LAKEWOOD RANCH STEWARDSHIP DISTRICT

AUDITED FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED

SEPTEMBER 30, 207 6

SHINN & CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

FOR THE FISCAL YEAR ENDED

September 30, 2016

TABLE OF CONTENTS			
	PAGE	
INDEPENDENT AUDITOR'SREPORT	1 -	2	
MANAGEMENT'SDISCUSSION AND ANALYSIS	3-6	
BASIC FINANCIAL STATEMENTS			
Government-Wide Financial Statements:			
Statement of Net Position	7		
Statement of Activities	8		
Fund Financial Statements:			
Balance Sheet -  Governmental Funds	9		
Statement of Revenues, Expenditures, and Changes in Fund Balances -			
Governmental Funds	10		
Reconciliation of the Statement of Revenues, Expenditures, and			
Changes in Fund Balances -  Governmental Funds			
to the Statement of Activities	1 7		
Statement of Revenues, Expenditures, and Changes in Fund Balances -			
Budget and Actual - General Fund	12		
Notes to the Financial Statements	13 -	21	
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	22- 23	
INDEPENDENT ACCOUNTANT'SREPORT	24		
MANAGEMENT LETTER	25 - 26	

SHINN& CO

SHINN Fe?Co

CPAS AND BUSINESS CONSULTANTS l 001 3rd Ave11ue West Suite 500 I Bradenton, FL 24205 50 Ceritral Avenue Su,te 910 I Sarasota. Fl 34236

(T) 941 747,0500 I (F) 9 4 I 745 0202 www.sh1nnandco,com

INDEPENDENT AUDITOR'S REPORT

Board of Supervisors

Lakewood Ranch Stewardship District

Report on the Financial Statements

We have audited t he accompanying financial statements of the governmental activities, and each major fund of Lakewood Ranch Stewardship District ("District"), as of and for the year then ended September 30, 207 6, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation. and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditmg Standards, issued by the ·Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financia l statements, The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the finandal statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant t o the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Shinn & Company. LLC 1s a member of Prov.ate Comparnes Practice Secuon I American Institute of Certified Public Accountants I Flonda Institute oi Certified Public Accountants

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financia l position of the governmental activities, and each major fund of Lakewood Ranch Stewardship District, as of September 30, 2016, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3 through 6 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for pladng the basic financial statements in an appropriate operational. economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United Stat es of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financia l statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated February 17, 2017, on our consideration of the District'sinternal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance.

SHINN AND COMPANY, LLC

CERTIFIED PUBLIC ACCOUNTANTS

Bradenton, Florida

February 17, 2017

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MANAGEMENT'SDISCUSSION AND ANALYSIS

The following is a narrative overview and analysis of the financial activities of the Lakewood Ranch Stewardship District ("District") for the fiscal year ended September 30, 2016.

Financial Highlights and Analysis of Financial Statements

•	As of September 30, 2016 and 207 5, the total assets of the District were S227.782,927. and $152,952,668, respectively, an increase of S74,830,259. The primary factors for the change was the approximate S79.5 million in net proceeds from one new bond issues less approximately $6.89 million in depreciation charges.

•	As of September 30, 2016 and 2015, the total liabilities of the District were S228,678,987 and $153,646,331, respectively, an increase of S75,032,656. The primary factor for the change was the approximate $79.5 million of debt from the new bond issue less approximately S3.8 million in bond principal payments.

•	The District's assets exceeded liabilities by S693,663 as of September 30, 2015 while liabilities exceeded assets by S896,060 as of September 30, 2016. The District's fund balance totaled $95,732,772 and $43,274,789 as of September 30, 2075 and 2076, respectively. The primary factor for both of these variances was the changes in assets and liabilities as discussed above.

Overview of the Financial Statements

This discussion and analysis are intended to serve as an introduction to the District'sbasic financial statements. The District'sbasic financial statements comprise three components: 1) government-wide financia l statements, 2) fund flnancial statements, and 3) notes to the financial statements.

Government-wide financial statements - The government-wide financial statements are designed to provide readers with a broad overview of the District's inances,f in a manner similar to a private-sector business.

The statement of net position presents information on all of the District's assets and liabilities, with the difference between the two reported as net position. Over time. increases or decreases in net position may serve as a useful indicator of whether the financial positfon of the Dfstrict is improving or deter1orating.

The statement of activities presents information showing how the District'snet position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some itens that will only result in cash flows in future fiscal periods.

The District'sgovernmental activities include general government. physical environment, and interest on long-term debt

The government-wide financial statements can be found on pages 7 and 8 of this report.

Fund financial statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund

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accounting to ensure and demonstrate compliance with finance-related legal requirements, All of the District's funds are governmental funds.

Governmental funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide fina11cial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year, Such information may be useful in evaluating a government'snear-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements. it is useful to compare the information presented for governmental funds with similar [nformation presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District'snear-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three individua governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the debt service fund and the capital projects fund. all of which are considered to be major funds.

The basic governmental fund financial statements can be found on pages 9 to 12 of this report

Notes to the financial statements - The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 13 through 27 of this report.

Government-Wide Financial Analysis

Statement of Net Positron		2016	s	2015		
Current and other assets	$	97,949,872		44,450,004		
Capital assets		129,833,055		7 08,502,664		
Total assets	s	227,782,927	$	152,952,668		
Curent liabilities	$	6,099,700	$	3,647,815		
Long-term liabilities	s	222,579,287	s	149,998,516		
Total liabilities		228,678,987		153,646,331		
Net investment in capital assets	s	(96,631 ,232)	$	(43,970,852)		
Restricted		97,749,140		44,182,060		
Unrestricted		(2,013,968)		(904,871 )		
Total net position	$	(896,060)	=s_	_._6(93_,6_63)		

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Current and other assets increased by S53.4 million primarily due to investments held as a result of bond proceeds less any capital'outlay for the Villages of Lakewood Ranch South infrastructure projects.

The primary changes in the capital assets increase of approximately $21.8 million were the completion of the Country Club East infrastructure improvements. and the infrastructure improvements on the Lakewood Centre North and Villages of Lakewood Ranch South projects of approximately $28.2 million less approximately S6.9 million of depreciation expense.

Total liabilities increased by approximately $75.0 million, due primarily to new bond issue for the Villages of Lakewood Rancl1 South ($79.5 million) less scheduled debt service payments made in the prior year ($3.8 million).

The net investment in capital assets of $(96,631,232) does not take into account the $97,749,140 of existing funds restricted for both capital improvements and debt service.

Statement of Activities		2016		
Program revenues				
Charges for services	$	7,7 01,813		
Operating grants and contributions		10,594,459		
General revenues				
Investment income		129,416		
Non advalorem assessments		1,331,605		
Total revenues		19,157,293		
Expenses				
General government		346,899		
Physical environment		8,342,726		
Interest on long-term debt		10,670,065		
Total expenses		19,359,690		
Changes in net position		(202,397)		
Net position - beginning	s	(693,663)		
Net position - ending		{896,060)		

s

s

2015

4,875,548

9,220,075

13,342

1,1 67,961

15,216,926

323,157

7,893,1 12

8,279,288

1 6,495,557

(1,278,637)

584,968

{693,663)

Charges for services consist of lot sale proceeds and operating grants and contributions consists of Developer cash funding contributions. As the Statement of Activitres is on an accrual basis, the expenses include $2,214,694 of accounts payable with payments made in October 207 6 from additional Program revenues received.

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Capital Assets

During the. year ended September 30, 2016, the District had a gross infrastructure increase of approximately $28.2 million. Primary capital projects continuing were the Lakewood Centre North and Villages of Lakewood Ranch South prcjects. Additional information on the District'scapital assets can be found in Note 4 of this report.

Debt Administration

During the year ended September 30, 2016, the District issued one new bond, Villages of Lakewood Ranch South (S79 .5 million) and approximately $3.8 million was made in repayments of amounts due on the various issues of the District.

Additional information on the District'slong-term debt can be found in Note 5 of this report.

Budgetary Highlights

The District set its annual budget for the District expecting to be operational for the entire year. Assessments came in approximately $284,000 higher than anticipated, and landowner funding did not meet expectations by approximately $245,000. The variance of the budgeted expenditures compared with actual results was $90,000 higher than anticipated, within the various areas within District operations. There were no budget amendments during the year.

Economic Factors and Year 2017 Budget

The District is anticipating ·increased interest in the various developments and projects currently underway. Next year'sbudget main components will be maintenance of t he project areas, administrat1on of the District, and continued infrastructure acquisition and improvements on capital projects begun in 207 5 and

207 6.

Requests for Information

This financial report is designed to prov de a general overview of the District'sfinances for all those with an interest in them. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Lakewood Ranch Stewardship District, Attn; Supervisor, 14400 Covenant Way, Bradenton, Florid3 34202.

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BASIC FINANCIAL STATEMENTS

SHINN& CO

CPAS ANO BUS Nl:SS C.Or-.SULTANI~

LAKEWOJD RANCH STEWARDSHIP DISTRICT

STATEMENT OF NET POSITION

September 30, 2016

ASSETS

Current Assets:

Cash and cash equivalents

Investments - restricted

Total current assets

Other Assets:

Deposits

Accrued interest receivable

Other receivables

Due from Land Owner

Total other assets

Capital Assets:

Depreciable assets:

District infrastructure

Less accurnulated depreciation

Net depreciable assets

Non-deprec,able assets:

Construction in progress

Tota l assets

LIABILIT1ES

Current Liabilities;

Accounts payable

Bonds payable, current portion

Total current liabilities

Non-current Liabilities:

Bonds payable, long-term portion

Total liabilities

NET POSITION

Net investment in capital assets

Restricted for debt service

Restricted for capital projects

Unrestricted

Total net position

See notes to the financial statements.

Governmental
Act1vItIes

s 62,279 97,749,140 97,811,419

3,000

936

101 ,160

33,357

138,453

140,831,217

(43,471,465)

97,359,752

32,473,303

227,782,927

2,214,700

3,885,000

6,099,700

222,579,287

228,678,987

(96,637,232)

20,877,379

76,877,767

(2,013,968) s (896,060)

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

STATEMENT OF ACTIVITIES

For The Fiscal Year Ended September 30, 2016

					Program Revenues			
				Charges	Operating	Capital			
				for	Grants and	Grants and			
Functions / Programs		Experses		Services	Contributions	Contributions			
Primary government:									
Governmental activities:					s 10,594,459	s	s		
General government	$	246,899	$	7,101,813					
Physical environment		8,242,726							
Interest on long-term debt		10,670,065							
Total governmental activities	s	19,359,690	$	7,1 01,813	s 10,594,459	s			
	General revenues:							
	Non advalorem assessments					
	Investme1t income						
		Total general revenues					
	Change in net position					
	Net posit.ion - beginning			s		
	Net position - ending						

Net (Expense)

Revenue ar\d Changes ,n

Net Position

Governmental

Activities

17,349,373

(8,342,726)

(10,670,065)

(1,663.418)

1,331 ,605

129,416

1,461,021

(202,397)

(693,663)

(896,060)

See notes to the financial statements.

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Cf1A.S AtlC BUS::N£S.o:; r.OkSu..TA~TS

LAKEWOOD RANCH STEWARDSHIP DISTRICT BALANCE SHEET - GOVERNMENTAL FUNDS September 30, 2016

ASSETS

Cash and cash equivalents

Investments

Accrued interest receivable

Other receivables

Due from Land Owner

Total assets

LIABILITIES

Accounts payable

Total liabilities

FUND BALANCES

Unassigned reported in General fund Restricted reported in Debt service fund Restricted reported Capital projects fund

Total fund balances

Total liabilities and fund balances

s

s

s

s

		Majo1'Funds				Total		
		Debt		Capital	Governmental		
General		Service		Projects		Funds		
62,279	s		$		$	62.279		
		20,877.379		76,871,761		97,749,140		
		936				936		
2,751		98.409				101,160		
33,357	-----	s		- ~.357		
98,387	s	20,976.724		76,871,761	s	97,946,872		
80,680			s	2,134,020	s	2,214.700		
80,680				2,134,020		2,214,700		

17,707					17,707	
	20,976,724				20,976,724	
			74,737,741		74,737,741	
17.707	20,976,724		74.737.741		95,732.172	
98,387  s	20,976,724	s	76,871,761	s	97,946,872	

Amounts reported for governmental activities in the statement of net position are different because:

Fund balance - governmental funds

Capital assets used rn governmental ac:ivit1es are not financial resources and therefore, are not reported in the funds

Other long-term assets used In governmental activities are not financial resources and therefore, are not reported in the funds

Certain liabilities are not due and payable in the current period and therefore are not reported in the funds.

Bonds payable. net

s

s

95,732,172

129,833,055

3,000

(226,464,287)

'896,060)

See notes to the financial statements.

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

STATEMEN T OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCES -

GOVERNMENTAL FUNDS

For the Fiscal Year Ended September 30, 2016

REVENUES

Land owner funding contributions Assessments

Investment income

Allocated proceeds from Landowner lot sales Miscellaneous income

Total revenues

EXPENDITURES

Current:

General governmem

Physical environment:

Operations

Debt service:

Bond principal

Bond interest

Cost of issuance

Capital outlay

Total expenditures

OTHER FINANCING SOURCES (USES) Transfers 1n

Transfers out

Debt and loan proceeds (net)

Total other financing sources (uses)

Net change in fund balances

Fund balances - beginning

Fund balances - ending

s

s

		MaJor Funds			Total	
		Debt		Capital	Governmental	
General		Service		Projects	Funds	
465,761	$	4,252,312	$	5,876,386	$   10,594,459	
1,331,605					1,331 ,605	
		20,040		109,376	729.416	
		2,421 ,262			2,421,262	
		4,680.55]			4,680,551	
1,797,366		71,374.165		5,985,762	19,157,293	
346,899					346,899	
1,450,467					1.450.467	
		3,840,000			3,840,000	
		10,293,492			10,293,492	
				237,875	237,875	
				28,222,650	28,222,650	
1,797,366		14,1 33,492		28,460,525	44,391 ,383	
		10,574,704			10,574,704	
		(636,651)		(9,938,053)	(10,574,704}	
				77,692.073	77,692,073	
		9,938,053		67,754,020	77.692,073	
		7,178,726		45,279,257	52.457,983	
17,707		13,797,998		29,458,484	43,274,189	

17,707	s  20,976.724  s  74,737.741   s  95.732,172

See notes to the financial statements.

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND

BALANCES - GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

For the Fiscal Year Ended September 30, 2016

Amounts reported for governmental activiiies in the statement of aciivities are different because:			
Net change in fund balances - total governmental funds	$	52,457,983	
Governmental funds report capital outlays as expenditures, however, in the			
statement of activities, the cost of those assets is eliminated and capitalized			
as capital assets ($28,222,650). The total reflects depreciation expense			
for the current period ($6,892.259)		21,330,391	
The issuance of long-term debt is reported as an other financing source,			
however, in the statement of net position these are treated as liabilities		(77,692,073}	
The repayment ot the pnnc1pal ot long-term debt consumes the			
current financial resources of governmental funds		3,840,000	
Amortization on discount of bonds		(138,698)	
Change in net position of governmental activities	$	(202,397)	

See notes to the financial statements.

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

STATEM::NT OF REVENUES. EXPENDITURES,

AND CHANGES IN FUND BALANCES -

BUDGET AND ACTUAL - GENERAL FUND

	For the Fiscal Year Ended September 30, 2016				
	Original and		Variance		
	Final		Positive		
	Budget	Actual	(Negative)		
REVENUES	s  770.739  s		s  (244,978)		
Landowner funding		465,767			
Assessments	1,047,755	1,331,605	283,850		
Total revenues	7,758,494	7.797.366	38,872		
EXPENDITURES					
Current					
General government	398,925	346,899	52.026		
Physical environment					
Operations	7,359,569	1,450,467	(90,898)		
Total expenditures	1,758,494	1,797,366	(38,872)		

EXCESS OF EXPENDITURES OVER REVENUES

FUND BALANCES - BEGINNING OF YEAR

FUND BALANCES - END OF YEAR

17.707	17,707

s	s   17,707  s    17.707

See notes to the financla l statements.

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS

For the Fiscal Year Ended September 30, 2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting principles and policies used in the preparation of these basic financial statements.

REPORTING ENTITY

Lakewood Ranch Stewardship District is a local unit special purpose government created on June 17, 2005 under the "Lakewood Ranch Stewardship District Act,''otherwise known as Chapter 2005-338, Florida Statutes. The District was establLshed for the purpose of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District.

The District is governed by the Board of Supervisors ("Board") which is composed of five members. The S\Jpervisors are elected on an at large b3sis by the owners of the property within the District. Ownership of land within the District entitles the owner to one vote per acre. The Board of Supervisors of the District exercises all powers granted to the District pursuant to Chapter 2005-338, amended by Chapter 2009-263, Florida Statutes. The District encompasses 23,255 acres of land located in Manatee County and Sarasota County, Florida,

The Board has the final responsibility for contracting for the services of consultants; borrowing money; adopting and enforcing rules and orders pursuant to the provisions of Chapter 120; holding, controlling and acquir1ng by donation, purchase or condemnation or dispose of any public easements; lease as lessor or assess to or from any person, firm, corporation, association or body; borrow money and issue bonds, certificates, warrants, notes, or other evidence of indebtedness; raise, by user charges or fees authorized by resolution of the board, amounts of money necessary for the conduct of District activities: assess and impose ad valorem taxes; determine, order, levy, impose, collect, and enforce maintenance taxes,

The financial statements were prepared in accordance wrth Governmental Accounting Standards Board ("GASB") Statement 34, and Statement 39, an amendment of GASB Statement 34. Under the provisions of those standards. the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which tl1e District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplet e or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District

Government-Wide and Fund Financial Statements

The basic financial statements include both government-wide and fund financial statements.

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report fnformation on all the non-fiduciary activities of the primary government

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LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE l -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Government-Wide and Fund Financial Statements - continued

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 7) charges to customers who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not properly included among program revenues are reported instead as general revenues.

Measurement Focus, Basis of Accounting and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eli9ibility requirements imposed by the provider have been met.

Government fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period . For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

The government reports the following major governmental funds:

General Fund

The General Fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund.

Debt Serv1ce Fund

The Debt Service fund is used to account for the accumulation of resources for the annual payment of principal and interest on long-term general obligatfon debt

Capital Projects Fund

The Capital Projects fund is used to account for the cost of construction of the infrastructure of the District

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.

When both restricted and unrestricted resources are available for use, it is the government'spolicy to use restricted resources first. then unrestricted resources, as they are needed.

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SHINN& CO

t:flAS "NDSU51N~Cl~:W-..TANTS

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE l  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Measurement Focus. Basis of Accounting and Financial Statement Presentation - continued

Assets. Liabilities and Net Assets or Equity

Deposits and Investments

The government"s cash and cash equivalents are considered to be cash on hand and demand deposits

Investments, which consist of cash management accounts investing in short term government obligations, are stated at cost which ap'.)roximatesfair value.

Capital Assets

Major outlays for capital assets and improvements are capitalized as projects are constructed. District infrastructure is being depreciated over twenty years.

Long-Term Obligations

In the government-wide financial statements long-term debt and other long.-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts, as well as insurance costs, are deferred and amortized over the life of the bonds using the effective interest method, Bonds payable are reported net of premiums or discounts.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Balances

Governmental funds report fund balances are classified either as nonspendable, or as spendable Spendable fund balances are further classified based on the extent to which there are external and internal constraints on the spending of these fund balances. These classifications are described as follows:

Nonspendab!e Fund Balance - Amounts that cannot be spent because they are not in spendable form or legally or contractually required to be m3i11tained intact.

Restricted Fund Balance - Amounts that are constrained for specific purposes which are externally imposed by creditors, granters, contributors, or laws or regulations or imposed by laws through constitutional provisions or enabling legislation.

Committed Fund Balance - Amounts that are constrained for specific purposes imposed by formal action of the highest level of decision making autnority.

75

SHINN& CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Assigned Fund Balance - Includes spendable fund balances intended to be used for specific purposes, but which are neither restricted nor committed.

Unassigned Fund Balance - Represents the residual fund balance within the General Fund, which has not been assigned to other funds and has not been restricted, committed, or assigned.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements. and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates.

Budgetary Information

The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted aocountlrig principles for all governmental funds except the capital projects fund, which adopts a project-length budget.

The District follows these procedures in establishing the budgetary data reflected in the financial statements.

a)	Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.

b)	Public hearings are conducted to obtain taxpayer comments.

c)	Prior to October 1, the budget is legally adopted by the District Board.

d)	All budget changes must be approved by the District Board.

e)	Unused appropriations for annLally budgeted funds lapse at the end of the year.

NOTE 2 -  CASH AND INVESTMENTS

Cash

The District's cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Flodda Statutes Chapter 280, "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository'sfinancial history and its compliance with Chapter 280. In the event of a fa ilure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.

16

SHINN& CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS -  CON TINUED

For the Fiscal Year Ended September 30, 2016

NOTE 2 -  CASH AND INVESTMENTS -  CONTINUED

The District has not formally adopted a written investment policy. According to Florida Statutes 218.415(17) the District is authorized to invest in the following:

(a)	The Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool authorized pursuant to the Florida lnterlocal Cooperation Act, as provided in §163.01 .
(b)	Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency.

(c)	Interest-bearing time deposits or savings accounts in qualified public depositories, as defined in §280.02.

(d)	Direct obligations of the U.S. Treasury.

The securities listed 1n (c) and (d) above must be invested such as to provide sufficient liquidity to pay obligat ions as they come due.

As of September 30, 2016, the District had the following investments:

Investment	Maturities		Fair Value	
U.S. agencies	various	$	97.749,140	

Interest Rate Risk: The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure tc fair value losses arising from increasing interest rates.

Credit Risk: The District does not have a formal investment policy that limits its investment choices by ratings issued by nationally recognized statistical rating organizations. As of September 30, 207 6, the District'sinvestments in FNMA Debentures was rated AAA by Moody's Investors Service and AAA by Standard & Poor's.

Concentration of Credit Risk The District places no limit on the amount the District may invest m any one issuer. More than 5% of the District'sinvestments are in the following:

U.S. agencies	700%	

NOTE 3 -  RISK MANAGEMENT

The District is exposed to various risks of 1oss related to torts; theft of, damage co, and destrucuon of assets; errors and omissions; and natural disasters. These risks are covered by commercial insurance from independent third parties. There have been no significant reductions in insurance coverage from the prior year. No settlements have exceeded the District'sinsurance coverage for each of the past three fiscal years.

17

SHINN& CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEM ENTS -  CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE 4 -  CAPITAL ASSETS

Capital asset activity for the fiscal year ended September 30, 2016 was as follows: Beginning

Balance	Increases	Decreases

Governmental activiti~s			s				
District infrastructure	S 728,887,1 03		11.944,114	s		
Total depreciable assets		128,887,103		17,944,11 4			
Construction in Progress							
District Infrastructure	s		s		s		
Public Roads		88,476		5,014,711			
Bridges Tunnels				652,888			
Lighting		26,841		32,898	26,841		
Drainage		789,553		2,783,793	1,040,028		
Irrigation		1.011 ,289		896,296	653,761		
Other Utilities		388,523		1,617,887	415,533		
Landscaping		2,279.510		980,695	2,279,510		
Hardscape		588,888		51,089	588,888		
Sanita1y Sewer		1,994,9 10		1,225,161	7,309,881		
Potable Water		783,244		2,103,084	911,151		
Earthwork, Clearing & Fill		3,865,11'2		4,106,591	3,562,675		
Engineering & Surveying		3,839,269		4,666,173	892,551		
Mitigation/Littoral Plantings		15,310		1,400	15,310		
Permi1 Fees & Bonding		247,986		330,543	247,985		
Lake Dredging				1,328,460			
Other Infrastructure		275,856		2.430,987			
Total District Infrastructure - CIP		16,194,767		28,222,650	11,944,114		
Total	s 145,081,870	s	40,166,764	s  11,944,114		

Accumulated depreciation for the fiscal year ended September 30, 2016 was as follows:

s

s

s

Ending

Balance

140,831,217

140,831,217

5,103,187

652,888

32,898

2,533,378

1,253,824

1,590,871

980,695

51,089

1,970,790

1,975,177

4.409.028

7,612.891

1,400

330,544

1.328,460

2,706,843

32,473,303

173,304,520

	Beginning				Ending		
	Balance	Increases	Decreases		Balance		
GQvernmental 1;1ctiy1ties	$   36,579,206   s						
District infrastructure		6,892,259	$	$	43,471,465		

Depreclation expense was $6,892,259 for the fiscal year ended September 30, 2016, reported under the Physical environment function in the Statement of Activit ies.

18

SHINN& CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE 5 -  LONG TERM DEBT

Unamortized discounts on governmental activities revenue bonds amounted to $3.710,713 and $2,036,484, as of September 30, 2016 and 207 5, respectively.

					Due within	
	10/1/15	Additions	Decreases	9/30/16	1 year	
2005 Lake Club Series B Bonds	s  2,895,000	$	$  245,000	s  2,650,000	s	
2006 Lake Club Series A Bonds	16,085,000		470,000	15,615,000	440,000	
2006 Country Club East Bonds	22,430,000		620,000	21,810,000	575,000	
2006 Lake Club Series B Bonds	9,010,000		755,000	8,255,000		
201 O Central Park Series A Bonds	3,050,000		45,000	3,005,000	35,000	
2011 Lakewood Ctr NW Sector Bonds	34,590,000		705,000	33,885,000	525,000	
201 1 Belle Isle Series A Bonds	1,675,000		25,000	1,650,000	25,000	
2013 Country Club East Series A Bonds	8,375,000		105,000	8,210,000	110,000	
2013 Central Park Series A Bonds	7,1 20,000		100,000	7,020,000	110,000	
2014 Country Club East Senes A Bonds	17,980,000		175,000	71 ,805,000	185,000	
207 5 Lakewood Ctr North Bonds	37,360,000		595,000	36.765,000	620,000	
2016 The Villages Bond		79,505,000		79,505,000	1,260.000	
	S 154,510,000	S 79,505,000	S 3,840,000	S 230,1 75,000	S 3,885,000	

On September 30. 2005, the District issued $5,535,000 of Special Assessment Revenue Bonds, Series 2006, originally due on August 1, 2010, and extended to August 1, 2017, with a fixed interest rate of 4.875%. The Bonds were issued io finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lake Club Project, as well as set up a debt service reserve fund and to pay costs of issuance, On June 1, 2012, $3,655,000 was extended to a due date of November 1, 2020, at sn interest rate of 7.21 %.

On February 13, 2006, the District issued $19,320,000 of Special Assessment Revenue Bonds, Series 2006 (Lake Club Project), due on November 1, 2036, with a fixed interest rate of 5.50%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lake Club Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On June 5, 2006, the District issued $30,145,000 of Bond Anticipation Notes, Series 2006, due on June 7, 2007, with a fixed interest rate of 6.0%. This note was renewed on June 7, 2007 for a period of 2 years at 6. 5% interest This note was again renewed on January 7, 2009, with a maturity date of June 1, 2011, at an interest rate of 7.5%. The bonds were re-financed by the District on May 1, 2011 for $36,255,000, with Sl 4,495,000 having a final maturity date of May l, 2030, at an interest rate of 7.40%, and $27 ,760,000 having a final maturity date of May 7, 2C40, at an interest rate of 8.00%. The original bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lakewood Centre ,ind NW Sector Projects.

19

SHINN& CO

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the Fiscal Year Ended September 30, 2016

NOTE 5 - LONG TERM DEBT - CONTII\UED

On June 79, 2006, the District issued $27,275,000 of Special Assessment Revenue Bonds, Series 2006, due on November 1, 2037, with a fixed interest rate of 5.40%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the D1strict, known as the Country Club East Project. as well as set up a debt service reserve fund and to pay costs of issuance.

On October l, 2006, the District issued 314,435,000 of Special Assessment Revenue Bonds, Series 2006B, due on May l , 2013, with a fixed interest rate of 5.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Lake Club Project, as well as set up a debt service reserve fund and to pay costs of issuance, On June l, 2012, $11,375,000 was extended to a due date of November 1, 2020, at an interest rate of 6.n%.

On July 7, 207 0, the District issued $5,720,000 of Special Assessment Revenue Bonds, Series 201OA, due on May 1, 2040, with a fixed interest rate of 7.40%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for t he benefit of the District. known as the Central Park Project. as well as set up a debt service reserve fund and to pay costs of issuance.

On May 1, 2011, the District issued Sl ,765,000 of Special Assessment Revenue Bonds, Series 207 1, due on May 1, 2040, with a fixed interest rate of 8.00%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Belle Isle Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On August 5, 2013, the District issued $8,500.000 of Special Assessment Revenue Bonds, Series 2013, due on May 1, 2043, with two fixed interest rates of 6.7% and 7%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Country Club East Project, as well as set up a debt service reserve fund and to pay costs of issuance.

On August 5, 2013, the District issued $7,535.000 of Special Assessment Revenue Bonds, Series 2013, due on May 1, 2043, with a fixed interest rate of 6.4%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District, known as the Central Park Pmject, as well as set up a debt service reserve fund and to pay costs of issuance.

On October 14, 207 4, the District issued $12,145,000 of Special Assessment Revenue Bonds, Series 2014, due of May 1, 2044, with a fixed interest rate of 5.52%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the Country Club East Project, as well as set-up of a debt service reserve fund and to pay cost of issuance

20

SHINN& Co

LAKEWOOD RANCH STEWARDSHIP DISTRICT

NOTES TO THE FINANCIAL STATEMENTS -  CONTINUED

For the Fiseal Year Ended September 30, 207 6

NOTE 5 -  LONG TERM DEBT -  CONTINUED

On February 9, 20 75, the District issued $37,360,000 of Special Assessment Revenue Bonds, Series 207 5, due of May 1, 2045, with interest rates ranging from 4.25% to 4.875%. The bonds were issued to finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the Lakewood Centre North Project, as well as set- up of a debt service reserve fund and to pay cost of issuance.

On Februa1y 8, 2016, the District issued $79,505,000 of Special Assessment Revenue Bonds, Series 2016, due of May 1, 2046, with interest rates ranging from 4.00% to 5.725%. The bonds were issued t o finance the acquisition and construction of certain infrastructure improvements for the benefit of the District known as the Villages of Lakewood Ranch South Project, as well as set-up of a debt service reserve fund and to pay cost of issuance.

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SHINN & CO

t,11,..5 ANb b.US'ltdS"!iCONS..VL1 Ar4[S

OTHER NON-FINANCIAL INFORMATION

SHINN& CO

c:i,>AS ;!,HO 8USIHESS CQ!vSULT,t.HTS.

SHINN& CO
CPAS AND BUSINESS CONSULTANTS

1001 3rd Avenue West Suite 500 I Bradenton, FL 34205 50 Central Avenue Suite 910 I Sarasota, FL 34236

(T) 941 747 0500 I (F) 941,746 0202 www .shinnandco.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Supervisors

Lakewood Ranch Stewardship District

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Lakewood Ranch Stewardship District, ("the District"), as of and for the year ended September 30, 207 6, and the related notes to the financial statements, which collectively comprise the District'sbasic financial statements, and have issued our report thereon dated February 17, 2077.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District'sinternal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the District'sinternal control over financial reporting.

A deficiency m 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District'sfinancial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, 1n 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 would not necessarily identify all deficiencies in internal control that might be material weaknesses or significant deficiencies Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

22

Shinn & Company, LLC 1s a member oi Privai e Companies Practice Section I Amencan Institute of Certifled Public Accountants I Flo11da Institute of Cert1f,ed Public Accountants

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District'sfinancial 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 a-nounts. 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.

Purpose of this Report

This purpose of this report is solely to describe the scope of our testfng of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District'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 District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

SHINN AND COMPANY, LLC

CERTIFIED PUBLIC ACCOUNTANTS

Bradenton, Florida

February 77, 2077

23

SHINN& Co

SHINN& CO
CPAS ANO BUSINESS CONSULTANTS

1001 31d Avenue West Suite 500 I Bradenton. FL 34205 50 Central Avenue Suite 910 I Sarasota, FL 34236 rn 941.747,0500 I (F) 941.746.0202 www.shinnandco.com

INDEPENDENT ACCOUNT ANT S REPORT

Board of Supervisors

Lakewood Ranch Stewardship District

We have examined the Lakewood Ranch Stewardship District ("District") compliance with Section 218.41 5, Florida Statutes during the fiscal year ended September 30, 2016. Management is responsible for the District's compliance with those requirements, Our responsibility is to express an opinion on the Supervisor of Elections'compliance based on our e;<amination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Pubtic Accountants and, accordingly, included examining, on a test basis, evidence about the District'scompliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the District's compliance with specified requirements.

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2016.

This report is intended solely for the hformation and use of the Florida Auditor General, the Board of Supervisors for the District, and management, and is not intended to be and should not be used by anyone other than these specified parties.

~ - t - ~1~C

SHINN AND COMPANY, LLC

CERTIFIED PUBLIC ACCOUNTANTS

Bradenton, Florida

February 17, 201 7

24

Shinn & Company, LLC 1s a member oi Private Companies Practice Secllon I Amencan Institute of Certified Public Accountants I Flonda Institute of Certifted Public Accountants

SHINN ~co
CPAS AND BUSINESS CONSULTANTS 100 I 3rd Avenue West Suite 500 I Bradenton, FL 34205 RO Central Avenue Suite 91 O I Sarasota, Fl 34236

(T) 9417470500 I (F) 941 746,0202 www.sh1nnandco.com

MANAGEMENT LITTER

Board of Supervisors

Lakewood Ranch Stewardship District

Report on the Financial Statements

We have audited the financial statements of Lakewood Ranch Stewardship District ("District"), as of and for the f iscal year ended September 30, 2016. and have issued our report thereon dated February 77, 2017.

Auditor'sResponsibility

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; and Chapter 10.550, Rules of the Florida Auditor General.

Other Reports

We have issued our Independent Auditor's Report on Internal Control Over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountant'sReport on an examination conducted in accordance with A/CPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 70.550, Rules of the Auditor General. Disclosures in those reports, which are dated February 17, 207 7, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10.554(1)(i)l .. 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 and recommendations made in the preceding annual financial audit report.

Official Title and Legal Authority

Section 70.554(7)(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. This information has been included in the notes to the basic financial statements

25

Shinn & Company. LLC ,s a member of Private Companies Practice Section I American Institute of Certified Public Accountants I Florida Institute o; Certified Public Accountants

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 District has met one or more of the conditions described in Section 27 8.503(7 ), Florida Statutes, and iden:ification of the spedfic condition(s) met. In connection with our audit. we determined that the District did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

Pursuant to Sections l 0.554(7)(05.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management'sresponsibility to monitor the District'sfinancial 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 70.554(7 )(i)S.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for District for the fiscal year ended September 30, 2015, filed with the Florida Departme1t of Financial Services pursuant to Section 218.32(1 )(a), Flo6da Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2015. In connection with our audit, we jetermined that these two reports were in agreement.

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 70.554(7 )(i)3., Rules of the Auditor General, require 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 c:mnection 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 Board of Supervisors and applicable management. and is not intended to be and should not be used by anyone other than these specified parties.

l,L r G~r .Lk-

SHINN AND COMPANY, LLC

CERTIFIED PUBLIC ACCOUNTANTS

Bradenton, Florida

February 17, 2017

26

SHINN& CO