.ti» ±ed,9!ti,fn. és' +S A n ats"a: 0i4et +z8%4±±° „a9r ai DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E4OD6 Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General and which is described in the accompanying schedule of findings and questioned costs as item 2019-003. Our opinion on each major federal program and state project is not modified with respect to these matters. The City's response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program and state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project and to test and report on internal control over compliance in accordance with the Uniform Guidance and Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We identified a certain deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2019-003 that we consider to be a significant deficiency. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards and State Financial Assistance Required by the Uniform Guidance and Chapter 10.550, Rules of the Auditor General We have audited the financial statements of the City as of and for the year ended September 30, 2019, and have issued our report thereon dated June 24, 2020, which contained an unmodified opinion on those financial statements and included an emphasis of matter paragraph due to the restatement of beginning net position of the governmental activities, business type activities, stormwater utility fund, water and sewer fund, parking system fund, convention center fund and the aggregate remaining fund information to reflect a correction of an error in the recording of the net other post-employment benefit (OPEB) liability and related deferred outflows, inflows and OPEB expense. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of 4 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by the Uniform Guidance and Chapter 10.550, Rules of the Auditor General and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards and state financial assistance is fairly stated in all material respects in relation to the financial statements as a whole. Miami, Florida June 29, 2020, except for our report on the Schedule of Expenditures of Federal Awards and State Financial Assistance, for which the date is June 24, 2020 5 DocuSign Envelope ID: 5B4 5F799-4 807-4485-3F7 -E00AD 88E4 0D6 City of Miami Beach, Florida Schedule of Expenditures of Federal Awards For the Fiscal Year Ended September 30, 2019 Federal Granton/Pass-Through Grantor/Program or Cluster 77 te U.S. Department of Agriculture Passed-through the State ot Florida Department ot Agriculture: Consolidated Payment Grant/Urban and Community Forestry Total U.S. Department of Agriculture U.S. Department ot Housing and Urban Development Direct Programs: Community Development Block Grant/ Entitlement Grants Community Development Block Grant! Entitlement Grants Community Development Block Grant Entitlement Grants Community Development Block Grant/ Entitlement Grants Community Development Block Grant/ Entitlement Grants Community Development Block Grant/ Entitlement Grants Community Development Block Grant Entitlement Grants Total Community Development Block Grant - Entitlement Grants Cluster Direct Programs: Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Home Investment Partnerships Program Total HOME Investment Partnerships Program Passed-through Miami-Dade County, Florida: Supportive Housing Program.FY 2017/Continuum of Care - City of Miami Beach Outreach Program Supportive Housing Program.FY 2018/Continuum of Care - City of Miami Beach Outreach Program Total Supportive Housing Program - Continuum ot Care Total U.S. Department oft Housing and Urban Development Pass-Through Entity Passed through to Current Year prior Year Total Federal Grant/Contract Number [dentitytng Number Federal CFDA Subreciplents Federal Expenditure Adjustments FXpengitures 17.0G-11083112-001 10.664 $ $ 12.500 $ s 12,500 12,500 12,500 8-19-MC0-12-0014 14.218 680 680 -17-MC-12-0014 14.218 169,800 169,800 B-14-MC-12-0014 14.218 341,758 341,758 -18-MC-12-0014 14.218 150,519 454,988 454,988 8-11-MC-12-0014 14.218 150 150 -12-M40-12-0014 14.218 24 24 -15-MC-12-0014 14.218 35 670 35.670 150.512 1,003,070 1,003,070 M-09-MC120212 14.239 20,755 20.755 M-10-MC120212 14.239 720,442 720.442 M-16-MC120212 14.239 (39,962) (39,962) M-19-MC120212 14.239 1,832 1,832 MM-12-Mc120212 14.239 36 36 M-13-MC120212 14.239 53,105 53,105 MM-17-M0120212 14.239 111,602 111.602 M-18-MC120212 14.239 35.941 35.941 s03.751 903,751 FLO+77L4D001710 14.267 42,051 42.051 FLO+77L4D0001811 14.267 21,028 21.028 63,079 63,079 1sos1s 1,969,900 1,969.900 U.S. Department of Justice Direct Programs: Edward Byrne Memorial Justice Assistance Gr ant Program- JAG Program (FY2017) - Miami Beach Mobile License Plate Reader Trailer Edward Byrne Memorial Justice Assistance Grant Program- JAG Program (FY2018)- Local Solicitation Edward Byrne Memorial Justice Assistance Grant Program- City of Miami each Police Department's Closed Circuit Television Program Passed-through the Florida Department of Law Enforcemenet: Keeping Police Rifles Out of Criminal Hands Total Edward Byrne Memorial Justice Assistance Grant Program Passed-through the Ofce ot the Florida Attorney General: VOCA -VCTIMS OF CRIME ACT 2017/18 VOCA -VICTIMS OF CRIME ACT 2018/19 VOCA -VCTIMS OF CRIME ACT 2019/20 Total VOcA -Victims ot crime Act 2017-0J-8X-0775 16.738 68,114 68.114 2018-04-8X-0785 16.738 66,244 66.244 2016-DJ-X-0856 16.738 69.112 69.112 2017-M0-8X-0187 16.738 8,388 8.388 211,858 211,858 VOCA-2017-M8PD0-00001 16.575 (459) (459) VOCA-2018-MPD-00031 16.575 577,956 577.956 V0CA-2019-M8PD0-00006 16.575 193 193 577,690 S77.s90 6 DocuSign Envelope ID: 5B4 5F7 99-4 807-4485-3F7 -E00AD 8E 4 0D6 City of Miami Beach, Florida Schedule of Expenditures of Federal Awards For the Fiscal Year Ended September 30, 2019 Feder al Gran tor/Pass-Th rough_G ran ton/P rogr am or Cl uster Title Direct Program s: Edward Byrne Memorial Competitive Grant Program - City of Miami Beach Smart Policing Initiative for Body-Worn Camera Data- Sharing Federal Equitab le Sharin g Agr eem ent Total U.S. Departm ent ot Justice U.S. Departm ent ot Transpor tation Passed-through th e Florida Departm en t ot Tran sportation : Highway Pl anni ng and Construction-Middle Beach Recreational Corridor Phase 2 Highway Plannin g and Construction - Sate Routes to School- Fienberg-Fisher K Center Highway Planning and Construction - Sate Routes to School Infrastructure Project- Biscayne Elementary School Highway Planning and Construction - Sate Routes to School Intrastucture Project - North Beach Elementary School & Nautilus Middle Highway Planning and Construction - each Walk II Construction (3rd to 5th Streets along each) Tota Highway Planning and Construction Cluster Passed-through the Florida Department ot Transportation: State and Community Highway Safety Program (NHTSA 402 Funds) - Miami Beach Police Department Motorcycle Safety Campaign National Priority Safety Program (NHTSA 405 Funds) - Miami Beach Police Department Impaired Driving Initiative Total Highway Safety Cluster Total U.S. Department ot Transportation U.S. Department ot Homeland Security Passed-through the State ot Florida Department ot Emergency Management: Hurricane Matthew - via Mutual Aide Agreement Hurricane Harvey - via Mutual Aide Agreement Hurricane Maria - via Mutual Aide Agreement Hurricane Michael - via Mutual Aide Agreement Hurricane lrma Total Emergency Management - Hurricane Irma Direct Programs: Emergency Food and Shelter Program Preparing Communities tor Complex Coordinated Terrorist Atacks (CCTA) Grant Program 2016 2017 Assistance to Firefighters Grant Passed-through the Federal Emergency Management Agency. Volunteer Florida CERT Contract Agreement 2018-2019 Passed-through the State ot Florida Division ot Emergency Management: Homeland Security Grant Program -Urban Areas Security Initiative 2017 Total U.S. Department of Homeland Security TOTAL EXPENDITURES OF FEDERAL AWARDS Pass-Through Entity Passed through to Current Year Prior Year Total Federal Grant/Contract Number ldenttying Number Federal CFDA Subreciptents Federal Expenditure Adjustments xpenaitures 2015-W¥Y-8X-0002 16.751 s s 140.472 S s 140,472 FL0130700 16.922 --- -- 126.595 126.595 1,056,615 1,056,615 G0l26 20.205 1,438.524 1,438,524 D6 17-028-/GOK85 20.205 13.918 13,918 D6 17-030-/G0K83 20.205 (2,067) (2,067) D617-029-8.G0K84 20.205 4,843 4,843 GO071 20.205 115.220 115.220 1,570,438 1,570,438 G1047 20.600 74,856 74,856 G1s21 20.616 35.594 35.594 110.450 110,450 1,680,888 1,680,888 05-008.-16 97.036 8,536 8,536 2017.0014 97.036 26,680 26,680 Not available 97.036 32.574 32,574 02-028-18 97.036 390.289 390,289 08-45025-00 97.036 752 791 752.791 1,210,870 1,210,870 159400-076 97.024 23,433 23,433 EMW-2016-GR-00097-s01 97.133 16.252 16,252 EMW-2017.FO-05796-002 97.044 45.455 45,455 G428 CERT TA-T 97.042 4.968 4,968 17-0$-X3-11-23-02-376 97.067 93,470 93,470 183,578 1,210,870 1,394,448 150,519 $ 4,903,481 1210¿72 $ 6,114,351 See notes to schedule of expenditures ot federal awards and state financial assistance. 7 OocuSign Envelope ID: 5B4 5F799-4807-4485-B3F7-£00AD 88E40D6 City of Miami Beach, Florida Schedule of Expenditures of State Financial Assistance For the Fiscal Year Ended September 30, 2019 State Grantor/Program Grant/Contract Number Pass-Th rough Entity Iden tifying Number State ot Florida.Department ot Environmental Protection Passed through to Current Year State CSFA Subrecipients Federal Expenditure Prior Year Adjustme nts Total Federal Expenditures Direct Programs: Florida Resilient Coastline Program (FRCP) Statewide Surface Water Restoration and Wastewater Projects - Miami Beach Water Line Replacement on Alton Road from Michigan Ave to North Bay Rd. and 43rd Street to 63rd Street Project Statewi de Surace W ater Rest oration and W astew ater Projects (Cl ean W ater State Revolvi ng Loan Agreement) Total State o! Florida, Departm en t of Environmental Protection State o! Florida_H ousin g Fi nance Corporation Di rect Program : Stat e Housing Initiatives Partn er ship (SHIP ) Program R1801 LP13134/1P13135 SW131300 NIA 40.901 Total State ot Flo rida, Housing Finance Corporation Fl orida Departme nt ot State and Secretay ot State Di rect Programs : St FL- Div of Historical Resources -41st Street and Pinetree Drive Fountain 28th Street Obelisk Restoration Project Total Florida Departme nt ot State and Secretary of State Fl6 rid a Departm ent 6t Transportation Direct Programs : A1A Indian Creek Corridor Locally Funded Agreement - Transportation Management Initiative Agreement Public Transit Service Development Program - Middle Beach Loop Trolley Route Total Florid a Departme nt ot Tr an sportation Flo rid a Departme nt ot Children and Fam ilies Direct Program: Florida Coalition Against Domestic Violence - Law Enforcement Equipment 2019 1g.h.sm, 100,077 SC729 AS-343/439228-2-58-01 422239-2-12-01 GOY95 19-8059-lE Equipment 37.098 37.039 37.077 45.031 45.032 55.U01 55.039 55.012 60.134 24,598 $ 219,756 419_102 663.456 628.904 628,904 6,800 132,386 139,186 1,198,880 19,871 500000 1,718,751 14,351 Total Florida Departm ent ot Children and Fami lies 14,351 Flo rida Departme nt ot Health Direct Program s : Emergency Medical Services (EMS) Matching Awards Emergency Medical Services (EMS) Matching Awards Passed-through Mi am i-D ade County , Flo rida: County Award Grant - Emergency Medical Services (EMS) Matching Awards County Award Grant - Emergency Medical Services (EMS) Matching Awards M7036 M6077 c7013 C4013,C5013,C6013 64,003 64.003 23,214 58,500 64.005 64.005 2,896 12.002 Total Florida Departm ent ot Health 96.612 Fl or ida Departm ent ot Law Entorc em ent Di rect Program : Victim or Witness Assistance F18-2644A4 71.006 Total Fl orida Departme nt ot Law Enforceme nt TOTAL EXPEN DITU RES OF STATE FINAN CIAL AS SISTANCE 24.598 219,756 419,102 S63.45s 628.904 628,904 6.800 132,386 139,186 1,198.880 19,871 500.000 1,718,751 1351 14,351 23.214 58,500 2.896 12.002 96.s12 10.58£ 10,589 10,589 10,589 4 589 $ 3,271,849 3.261.260 ? See notes to schedule of expenditures of federal awards and state financial assistance. 8 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance Note 1. Basis of Presentation The accompanying schedules of expenditures of federal awards and state financial assistance (the Schedules) include the federal and state award activity of the City of Miami Beach, Florida (the City) under programs of the Federal government and the State of Florida for the year ended September 30, 2019. The information in these Schedules are presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and Chapter 10.550, Rules of the Florida Auditor General. Because these Schedules present only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in fund balance/net position, or cash flows of the City. The City's reporting entity is defined in Note 1 of the City's basic financial statements. Note 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting for expenditures accounted for in the governmental funds and on the accrual basis of accounting for expenses of the proprietary fund types, which are described in Note 1 to the City's basic financial statements. Such expenditures/expenses are recognized following the cost principles contained in the Uniform Guidance and Chapter 10.550, Rules of the Auditor General of the State of Florida, wherein certain types of expenditures/expenses are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Note 3. Indirect Cost Recovery The City has not elected to use the 10 percent de mini mis indirect cost rate as allowed under the Uniform Guidance. Note 4. Subreci pients Certain program funds are passed through the City to subrecipient organizations. Subrecipients are noted on the schedule as "passed through to subrecipents". Note 5. Loans Outstanding On November 12, 2014, the City entered into the Clean Water State Revolving Fund Loan Agreement with the State of Florida Department of Environment Protection. The semiannual loan payment amount is based on the total amount of $7,797,500 which consist of the Loan principal plus the estimated Loan Service Fee. Loan payments commenced on February 15, 2018 and semiannually thereafter on August 15 and February 15 of each year until all amounts due have been fully paid. The interest rate on this loan is 1.62% per annum. The loan shall be repaid in 40 semiannual loan payments of $229,001, which is $458,002 per year. Loan disbursements from the State to the City will be made for reimbursements of allowable costs. The loan is recorded as a loan payable in the governmental activities of the City's government wide statements. As of September 30, 2019, $7.4 million of allowable costs have been incurred by the City and $6.2 million has been reimbursed from the State. The loan is secured by the Stormwater fund's pledged revenues and will be repaid with such funds. 9 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects Section I • Summary of Auditors' Results Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified? Noncompliance material to financial statements noted? Federal Awards Internal control over major federal programs: Material weakness(es) identified? Significant deficiency(ies) identified? Type of auditor's report issued on compliance for major federal programs: Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a)? Identification of major federal programs: Federal CFDA No. 20.205120.219 97.036 Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? X Yes ----- X Yes Yes No ----- None reported ----- X Yes ----- Yes No X No ----- X None reported ----- Unmodified Yes X No Name of Federal Program or Cluster Highway Planning and Construction Cluster Disaster Grants - Public Assistance $750,000 X Yes No (Continued) 10 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects (Continued) State Financial Assistance: Internal control over major projects: Material weakness(es) identified? Significant deficiency(ies) identified? Yes ---- Yes X No ---- lone reported X Type of auditor's report issued on compliance for major projects: Any audit findings disclosed that are required to be reported in accordance with Chapter 10.550, Rules of the Auditor General? Unmodified X Yes No Identification of major state projects: State CSFA No. Name of State Project 40.901 State Housing Initiatives Partnership Programs (SHIP) 55.U01 A1A Indian Creek Corridor Dollar threshold used to distinguish between type A and type B projects: $750,000 (Continued) 11 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects (Continued) Section II. Financial Statement Findings A. Internal Control Over Financial Reporting IC 2019-001- Restatement Criteria: Internal control policies and procedures should provide reasonable assurance regarding the reliability of the financial reporting process, including the selection of significant assumptions used in the accurate recording and disclosure of accounting transactions. Condition: A material accounting adjustment was made to the financial statements to comply with generally accepted accounting principles with regard to the recording of the net other postemployment benefit liability. Due to a misunderstanding between the City and its third party specialist actuary, the incorrect discount rate was applied by the actuary resulting in an understatement of the estimated liability for other postemployment benefits (OPEB). Management relied on the actuary's expertise and did not identify the error in its review of the actuarial report. Context: The condition is an isolated incident relating to the net OPEB liability, which is actuarially determined. Cause: Established controls requiring the reconciliation and review of account balances failed to identify the error noted. There was a communication breakdown and misunderstanding between the actuary and the City regarding the amount being contributed by the City to the trust on an annual basis. Based on the level of funding to the plan the incorrect discount rate was applied by the actuary. Effect The net OPEB liability as of 9/30/2018 was understated. As a result, effective October 1, 2018 beginning net positions of the governmental activities, business type activities, discrete component unit, and the proprietary funds were restated to reflect the effect of correcting the beginning balance of the net OPEB liability and related deferred inflows and outflows. Recommendation: We recommend that management establish a process to review all actuarial assumptions in detail with the actuary before they perform their actuarial valuation to identify potential misunderstandings on a timely basis. The final report should also be reviewed as part of the reconciliation process and adjustment of the impacted accounts. Views of Responsible Officials and Planned Corrective Action: The City adopted GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the fiscal year ended September 30, 2018. At that time the City relied on the actuary's expertise for the actuarial report including assumptions and appropriate discount rates. GASB 75 is a complex accounting standard with many components including significant analysis of the City's benefits and funding methodology. Like all significant accounting standards, an entity may not have all assumptions accurately measured in the first year of implementation, as is the case here. A complete review by the Actuary and the City took place in the second year of implementation, resulting in a change in the discount rate and the need for a restatement. Going forward, the City will review the actuarial report and assumptions used before accepting the final actuarial report. As part of the year-end reconciling and closing process, all third party reports, journal entries and balance sheet analysis will be performed in a timely manner. 12 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects (Continued) IC 2019-002 - Reporting Errors Criteria: Internal control policies and procedures should provide reasonable assurance regarding the reliability of the financial reporting process, including the accurate recording and disclosure of accounting transactions. Condition: Amounts due from other governments for the capital projects fund and other special revenue fund that related to grant reimbursements were not recorded as receivables since the funds were not received within the City's availability period for revenue recognition on the modified accrual basis of accounting. However, in accordance with GASB Statement No. 33, the receivable and an offsetting deferred inflow of resources for unavailable revenue should have been recorded as soon as all grant eligibility requirements had been met. Additionally, the government wide accrued interest payable entry was calculated incorrectly as of September 30, 2019. Context: Isolated. These were both year-end post-closing adjustments recorded once a year. Cause: Supervisory reviews were ineffective in detecting errors prior to approving journal entries. Effect: The accrued interest liability in the statement of net position was understated in the preliminary trial balance and the due from other governments were understated for the reimbursement of grant related expenditures that met the eligibility requirements but had not been collected within 45 days of year-end. The due from other governments and grant revenue were understated in the governmental activities opinion unit as well. Recommendation: We recommend the City: 1. Ensure that supervisory reviews are performed by staff knowledgeable about the transactions they are approving. Further, ensure review procedures are designed in a manner that will detect errors relating to these transactions prior to approving journal entries in the financial system. 2. Implement procedures such as year-to-year analytical comparisons to identify instances of significant changes in reported balances. Views of Responsible Officials and Planned Corrective Actions: The Finance Department has faced many challenges in reporting for the fiscal year ending September 30, 2019, including turnover in key positions such as the Accounting Manager and Grant Compliance Monitoring position. In addition, the COVID-19 pandemic has placed significant strain on staff ranging from displacement to competing priorities and illness. The Department will as they have done in normal years, ensure that qualified staff perform substantive reviews and analysis. As part of the year end reconciling and closing process all journal entries and balance sheet analysis will be performed in a timely manner. B. Compliance No matters to report. 13 O ocuSign Envelope ID: 5B4 5F 799-4807-4485-3F7-E 00AD88E4 OD6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects (Continued) Section Ill. Federal Awards and State Projects Findings and Questioned Costs A. Internal Control Over Compliance Federal Awards No matters to report. State Projects IC 2019-003 Reporting Florida Housing Finance Corporation CSFA#: State Housing Initiatives Partnership Program (SHIP) CSFA No. 40.901 Criteria: Pursuant to the reporting requirements for the State Housing Initiatives Partnership Program (SHIP): An annual report and certification is required to be completed and submitted to Florida Housing by September 15 of each year pursuant to Section 420.9071 (4). Condition: The annual report certification was not submitted by the due date stipulated by Florida Housing. Questioned Costs: Undeterminable. Context: Isolated matter. Effect Failure to comply with program requirements could result in loss of grant funding. Cause: The City did not have a control in place to ensure timely filing of the audited certification report. Recommendation: We recommend that City personnel in charge of administering grant compliance, review the City's grant requirements and implement a control to ensure the timeliness of submission of required reports to grantors. Views of Responsible Officials and Planned Corrective Action: The City will ensure that control measures are in place to comply with timely submission of future certifications. For this specific certification, the Office of Housing and Community Services experienced delays in the internal form approval process. Future streamlining of the process will eliminate delays and result in timely filing. In addition, the Finance Department will help monitor the timely filing of the certification. B. Compliance Federal Awards No matters to report. 14 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Findings and Questioned Costs Federal Awards Programs and State Projects (Continued) State Projects CF 2019-001 Reporting Florida Housing Finance Corporation CSFA#: State Housing Initiatives Partnership Program (SHIP) See Section Ill - Federal Awards Findings and Questioned Costs IC 2019- 003 -- Reporting CSFA No. 40.901 15 DocuSign Envelope ID: 5B45F 799-4807-4485-B3F7-E00AD88E40D6 City of Miami Beach, Florida Schedule of Prior Year Audit Findings Finding# Program Finding Status 2018-001 NIA Financial Statement Finding Corrective action has been taken 16 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E4OD6 City of Miami Beach, Florida Management Letter in Accordance With Chapter 10.550, Rules of the Auditor General of the State of Florida Year Ended September 30, 2019 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Contents Management letter in accordance with the Rules of the Auditor General of the State of Florida 1-2 Independent Accountants Report on Compliance with Section 218.415 Florida Statutes 3 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 a RSM US LLP Management Letter in Accordance With the Rules of the Auditor General of the State of Florida The Honorable Mayor and Members of the City Commissioners City of Miami Beach, Florida Report on the Financial Statements We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Miami Beach, Florida (the City) as of and for the fiscal year ended September 30, 2019, and have issued our report thereon dated June 24, 2020. We did not audit the financial statements of the Miami Beach Employees' Retirement Plan, the City of Miami Beach Pension Fund for Firefighters and Police Officers, City of Miami Beach Policemen's Relief and Pension Fund, and the City of Miami Beach Firefighters' Relief and Pension Fund, which represent 82% of the assets/deferred outflows, 48% of the fund balance/net position and 88% of the revenues/additions of the aggregate remaining fund information. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Employees' Retirement Plan, Miami Beach Pension Fund for Firefighters and Police Officers, City of Miami Beach Policemen's Relief and Pension Fund, and the City of Miami Beach Firefighters' Relief and Pension Fund are based upon the reports of the other auditors. This report does not include the results of the other auditors' testing on internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. Our report included an emphasis of matter paragraphs for the City's restatement of the beginning net position of the governmental activities, business type activities, stormwater utility fund, water and sewer fund, parking system fund, convention center fund and the aggregate remaining fund information to reflect a correction of an error in the recording of the net other post-employment benefit (OPEB) liability and related deferred outflows, inflows and OPEB expense. Auditor's Responsibility 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; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance) and Chapter 10.550, Rules of the Auditor General of the State of Florida. Other Reporting Requirements We have issued our Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards; Independent Auditor's Report on Compliance for Each Major Federal Program and State Project and Report on Internal Control Over Compliance, Schedule of Findings and Questioned Costs, and Independent Accountant's Reports on an examination conducted in accordance With A/CPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule should be considered in conjunction with this management letter. THE POWER OF BEING UNDE RS TO OD JD1T / TAX1CONSULTING DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 Prior Aud it Findings Section 10.554(1 )(i) 1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding financial audit report. There were no findings in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The information is disclosed in Note 1 to the City's financial statements. Financial Condition and Management Sections 10.554(1 )(i)5.a, and 10.556(7), Rules of the Auditor General, requires us to apply appropriate procedures and communicate the results of our determination as to whether or not the City has met one or more of the conditions described in Section 218.503(1 ), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1), Florida Statutes. Pursuant to Sections 10.554(1 )(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the City's 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. Section 10.554(1 )(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Special District Component Units Section 10.554(1)(i)5.c., Rules of the Auditor General, requires, if appropriate, that we communicate the failure of a special district that is a component unit of a county, municipality, or special district, to provide the financial information necessary for proper reporting of the component unit within the audited financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we did not note any special district component units that failed to provide the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida Statutes. Additional Matters Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate 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. In connection with our audit, we did not have any such findings. Purpose of This Letter 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, the Honorable Mayor and City Commissioners, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Miami, Florida June 24, 2020, except for the report on compliance for each major federal program and state project and report on internal control over compliance, for which the date of each report is June 29, 2020 2 DocuSign Envelope ID: 5B45F799-4807-4485-B3F7-E00AD88E40D6 ma RSM US LLP Independent Accountant's Report The Honorable Mayor, Members of the City Commission, and City Manager City of Miami Beach, Florida We have examined the City of Miami Beach, Florida's (the City) compliance with Section 218.415, Florida Statutes, and Local Government Investment Policies during the period October 1, 2018 to September 30, 2019. Management of the City is responsible for the City's compliance with those requirements. Our responsibility is to express an opinion on the City's compliance based on our exa mi nation. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the City complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the City complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the City's compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the period October 1, 2018 to September 30, 2019. The purpose of this report is to comply with the local government investment policy requirements of Section 218.415, Florida Statutes, and Rules of the Florida Auditor General. This report is intended solely for the information and use of the Florida Auditor General, the Honorable Mayor, Members of the City Commission, the City Manager, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. Miami, Florida June 24, 2020 THE POWER OF BEING UNDERSTOOD AUDIT TAX CONSULTING 3 $43. ±tu .Anes te,"iß4.git@#t Ai tw..+«G nt@dent a.li! ta«!g ssegrr+, é·4+sr.0r:a.t.tg '· $2 4 0 e 8 ±.. ±