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LTC 217-2019 External Auditor's (Crowe Horwath LLP) Annual Audit Report on the City of Miami Beach (the City) for the period ended September 30, 2018 MIAMI BEACH OFFICE OF THE CITY MANAGER 217-2019 LTC # '9 LETTER TO COMMISSION TO: Mayor Dan Gelber and Members o the City dommission FROM: Jimmy L. Morales, City Manager DATE: April 12, 2019 SUBJECT: External Auditor's (Crowe Ho 'ath LLP) Annual Audit Report on the City of Miami Beach (the City) for the period eided September 30, 2018 The following report is 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, 2018, which includes an unmodified (clean) audit opinion and emphasis of matter relating to the City's implementation of Governmental Accounting Standards Board (GASB) Statement No. 75, "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans" and GASB Statement No. 89, "Accounting for Interest Cost Incurred before the End of a Construction Period". The audit opinion begins on page 10. Enclosed, for your information, are the following documents: A. A letter to the Mayor and Members of the City Commission, discussing the auditor's required communications to the Mayor and City Commission, auditor's responsibility under auditing standards general accepted in the United States of America and under Government Auditing Standards, planned scope and timing of the audit, significant accounting policies and management judgments and accounting estimates, auditor's judgments about qualitative aspects of significant accounting practices, corrected and uncorrected misstatements, and other communications. B. 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. This report contains a Significant Deficiency as noted in the Schedule of Finding and Response on page 3 of the report. C. Other Reports — Independent Accountant's Report on compliance with section 218.415, Florida Statutes and Management Letter. The enclosed reports will be available at the above web address as the single audit and other audits are completed (before June 30, 2019). The reports noted above will be presented and discussed by the external auditors at an upcoming Audit Committee meeting. If you have any questions or need additional information, please feel free to contact Allison R. Williams at 305-673-7466. JLM/ aw Crowe Crowe LLP Independent Member Crowe Global To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida Professional standards require that we communicate certain matters to keep you adequately informed about matters related to the financial statement audit that are, in our professional judgment, significant and relevant to your responsibilities in overseeing the financial reporting process. We communicate such matters in this report. AUDITOR'S RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA Our responsibility is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. The audit of the financial statements does not relieve you of your responsibilities and does not relieve management of their responsibilities. Refer to our engagement letter with the City for further information on the responsibilities of management and of Crowe LLP. AUDITOR'S RESPONSIBILITY UNDER GOVERNMENT AUDITING STANDARDS As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of the City's 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 or disclosures. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PLANNED SCOPE AND TIMING OF THE AUDIT We are to communicate an overview of the planned scope and timing of the audit.Accordingly,the following matters regarding the planned scope and timing of the audit were discussed with you on November 20, 2018. • How we proposed to address the significant risks of material misstatement, whether due to fraud or error. • Our approach to internal control relevant to the audit. • The concept of materiality in planning and executing the audit, focusing on the factors considered rather than on specific thresholds or amounts. 1 • Where the entity has an internal audit function,the extent to which the auditor will use the work of internal audit, and how the external and internal auditors can best work together. • Your views and knowledge of matters you consider warrant our attention during the audit, as well as your views on: o The allocation of responsibilities between you and management. o The entity's objectives and strategies, and the related business risks that may result in material misstatements. o Significant communications with regulators. o Other matters you believe are relevant to the audit of the financial statements. Matters relative to the use of other auditors/other accountants during the audit: o An overview of the type of work to be performed by other auditors/other accountants. o The basis for the decision to make reference to the audit of the other auditor in our report on the entity's financial statements. o An overview of the nature of our planned involvement in the work to be performed by the other auditor/other accountant. SIGNIFICANT ACCOUNTING POLICIES AND MANAGEMENT JUDGMENTS AND ACCOUNTING ESTIMATES Significant Accounting Policies: Those Charged with Governance should be informed of the initial selection of and changes in significant accounting policies or their application.Also,Those Charged with Governance should be aware of methods used to account for significant unusual transactions and the effect of significant accounting policies in controversial or emerging areas where there is a lack of authoritative consensus.We believe management has the primary responsibility to inform Those Charged with Governance about such matters. To assist Those Charged with Governance in its oversight role, we also provide the following. Accounting Standard Impact of Adoption GASB Statement No. 86, "Certain Debt Adoption of this Statement did not have a Extinguishment Issues." material impact on the City's financial position or This Statement was issued to improve results of operations. consistency in accounting for financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources (resources other than the proceeds of refunding debt) are placed in an irrevocable trust for the sole purpose of extinguishing debt. The Statement also improves accounting and financial reporting for prepaid insurance of debt that is extinguished and notes to financial statements for debt that is defeased in substance. GASB Statement No. 85, "Omnibus 2017." Adoption of this Statement did not have a This Statement was issued to address practice material impact on the City's financial position or issues that have been identified during results of operations. implementation and application of certain GASB Statements. 2 Accounting Standard Impact of Adoption GASB Statement No. 75, "Accounting and Upon adoption of this Statement, the City Financial Reporting for Postemployment reduced beginning net assets by approximately Benefits other than Pensions." $61 million in the Governmental Activities and The primary objective of this Statement is to approximately$26 million in the Business Type improve accounting and financial reporting by Activities. state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. GASB issued Statement No. 89,Accounting for As a result, interest costs incurred before the end Interest Cost Incurred before the End of a of a construction period are not included in the Construction Period. This statement requires that historical cost of a capital asset reported in a interest costs incurred before the end of a business-type activity or enterprise fund. construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. Significant Unusual Transactions. No such matters noted Significant Accounting Policies in No such matters noted Controversial or Emerging Areas. Management Judgments and Accounting Estimates: Further, accounting estimates are an integral part of the financial statements prepared by management and are based upon management's current judgments. These judgments are based upon knowledge and experience about past and current events and assumptions about future events. Certain estimates are particularly sensitive because of their significance and because of the possibility that future events affecting them may differ markedly from management's current judgments and may be subject to significant change in the near term. The following describes the significant accounting estimates reflected in the City's year end financial statements, the process used by management in formulating these particularly sensitive accounting estimates and the primary basis for our conclusions regarding the reasonableness of those estimates. Significant Accounting Process Used by Management Basis for Our Conclusions Estimate Allowance for Doubtful The allowance for doubtful accounts We tested this accounting Accounts and Bad Debt was determined by management by estimate by reviewing, on a test Expense a process involving consideration of basis, the information listed and past experiences, current aging by testing information in certain information, information from credit files. reports, contacts with the customers, and other available data including environmental factors such as industry, geographical, economic and political factors. Fair Values of Investment The disclosure of fair values of We tested the propriety of Securities and Other securities and other financial information underlying Financial Instruments instruments requires management management's estimates. to use certain assumptions and estimates pertaining to the fair values of its financial assets and financial liabilities. 3 Significant Accounting Process Used by Management Basis for Our Conclusions Estimate Useful Lives of Fixed Management has determined the We tested the propriety of Assets economic useful lives of fixed information underlying assets based on past history of management's estimates. similar types of assets, future plans as to their use, and other factors that impact their economic value to the City. Loss Contingencies The City consults with legal counsel Based on information obtained to evaluate outstanding litigation, from the City's legal counsel claims and assessments. Factors regarding this matter and that affect management's discussions with management, evaluation of litigation contingencies we concur with management's requiring disclosure include the determination that the loss nature of the contingencies and contingency does not meet whether the outcome could have an conditions for accrual of being effect on the consolidated financial both probable and estimable, statements. and, thus, no accrual is recorded and no specific disclosures are required. Pension and Amounts reported for pension and We reviewed the Postretirement Obligations postretirement obligations require reasonableness of these management to use estimates that estimates and assumptions. may be subject to significant change in the near term. These estimates are based on projection of the weighted average discount rate, rate of increase in future compensation levels, and weighted average expected long-term rate of return on pension assets. Self-insurance Liabilities The actuarial estimates are We reviewed the developed based upon information reasonableness of these supplied to the actuaries by estimates and assumptions. management about past events as well as expectations about future events. Landfill Postclosure Care The estimates are developed based We reviewed the Costs upon information supplied to the reasonableness of these engineer's by management about estimates and assumptions. past events as well as expectations about future events. Compensated Absences Management has determined the We tested these estimates by Liabilities estimated amounts for reviewing management's compensated absences based on schedule and testing certain future payments that are reasonably other information underlying estimable. management's analysis. 4 AUDITOR'S JUDGMENTS ABOUT QUALITATIVE ASPECTS OF SIGNIFICANT ACCOUNTING PRACTICES We are to discuss with you our comments about the following matters related to the City's accounting policies and financial statement disclosures. Accordingly, these matters will be discussed during our meeting with you. • The accounting policies to the particular circumstances of the City,considering the need to balance the cost of providing information with the likely benefit to users of the City's financial statements are appropriate. • Overall, the disclosures in the financial statements are neutral, consistent, and clear. • The effect of the timing of transactions in relation to the period in which they are recorded is appropriate. • There were no significant risks and exposures, and uncertainties that are disclosed in the financial statements. • There were no unusual transactions including nonrecurring amounts recognized during the audit period that materially impacted the financial statements. • There were no particularly sensitive financial statement disclosures. • There were no factors affecting asset and liability carrying values, including the City's basis for determining useful lives assigned to tangible and intangible assets. • There were no selective correction of misstatements, for example, correcting misstatements with the effect of increasing reported earnings, but not those that have the effect of decreasing reported earnings. CORRECTED AND UNCORRECTED MISSTATEMENTS Corrected Misstatements: We are to inform you of material corrected misstatements that were brought to the attention of management as a result of our audit procedures. There were no such misstatements. Uncorrected Misstatements: We are to inform you of uncorrected misstatements that were aggregated by us during the current engagement and pertaining to the latest and prior period(s) presented that were determined by management to be immaterial, both individually and in the aggregate, to the financial statements taken as a whole. For your consideration,we have distinguished misstatements between known misstatements and likely misstatements. There were no such misstatements OTHER COMMUNICATIONS Communication Item Results Other Information In Documents Containing We read the following items and noted no Audited Financial Statements material inconsistencies or misstatement of facts Information may be prepared by management in such information based on our reading thereof. that accompanies the financial statements. To assist your consideration of this information, you • Introductory section should know that we are required by audit • Management's Discussion and Analysis standards to read such information and consider whether such information, or the manner of its Statistical section presentation, is materially inconsistent with information in the financial statements. If we consider the information materially inconsistent based on this reading, we are to seek a resolution of the matter. 5 Communication Item Results Significant Difficulties Encountered During There were no significant difficulties encountered the Audit in dealing with management related to the We are to inform you of any significant difficulties performance of the audit. encountered in dealing with management related to the performance of the audit. Disagreements With Management During our audit, there were no such We are to discuss with you any disagreements disagreements with management. with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the City's financial statements or the auditor's report. Consultations With Other Accountants We are not aware of any instances where If management consulted with other accountants management consulted with other accountants about auditing and accounting matters,we are to about auditing or accounting matters since no inform you of such consultation, if we are aware other accountants contacted us, which they are of it, and provide our views on the significant required to do by Statement on Auditing matters that were the subject of such Standards No. 50, before they provide written or consultation. oral advice. Representations The Auditor Is Requesting We direct your attention to a copy of the letter of From Management management's representation to us provided We are to provide you with a copy of separately. management's requested written representations to us. Significant Issues Discussed, or Subject to There were no such significant issues discussed, Correspondence, With Management or subject to correspondence, with management. We are to communicate to you any significant issues that were discussed or were the subject of correspondence with management. Significant Related Party Findings and Issues There were no such findings or issues that are, We are to communicate to you significant in our judgment, significant and relevant to you findings and issues arising during the audit in regarding your oversight of the financial reporting connection with the City's related parties. process. Other Findings or Issues We Find Relevant or There were no such other findings or issues that Significant are, in our judgment, significant and relevant to We are to communicate to you other findings or you regarding your oversight of the financial issues, if any, arising from the audit that are, in reporting process. our professional judgment, significant and relevant to you regarding your oversight of the financial reporting process. We are pleased to serve the City as its independent auditors and look forward to our continued relationship. We provide the above information to assist you in performing your oversight responsibilities, and would be pleased to discuss this letter or any matters further, should you desire. This letter is intended solely for the information and use of Honorable Mayor, City Commission, Audit Committee and, if appropriate, management, and is not intended to be and should not be used by anyone other than these specified parties. 64,,,),e 66? Crowe LLP Miami, Florida March 29, 2019 6 • Crowe Crowe LLP Independent Member Crowe Global 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 The Honorable Mayor and City Commissioners City of Miami Beach, Florida We have audited, 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 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, 2018, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated March 29, 2019. Our report includes a reference to other auditors who audited the financial statements of the City of Miami Beach Florida Employees' Retirement Plan, as described in our report on the City's financial statements. This report does not include the results of the other auditor's testing of internal control over financial reporting and compliance and other matters that are reported on separately by those other auditors. Our report also includes a reference to other auditors who audited the financial statements of the City Pension Fund for Firefighters and Police Officers, as described in our report on the City's financial statements. The financial statements of the City Pension Fund for Firefighters and Police Officers were not audited in accordance with Government Auditing Standards. 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. 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 City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiency in internal control, described in the accompanying schedule of findings and responses as item 2018-001 that we consider to be a significant deficiency. 1 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of 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 no 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 responses. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City'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 City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. e.AoscJ'e LG� Crowe LLP Miami, Florida March 29, 2019 2 r CITY OF MIAMI BEACH SCHEDULE OF FINDING AND RESPONSE Finding 2018-001 Classification: Significant Deficiency Criteria or specific requirement: The City should complete a review of all fee changes that are completed in the EnerGov system to ensure accuracy of the fees as approved by ordinance. Condition: The City did not have a formal procedure to review changes to fees completed in the EnerGov system completed by the senior system analyst in the Building department. Effect: Inaccurate fee changes may result in an improper fee being charged to customers. Cause: There is no formal written policy to document the review of fee changes completed in EnerGov. Recommendation: We recommend that a formal written policy be developed which includes a documented independent review of all changes to fees that have been adopted though City ordinance and that there be a quarterly review of EnerGov activity logs for all fee changes. Views of responsible officials and planned corrective action: At the time of this audit, the Building Department had an informal procedure regarding the changing of fees based on approved City ordinances. The Building Department felt that the procedures in place included sufficient internal checks and balances. The procedures were subsequently formalized into a policy, but the auditors indicated that the policy was not sufficiently adequate for the process. The City Policy is presently being amended to add an automatic auditing component to any EnerGov programing fee changes. The new policy will provide notification to the IT Department and the Building Department of any changes in the fees made within the EnerGov programing for verification of compliance with City Ordinance. The policy is currently in the review process and should be fully implemented within 60 days. Subsequent to the audit the City reviewed the fees implemented by the Building Department and found no conflicts with city ordinances. The Building Department has ceased to adjust fees in the EnerGov program; all fee changes are being addressed by the City's IT department while waiting for the amended policy to be implemented. 3 CITY OF MIAMI BEACH, FLORIDA REPORTS IN ACCORDANCE WITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL September 30, 2018 CITY OF MIAMI BEACH, FLORIDA REPORTS IN ACCORDANCE WITH CHAPTER 10.550, RULES OF THE AUDITOR GENERAL September 30, 2018 TABLE OF CONTENTS INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES 1 MANAGEMENT LETTER 2 Crowe Crowe LLP Independent Member Crowe Global INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE WITH SECTION 218.415,FLORIDA STATUTES To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida We have examined the City of Miami Beach, Florida (the "City") compliance with Section 218.415, Florida Statutes, concerning the investment of public funds during the year ended September 30, 2018. 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 with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States. 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 requirements contained in Section 218.415, Florida Statutes for the year ended September 30, 2018. The purpose of this report is solely to comply with Chapter 10.550, Rules of the Florida Auditor General. Accordingly, this report is not suitable for any other purpose. e. "7, Crowe LLP Miami, Florida March 29, 2019 -1- Crowe Crowe LLP Independent Member Crowe Global To the Honorable Mayor and Members of the City Commission City of Miami Beach, Florida Report on the Financial Statements We have audited the financial statements of the City of Miami Beach, Florida (the"City"), as of and for the year ended September 30, 2018, and have issued our report thereon dated March 29, 2019. Our report includes a reference to other auditors who audited the financial statements of (1) City of Miami Beach Florida Employees' Retirement Plan and (2) City Pension Fund for Firefighters and Police Officers, as described in our report on the City's financial statements. This report does not include our consideration of the other auditors'management letters that are reported on separately by those other auditors.The financial statements of the City Pension Fund for Firefighters and Police Officers were not audited in accordance with Government Auditing Standards. Auditor's Responsibility We conducted our audit 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;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. Other Reports 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 Financial Assistance Project and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs; and Independent Accountant's Report on Compliance with Section 218.415, Florida Statutes. Disclosures in those reports, which are dated March 29, 2019 should be considered in conjunction with this management letter. Prior Audit 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 annual 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. Such information is disclosed in Note 1.A. to the financial statements. (Continued) -2- Financial Condition Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report 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.c. 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. Annual Financial Report Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the City for the year ended September 30,2018, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2018. In connection with our audit, we determined that these two reports were in agreement. Special District Component Units Section 10.554(1)(i)5.d, Rules of the Auditor General, requires that we determine whether or not a special district that is a component unit of a county, municipality, or special district, provided 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 determined that all special district component units provided the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida Statutes. Other Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit,we did not have any such recommendations. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address 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 City Commission,and applicable management,and is not intended to be and should not be used by anyone other than these specified parties. 64.04 LGA Crowe LLP Miami, Florida March 29, 2019 -3-