Sunday, December 22, 2013

Timothy Chaz Stevens

MyActsOfSedition.com (MAOS)
Post Office Box 1123
Deerfield Beach, FL 33443
Securities and Exchange Commission
cc: FEMA Inspector General
HUD Inspector General
State of Florida Inspector General
State of Florida Auditor General
State of Florida Legislative Auditing Committee
Broward OIG
Broward County Commission
RE: Investigation/Complaint concerning the City of Lauderdale Lakes
To whom it may concern;
MAOS is filing a formal complaint concerning the City of Lauderdale Lakes and
requests investigation and action against responsible officials in the City in addition to
immediate corrective action. We allege a systematic effort to overstate the financial
condition of the City by suspect and improper actions of responsible officials and
independent auditors who aided this cover-up. This directly led to incorrect financial
information being provided to financial institutions, investors, government agencies to
obtain grants, other local government agencies, and above all to the residents and
taxpayers of the City. As the highest level of government, the City Commission should
be held accountable for continuing this alleged Ponzi scheme by continuing to
approve and endorse these actions.
Due to the lack of action by the City to correct for the deteriorating economic and
financial conditions, as determined by a Broward County Office of Inspector General
Report, the City was in a state of financial emergency in 2011 as filed with the State of
Florida as required. At the end of fiscal year 2011 the general fund had a negative
$4.8M fund balance and the total overall Governmental Funds had a negative $5.4M
fund balance. The general fund is used to pay for all normal operating expenses of the
City. In addition, the City contracted with the Broward County Sheriffs Office (BSO)
for public safety services and owed BSO $9.2M for public safety operating costs
Page 2





through the end of fiscal year 2011. These operating expenses were properly
recorded creating the deficits identified above.
Attached are selected pages from the Citys audited financial statements for fiscal year
2012. On the Statement of Revenues, Expenditures and Changes in Fund Balances-
Governmental Funds there is clearly identified a $9.2M revenue identified as
Proceeds from Refinancing. And as noted there is only $51k in public safety
expenses for 2012. MAOS believes that the City Manager Jon Allen improperly used
the accounting treatment afforded under the Governmental Accounting Standards
Board (GASB) for refinancing of long term to his advantage. And this action was
subsequently endorsed by the independent auditor and ultimately approved by the
City Commission.
To highlight this gross misstatement, Florida Statute 166.101 only allows cities to issue
debt for capital projects. Further the City Charter Section 3.17 requires an ordinance
with public hearings to enact any debt within the City. From public records requests
there was not an ordinance adopted or public hearings held as required for the past
BSO operating expenses of $9.2M. This $9.2M for public safety operating expenses
through 2011 was properly recorded as such in 2011. Now as shown in 2012, all public
safety operating expenses are shown as capital expenditures. In direct conflict to this,
other pages in the financial statements clearly show the public safety operating
expenses as such not as capital expenditures. MAOS alleges that this is improper
treatment of past BSO contract operating expenses and certainly does not meet the
criteria allowed by GASB for the refinancing of long-term debt. This is not a debt at all
as outlined by FS 166 and the Citys own Charter Section 3.17. And past due BSO
contract operating costs are not capital expenditures no matter if they city agrees with
BSO to reimburse them over a period of time.
MAOS alleges that this was a ploy to show that 2012 now had positive fund balances
in the general and fire funds in addition to a positive balanced budget for 2012 thus
totally wiping out the negative fund balances from 2011 with this single swipe of the
pen. What is hidden you say? The actual operating results from 2012 reflect budget
deficits in the general fund of over $500k and over $600k in the fire fund. This
misinformation was provided through these audited financial statements to investors,
potential investors, granting agencies, companies doing business with the city, and
also to residents and taxpayers of the city. An example of this was a debt due to
Page 3





SunTrust Bank for past capital projects. This note was refinanced in August 2012 and
included provisions for a reduced interest rate when there were positive balanced
budget results shown. And Allen with City Commission and independent auditor
approval gave them those results for 2012 no matter how he had to manufacture
them.
In the Long Term Financial Recovery Plan, it was identified as goals to refinance
existing long-term debt and to sell off all city assets and then lease them back. This
new accounting would certainly help make the city look more attractive to investors
but is strictly a cover-up. In addition the City borrowed $2.5M from the Community
Redevelopment Agency (CRA) to pay operating expenses of the city. The city intends
to repay the CRA over the next 15 years. The CRA funds are restricted and any excess
is be used in the next budget year or refunded. The City has essentially forced its own
CRA to be in violation of FS 163. This is after the CRA has expended over $8M for city
projects not meeting CRA requirements under FS 163. As shown in the attachments,
they are claiming the City/CRA owns the 20,000 square foot library when in reality
Broward County built and owns the Library. Again misrepresentation.
In the financial statements, the grant fund of the City is indicated as having a deficit
cash balance of $884k and is carrying another $565k in accounts receivable related to
old HUD/CDBG cases. MAOS believes that if investigated it would determine that
these accounts receivables are old and uncollectable at this point in time and should
be written off. Writing these off would certainly further weaken the grant fund used to
support grant applications already applied for and future applications but would give
granting agencies the true picture. That is why Allen and company do not want to do
the right thing. The ongoing mess with HUD/CDBG is worthy of investigation by HUD-
MAOS encourages you to come in. The city received grant awards from FEMA for
firefighters (SAFER) in 2013 and police (COPS) in 2014. Wonder if FEMA would award
knowing the misrepresented financial condition of the city. And the following
highlights even bigger issues with grants.
The attached shows the Schedule of Expenditures of Federal Awards as required to be
shown in the financial statements for grants awards. The following page shows the
Summary Schedule of Findings and Questioned Costs from the auditor. Notice that
this is an Unqualified Opinion with no Material or Significant Weaknesses identified.
But MAOS would certainly challenge that. Following the Summary are six Significant
Page 4





Deficiencies identified covering nine pages. And Item 2012-06 is for the grant process
itself. How can this be -- six Significant Deficiencies but none shown on the Auditors
Opinion Summary as Significant or Material? MAOS has pointed out several times the
close personal relationship between Allen, certain Commission members, and External
Auditor Rod Harvey.
This systematic effort to deceive investors, potential investors, granting agencies,
businesses, other local government agencies, the State of Florida, and residents and
taxpayers has gone on long enough. It is time to sanction and hold those responsible
accountable. MAOS believes these misstatements and actions run rampant through
the City Manager, City Attorney, External Auditor, and are ultimately blessed by the
City Commission. It is time to close down this Ponzi scheme.
I stand ready to assist.

Timothy Chaz Stevens
MyActsOfSedition.com (MAOS)
Statutes & Constitution :View Statutes : Online Sunshine
The 2012 Florida Statutes
Title XII
MUNICIPALITIES
Select Year: 2012 -3 [ Go I
Chapter 166
MUNICIPALITIES
Page 1 of 1
View Entire Chapter
166.101 Oefinitions.-As used in this part, the following words and terms shall have the following
meanings unless some other meaning is plainly indicated:
(1) The term "bond" includes bonds, debentures, notes, certificates of indebtedness, mortgage
certificates, or other obligations or evidences of indebtedness of any type or character.
(2) The term "general obligation bonds" means bonds which are secured by, or provide for their
payment by, the pledge, in addition to those special taxes levied for their discharge and such other
sources as may be provided for their payment or pledged as security under the ordinance or resolution
authorizing their issuance, of the full faith and credit and taxing power of the municipality and for
payment of which recourse may be had against the general fund of the municipality.
(3) The term "ad valorem bonds" means bonds which are payable from the proceeds of ad valorem
taxes levied on real and tangible personal property.
(4) The term "revenue bonds" means obligations of the municipality which are payable from
revenues derived from sources other than ad valorem taxes on real or tangible personal property and
whfch do not pledge the property, credit, or general tax revenue of the municipality.
(5) The term "improvement bonds" means special obligations of the municipalfty which are payable
solely from the proceeds of the special assessments levied for an assessable project.
(6) The term "refunding bonds" means bonds issued to refinance outstanding bonds of any type and
the interest and redemption premium thereon. Refunding bonds shall be issuable and payable in the
same manner as the refinanced bonds, except that no approval by the electorate shall be required
unless required by the State Constitution.
(7) The term "governing body" means the council, commission, or other board or body In which t he
general legislative powers of the municipality shall be vested.
(8) The term "project" means a governmental undertaking approved by the governing body and
includes all property rights, easements, and franchises relating thereto and deemed necessary or
convenient for the construction, acquisition or operation thereof, and embraces any capital expenditure
which the governing body of the municipality shall deem to be made for a public purpose including the
refunding of any bonded indebtedness which may be outstanding on any existing project which is to be
improved by means of a new project.
Hlstory. - s. 1, ch. 73-129.
Copyright <0 1995-2013 The Florida Legislature Privacy Statement Contact Us
http://www.leg.state.fl .us/statutes/index.efm? App _ mode=Display _ Statute&Search _String=... 4/28/2013
Statutes & Constitution :View Statutes : Online Sunshine
The 2012 Florida Statutes
Title XII
MUNICIPALITIES
Select Year: 2012]3 ( Go J
Chapter 166
MUNICIPALITIES
Page 1 of 1
View Entire Chapter
166.111 Authority to borrow.-The governing body of every municipality may borrow money,
contract loansJ and issue bonds as defined in s. 166.101 from time to time to finance the undertaking of
any capital or other projeCt for the purposes permitted by the State Constitution and may pledge the
funds, credit, property, and taxing power of the municipality for the payment of such debts and bonds.
Htstory.-s. 1, ch. 73- 129; s. 2, ch. 92-345; s. 159, ch. 2003-261.
Copyright 1995-2013 The Florida Legislature Privacy Statement Contact Us
http://www.leg.state.fl.us/statut es/index.efm?App_mode=Display_Statute&Search_String= ... 4/28/2013
CITY OF LAUDERDALE LAKES, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
Other Total
Community lOOSGOBond Governmental Governmental
General Fire Rescue Grant Redeveloement Construction Funds Funds
REVENUES
Property taxes and tax increments 6,627,874 $ $ 1,409,887 s $ 1,050,700 9,088,461
Sales, usc and mo10r fuel lUes 558,044 558,044
Franchise and other tax., 3,197,388 17,430 3,214,818
Utility lUes 2,025,466 2,025,466
lntergovenunmental 2,8S4,801 2,854,801
Special assessment 4,076,941 4,076,941
Charges for servlcos, fines and forfeitnrres 1,447,714 312,788 138,537 1,899,039
Government gnnts and other SUJlllOit 10,586 284,281 290,707 . 210,958 856,532
Investment income .tJ(::.
7,322 435 1,470 268

Proceeds from refinancing contracts payabl 6,433,597 2,737,532 9,171,1
Other revenue 59,21
Total Revenues 7,127,696 I 719 494 33,814Ji8
EXPJtNDITIJRES
Cunmt
General government 4,581,315 4,581,315
Public safety
22,122 7,639 114 21,591 51,466
Public services 549,478 (S22) 548,956
Economic development S3,257 32,103 832,812 918,172
Culture and recn:_atlon 552,816 119,118 671,934
Highway and streots 628,404 366,041 994,445
Social services 75,321 366,815 442,136
Debt Service
Principal 1,054,757 298,494 506,426 S6S,719 2,425,396
Interest 238,056 430,355 473,841 1,142,252
Capital Ouday

66,622
m
14 536 14,172,676
Total Eltpenditures 5,2QZ,724
2!1-W. 1,72,221 (S22) 1,28,S43
Excess (deficiency of rovenucs over expenditures

S23 225,507 7 865 781
OTHER FINANCING SOURCltS (USES)
1nnsfCI1IO 395,000 395,000
Transfers Out {75,000) {75,000)
Total other financ!na sources and uses {75,000) 320000
Net Chan& in Fund Balance 5,898,936 2,119,972 66,319 (50,477) 523 150,507 8,185,781
Fuod Balanc<:s - Beginning {4,853,499)
- --J7S7,071J [628,283) (M37,a3J
Fund Balances - Ending $ 1,045,437 384 1io s !320,752) s 3,3:4(),8&1 $ 645,997 {547,776) 1,548.197
The accompanying independent auditors' report and notes are an integral part of these financial statements
20
CITY OF LAUDERDALE LAKES, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
Revenues:
Ad Valorem Taxes
Franchise Fees
Utility Taxes
Intergovernmental
Charges for Services
Licenses and Permits
Fines and Forfeitures
Interest
Grants and Other Revenue
Total Revenues
Expenditures:
Current:
General Government:
Mayor and Commission
City Attorney
City Clerk
City Manager
Finance and Information Technology
General Administration
Human Resources
Boards
Total General Government
Public Safety:
Police
EMS (Fire Services)
Total Public Safety
Public Works:
Maintenance
Total Public Works
Culture and Recreation:
Social Services Programs
Physical Environment:
Community Development
Total Physical Enviroment
Debt Service:
Principal
Interest
Capital Outlay:
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
FUND BALANCE- BEGINNING
FUND BALANCE- ENDING
ORIGINAL FINAL
BUDGET BUDGET
6,461,457 6,625,000
2,602,151 2,665,891
1,794,360 1,801,860
2,956,101 2,922,248
569,120 464,344
260,000 150,000
292,306 225,000
5,000 5,000
809,108 783,000
15,749,603 15,642,343
294,831 343,236
296,640 225,000
224.712 220,339
365,010 331,028
521 ,317 566,449
2,871,117 2,212,032
171 ,810 152,159
16,500 15,500
4,761,937 4,065,742.99
5,916,168 6,076,168
2,200,000 2,200,000
8,116,168 8,276,168
1,905,043 1,703,624
1,905,043 1,703,624
677,031 799,032
84,574 84,598
204,850 68,650
204,850 68,650
-d
387,394
257,134
15,749,603 15,642,343
$
VARIANCE
POSITIVE
ACTUAL (NEGATIVE}
6,627,873 2,873
3,256,018 590,127
2,025.466 223,606
2,925,123 2,875
811 ,722 347,378
148,236 (1,764)
316,005 91,005
6,420 1,420
6,927,142 6,144,142
23,044,006 7,401,663
298,372 44,864
208,615 16,385
205,431 14,909
307,680 23,348
525,822 40,627
2,077,215 134,818
135,156 17,002
7,377 8,123
3,765,668 300,075
6,124,340 (48,172)
2,300,61 1 {100,611)
8,424,951 (148,783)
1,421,438 282,186
1,421,438 282,186
552,816 246,216
75,321 9,277
261,624 (192,974)
261 ,624 (192,974)
1,054,757 (667,363)
238,056 19,078
534,792
16,329,422 (152,287)
6,714,584 7,553,950
{4,853,500)
1,861,084
CITY OF LAUDERDALE LAKES, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGET COMPARISON SCHEDULE
FIRE RESCUE FUND
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012
VARIANCE
ORIGINAL FINAL POSITIVE
BUDGET BUDGET ACTUAL {NEGATIVE}
Revenues:
Special Assessments 4,128,181.00 4,128,181.00 4,077,294.57 (50,886.43)
Charges for Services 612,781.00 612,781.00 297,982.66 (314,798.34)
Investment Income
Miscellaneous 200.00 200.00 21260,816.31 2,260,616.31
Total Revenues 4,741,162.00 4,741,162.00 6,636,093.54 1,894,931.54
Expenditures:
Current
Public Safety - Fire 4,600,000.00 4,606,094.00 4,514,577.55 91,516.45
Debt Service:
Principal 37,532.00 31,438.00 936.00 30,502.00
Interest 3,630.00 3,630.00 608.70 3,021.30
Total Expenditures 4,641,162.00 4,641,162.00 4,516,122.25 1251039.75
Excess (Deficiency) of Revenues
Over Expenditures 100,000.00 1001000.00 21119,971.29 1, 769,891.79
Other Financing Sources and (Uses)
Administrative Fees 75,000.00 75,000.00 (75,000.00)
Contingency 251000.00 25,000.00 !25,000.00)
100,000.00 100,000.00 (100,000.00)
Excess of Revenues and Other
Financing sources over Expenditures
and Other uses: 2,119,971.29 1,869,891.79
~
FUND BALANCE - BEGINNING (1, 735,562)
FUND BALANCE- ENDING $ 384,409
- 4R-
__ 1 : . ~ : . : . . _ _ __ _
Capital Lease
CITY OF LAUDERDALE LAKES
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
The City entered into a capital lease agreement to purchase air-conditioning
improvements and pay off the prior lease agreement covering lighting and air-
conditioning equipment with Key Government Finance, Inc. as lessees for financing the
air conditioning improvements. The lease agreement qualify as capital lease for
accounting purposes and, therefore have been recorded at the present value of future
lease payments as of the inception date with monthly payments of $5,767. Final
payment is due May 28, 2014.
The future (minimum) lease obligations and the net present value of capital lease
payments as of September 30, 2012 are as follows:
Fiscal Year Ending
September 30,
2012
2013
2014
Total minimum future lease payments
Less amount representing interest
Present value of minimum lease payments
Repayment Agreement
Broward Sheriffs Office Police and Fire Services
Amount
69,207
69,207
46,137
184,551
20,696
$ 163,855
During fiscal year 2011 the City renegotiated an agreement with the Broward Sheriffs
Office (BSO) for police and fire services. The previous contract expired in 2009. The
City has accepted BSO's claim of $1,523,736 which was derived from the increase of
the contract billings for cost allocations and OUl er Post Employment Benefits (OPEB)
charges; these costs were not included in the original contract.
The City has entered into a five year repayment agreement for the outstanding obligation
ue to BSO in the amount of $9,171,129. The total amount due represents repayment
r services rendered and OPEB costs for the period from October 1, 2009 through
eptember 30, 2011 .
BSO will provide the breakdown of principle and applied interest and the resulting
outstanding balance within 30 days of Fiscal Year close and provide a revised
outstanding balance schedule which shall be deemed an amendment to the repayment
agreement. Bi-Annual payments are made during January and July beginning in 2012
and continuing through 2016 based on the agreed upon payment for each fiscal year as
adjusted for accrued and paid interest and the principle.
42
CITY OF LAUDERDALE LAKES, FLORIDA
MANAGEMENT DISCUSSION AND ANALYSIS
Financial Analysis of the City's Funds
The City uses fund accounting to ensure and demonstrate compliance with the finance related
legal requirements.
Governmental Funds
The purpose of the City's governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources relative to the City's funding requirements.
Unreserved fund balance serve as the most useful measure of the City's net resources available
for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported a combined
ending fund balance of $4.5 million, an increase of $8.2 million in comparison with 2011. The City
properly reclassified the outstanding obligation, to the Broward Sheriffs Office, (B to long tenn
debt in accordance with the executed debt repayment agreement.
The Fire Rescu fund revenues exceeded its expenditures by an increase of $2.1. The increase
in overall revenues is due to the reclassification of the outstanding Broward Sheriffs Office
obligation to long-term debt.
During the fiscal year 2012, the City continued Community Development Block Grant programs.
The City will aggressively pursue reimbursements from outside grant agencies for the
expenditures of funds.
The Community Redevelopment Agency (CRA) fund expenditures exceeded its revenues by
$50,477. The CRA fund had a positive fund balance of $3.3 million for the fiscal year ended
2012. Note: that the CRA Fund budgets re-appropriated fund balance and anticipates use of fund
balance during the fiscal year.
The General Fund
The General Fund is the City's primary operating fund and largest source of day-to-day service
delivery. General tax revenues and other receipts that are not allocated by law or contractual
agreement to another fund are accounted for in this fund. General operating expenses, fixed
charges and capital improvement costs not paid through other funds are paid from this fund. At
the end of this reported fiscal year, the fund balance of the general fund was $1 million, compared
to a fund balance deficit in the prior year. Of the $1 million in fund balance in the general fund,
$125,621 of this amount is non-spendable leaving a $919,816 million in unassigned fund balance.
General Fund Budgetary Highlights
Since the City Administration did not recommend any material rev1s1ons to the original
appropriations in the General Fund budget there is not a significant amount of information to
highlight. The Budget and Actual Comparison schedule is provided in the Supplementary
Information for the General Fund and Major Special Revenue Funds.
The Budget and Actual Comparison Schedules show the original adopted budgets, the final
revised budget, actual results and variance between the final budget and actual results for the
General and Major Special Revenue Funds. After the original budget is approved, it may be
revised for a variety of reasons such as foreseen circumstances, loan proceeds, new grant
awards or other unanticipated revenues.
The remainder of this page is intentionally left blank
- 1 ') -
LONG-TERM FINANCIAL PLAN
As part of the need to provide financial stability to a weakening local economy, City Management
developed a Five-Year Financial Plan. The financial plan serves as a valuable tool to assist the City
Commission and City Management in making sound fiscal decisions particularly as it relates to the
surmountable debt service. Most important, the City negotiated and executed mutually acceptable
agreements with the Broward Sheriffs Office (BSO) for the following: (1) approximately $9 Million
outstanding obligations covering FY201 0 disputed Other Post Employment Benefits {OPEB) balances
and FY2011 police and fire rescue services costs and (2) new 5 Year City/BSO police and fire rescue
services agreement at a reduced cost to accommodate the City's limited revenues. To date, the City
continues to meet agreement and other requirements.
The City also adopted financial goals and objectives by which to measure the City's overall performance
and financial recovery from poor economic conditions. The City Commission and City Management
continued to review and evaluate the budgetary line items and give consideration to the elimination or
reduction of expenditures to halt the escalating debt accumulated in 2011. The City Administration must
continue to make recommendations to immediately reduce and manage expenses across the board,
including personnel costs and contractual services. In fiscal year 2012, the City maintained the increased
level for charges for services to meet anticipated reductions in revenue. As noted in the FY 2011 Annual
Report the City took extreme measures to minimize the financial crisis without jeopardizing critical City
services. The result of the fiscal constraint implemented in FY 2011 and continued into FY 2012 by City
Management can be seen in this September 30 year ended report. There was a significant positive
change in City's financial condition although the City continues to have financial challenges.
MAJOR INITIATIVES AND CAPITAL PROJECTS
During fiscal year 2012, the City effectively dealt with its financial challenge. The achievements are as
follows:
Paid over $1 million to Broward Sheriff Office (BSO) for City/BSO Police and Fire Rescue
Services Agreement to pay the City's outstanding debt obligations;
Paid current BSO obligations in a timely basis;
Provided monthly budget reports to keep the Mayor, City Commission, City Management and
external stakeholders updated on the City's financial condition;
Achieved a balance budget as of year ended September 30, 2012;
Implemented the City's Five Year Financial Plan; and
Implemented an agreement with Broward County for and or other governmental agencies to
complete the construction phases for the followmg grant funded capital projects: Federally
Funded Emergency Operations Center, CDBG/DRI Funded Alzheimer Care Center Improvement
Project, CDGB/DRI Funded Mast Arm Traffic Signal Project, and Stormwater Canal Bank
Stabilization Project.
Vl
CITY OF LAUDERDALE LAKES, FLORIDA
MANAGEMENT DISCUSSION AND ANALYSIS
--- --------------
Differences between the original budget and the final amended budget for the General Fund are
summarized as follows:
Revenues were decreased by $147,360 to account for decrease in state share revenue
receipts.
Expenditures were increased by $147,360 to reflect decreases in expenses to maintain a
balanced budget.
Capital assets:
The City's investment in capital assets net of accumulated depreciation for its governmental and
business-type activities as of September 30, 2012 amount to $52 million compared to $51 million
from the previous year. Among the major projects completed are the Alzheimer's Care Center
and the Mast Arms. The current CRA-related assets include the 20,000 square foot Library, the
City's Educational & Cultural Center (2nd floor of the Library) and the acquisition of 22-acre land
for future development.
Additional information on the City's capital assets can be found in Note 5 starting on page 34 of
this report.
City of Lauderdale Lakes
Capital Assets
(In thousands)
Governmental Activities Business Tme Activities Total
2012 2011

2011 2012
.!!U1
Land $ 17,700 $ 17,700 $ - $ - $ 17,700 $ 17,700
Construction in progress 2,733 13,307 2,733 13,307
Buildings 13,850 7,163 13,850 7,163
Machinery, Equipment and Vehicles 2,950 2,943 666 662 3,616 3,605
Infrastructure 28,878 23,937 4,631 4,519 33,509 28,456
Less accumulated depreciation 16,341 15,802 (2,833) 2,720 13,508 18,522
Total $ 49,770 $ 49,248 $ 2,464 $ 2,461 $ 57,900 $ 51,709
The remainder of this page is intentionally left blank
- 1 -
CI1Y OF LAUDERDALE LAKES, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FISCAL YEAR ENDED SEPTEMBER 30, 2012
Federal
CFDA
Federal Grantor/Pass-Through Grantor/Program 1itle Number
U.S. Department of Housing and Urban Development
Pass-Through Program from:
State of Florida Department of Housing and Urban Development
Passed through - Broward County
CDBG Service Area 6- Mast Arms and Traffic Signals 14.228
CDBG Service Area 7- Alzheimers Center Hurricane Improvement Project 14.228
Community Development Block Grant -37th Year Senior Quality of Ufe 14.218
Community Development Block Grant - 37th Year Senior Transportation 14.218
Community Development Block Grant - 37th Year Youth Leadership Program 14.218
Community Development Block Grant- 37th Year Minor Home Repair 14.218
Subtotal in-direct programs
Total U.S. Department of Housing and Urban Development
U.S. Department of Health and Human Services
Pass-Through Program from:
State of Florida Passed through -
Broward County
Special Programs for the Aging, Trtle 111-B Grants for Supportive
Services and Senior Centers 93.044
Total U.S. Department of Health and Human Services
U.S. Department of Agriculture
Pass-Through Program from:
Florida Department of Agricuhure
Summer Food Program 10.559
Total U.S. Department of Agriculture
Total Expenditures of Federal Awards
Pass-Through
Entity Identifying Federal Federal
Number Expenditures Award
08-DB-D3-11-1 lHl 1-A06 500,000 500,000
08-DB-D3-11-1 EH>1-A06 625,000 625,000
B-09-UC-12-001 18,005 18,162
B-09-UC-12-001 45,082 49,712
B-09-UC-12-001 12,668 12,508
B-09-UC-12-001 322,733
75 755 403,115
1,200,755 1,528,115
JA010-25-2012 52,055 52,055
52,055 52 055
04-0176 15,113 12,288
15,113 12,288
$ 1,267,924 1,592,458
CITY OF LAUDERDALE LAKES, FLORIDA
Summary Schedule of Findings and Questioned Costs
For the Year Ended September 30,2012
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of Auditors' report issued:
Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency(ies) identified that are
Not considered to be material weakness(es)?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over programs:
Material weakness(es) identified?
Significant deficiency{ies) identified that are
Not considered to be material weakness(es)?
Type of auditors' report issued on compliance for major
federal programs and state projects:
Any audit findings disclosed that are required to be reported in
accordance with section 5IO(a) ofOMB Circular A-133?
Identification of major programs:
Federal Program
Federal Programs
Community Development Block Grant
Community Development Block Grant
Dollar threshold used to distinguish between Type A and Type B
Federal Programs: $300,000
Auditee qualified as low-risk auditee for federal a\\'ard programs?
Unqualified
X No
Yes X No
---
_Yes X No
_Yes X No
_Yes X No
Unqualified
YesJ_No
Federal CFDA
14.218
14.228
_YesJ_No
----
SECTION II - FINANCIAL STATEMENT FINDINGS
SIGNIFICANT DEFICIENCIES
2012-01 Year End Closing Entries
Condition
We noted during the cour se of the audit that balance sheet accounts which include accru ed liabilities, capital
assets and due to/from in all funds reflected on the respective trial balances were not properly reconciled to reflect
the approptiate balances as of year-end.
Criteria
Prudent policies include a for mal closing process with supervisory Finance D epartment personnel being
responsible for the reYiev. and evaluation of transactions and balances recorded.
Cause
The cause of the conditions is the lack of a formal cl osing process which i ncorporates a thorough review by
finance personnel.
Effect
Formal closing procedures includes the following: reve rsing prior years accmals, d eterrnination that all
transactions have been recorded and posted, reconcili ng general ledger acco unts with subsidiary ledgers and
making necessary adjustments, mnning/print ing year-end reports in order to have a record of historical
transactions for the year (they will be useful dming the audit), etc. Lack of the implementation of these procedures
may result in misstatements in the fmancial statements.
Recommendation
The City should consider developing formal y ear end closing procedures. These procedures should include
timetables outlining appropriate due dates and instructi ons for schedules that should be prepared. The closing
procedures should be documented in a formal checklist that indicates the indiYidual responsible for the task, when
it is due to be co mpleted and when it is accomplished. We believe that a review and evaluation of transactions
recorded at year end should be performed to ensure the validity of amounts recorded, as well as reduce audit time.
The implementation of formal procedures will reduce tl1e need for numerous adjustments to financial records
during the audit process, delay in the preparation of financial reports needed by management and the auditors.
. - ~
VJeW of Responsible Officials and Planned Corrective Actions.
Management accepts the finding and reco mmendation. Management will establish procedures in the current
period to address the following issues:
..., The City will continue to strengthen its fmm al year end closing processes and procedures, which
incorporate a thorough review of all accounts to ensure all transactions have been recorded and reconciled
in a proper manner and timeframe.
)- The year-end closing process ,-,.ill include timelines and checklists for the Financial Services Depattment.
The new process will r equire the timely recording of year-end closing entries into the City 's Financial
Accounting System.
The City will endeavor to upgrade the City's Financial Accounting System and conduct employee training to
ensure a more efficient and effective year-end financial reporting process
-63-
. '\
SECTION ll- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SIGNIFICANT DEFICIENCIES (CONTINUED)
2012-02 Bank Reconciliations
Condition
During the course of the audit \Ve noted the City did not reconcile its pooled cash bank account proper! y nor was
it completed in a timely manner. Not reconciling the accounts on a monthly basis means that enors or other
problems might not be recognized and resolved on a tim ely basis. We also noted an unreconciled difference of
approximately $125,000. This difference was corrected by the City after the fiscal year end.
Criteria
Timely preparation of complete and accurate bank reconc iliations is a key to maintaining adequate control over
both cash receipts and disbursem ents. Bank accounts should be reconciled on am onthly basis which would
proYidc management a useful tool to monitorthe City' s cash position. The purpose of the bank reconciliation is to
prevent and detect errors or misappropriation of assets.
Cause
The monthly bank reconciliations were not prepared timely or properly and reviewed by management.
Effect
The City is susceptible to the concealment of misappropriation of cash assets and risk of misstatement of cash or
reconciling items.
Recommendation
We recommend that all bank accounts be reconciled and reviev-.ed each month prior to preparation of the monthly
financial statemen.ts. The review s hould include tests of mechanical accuracy and tracing of item s on the
reconciliation to the relevant sour ce documents. The composition of unreconciled differences should be
determined and followed up on, and any journal entries deemed necessary as a result be recorded.
" I
View of Responsible Officials and Planned Corrective Actions
Management accepts the finding and recommendation. Management "ill establish procedures in the current
period to address the following issues:
' The Financial Services Department will continue to enhance its bank reconciliation procedures to include
timelines and checklists.
' The timely completion of bank reconciliations will be prioritized and incorporated into the Financial
Sen ices Director and Financial Services Manager' s regular responsibilities, position descriptions and
performance evaluations.
' The Financial Services Director and/or designee "ill ensure the timely completion and accuracy of the
bank reconciliations on a monthly basis.
-64-
SECTION IT-FINANCIAL STATEMENT FINDINGS (CONTINUED)
2012-03 Disaster Recovery Plan
Condition
During the course of our audit, we inquired offmance personnel regarding the City' s disaster recovery plan. The
City should have a plan in place that would protect the financial data and se curity information in the case of a
natural disaster.
Criteria
Florida is especially susceptible to natural disasters i n the form of hurricanes and t omados. The staff should be
trained and backups to financial data and securit y systems made on a re gular basis. Back ups should be
maintained offsite.
Cause
The personnel knew that there was a plan, but did not know any details related to how it should work. There were
no drills or training to keep employt:t:s aware of the pro cedurt:s. Personnel wt:re not a wart: of any details of the
disaster recovery plan and the backups were maintained on site.
Effect
Without an appropriate disaster recoYery plan in effect, the City would be extremely hindered in their efforts to
get their senices up and running as so on as possible for its residents. The City would have lost the ability to
prO\ ide funds, purchase orders and other required documents to effectively account for and manage the recovery
process.
Recommendation
A disaster recovery plan should be formally adopted, written and included with the employees' handbook I
materials to include regular and consistent backups of financial data with a copy of those backups stored offsite.
There should also be an e stablishment of all security protocols required for both the backup and the recovery
procedures. Staff should be trainl!d on a regular and consisttmt basis regarding t:ach of their responsibilities in the
case of a disaster. The City should consider conducting a drill oftthe disaster recoYery plan at least once a year.
View of Responsible Officials and Planned Corrective Actions
Management accepts the finding and recommendation. Management \\ill establish procedures in the current
period to address the following issues:
' The Financial Services Department will update the City' s Disaster Preparedness and Recovery Plan.
-, The City will conduct any required employee training. The employee training sessions will be conducted
for the Financial Services Department and Other Departments as needed.
-, The City will continue to enhance its security protocols, back up and the recovery procedures.
- 65 -
....
SECTION II- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SIGNIFICANT DEFICIENCIES (CONTINUED)
2012-04 Accounts Receivable
Condition
We noted during the course of the audit that accounts receivable balances were not properly reconciled to reflect
the appropriate balances as of year-end.
Criteria
Prudent policies include a for mal closing process with supervisory Finance D epartment personnel being
responsible for the review and eYaluati on of transactions and balances recorded. The re\iew would include, at a
minimum, preparing a detailed aged accounts receivable ledger, revie\\ing balances for consideration for writ e
off, or for an adjustment to the allowance for doubtf ul accounts and following up with collection procedures to
make sure appropriate measures are being taken on overdue accounts.
Cause
The cause of the conditions is the lack of a formal cl osing process which i ncorporates a thorough review by
finance personnel.
Effect
Formal closing procedures includes the following: determination that all transactions have been recorded and
posted, reconciling general kdger accounts with subsidiar y ledgers or schedules and m aking necessary
adjustments, running/printing year-end reports in order to haYe a record of hi storical transactions for they ear
(they will be useful during the audit), etc. L ack of the i mplementation of these procedures may result in
misstatements in the financial statements preventing proper management consideration for those balances.
Recommendation
The City should consider developing formal accounts receiYable interim and year end closing procedures. These
procedures should include timetables outlining appropriate due dates and instructions for schedules that should be
prepared. The closing procedures should be docu mented in a form al checklist that indicates the individual
responsible for the task, when it is due to be completed and \\hsr it is accomplished. We believe that a review and
evaluation of transactions recorded at year end should be performed to ensure the validity of amounts recorded, as
vvell as redu ce audit time. The im plementation of form al procedures will reduce the need for numerous
adjustments to financial records during the audit process, delay in the preparation of financial reports needed by
management and the auditors.
View of Responsible Officials and Planned Corrective Actions
Management accepts the fmding and recommendation. Management will establish procedures in the current
period to address the following issues:
-,. The City will continue to strengthen its accounts receivable year-end closing processes and procedures,
which incorporates a thorough review of all accounts to ensure all transactions haYe been properly
recorded and reconciled in a proper timeframe.
- 66-
4"
SECTION II- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SIGNIFICANT DEFICIENCIES (CONTINUED)
2012-05 Accounts Payable
Condition
We noted during the course of the audit that accounts payable balances were not properly reconciled to reflect the
appropriate balances as of year-end.
Criteria
Prudent policies include a for mal closing process with supervisory Finance D epartment personnel being
responsible for the review and eYaluati on of transactions and balances r ecorded. The reYiew would include, at a
minimwn, preparing a detailed aged accounts pa yable ledger, reviewing balances for consi deration for review
with the ven dor, or for an adjust ment to the appropriate accounts and follov.ing up with vendor requests
concerning payment to make sure appropriate measures related to processing are being taken on invoices and the
related accounting recognition procedures.
Cause
The cause of the conditions is the lack of a formal cl osing process which i ncorporates a thorough review by
finance personnel.
Effect
Formal closing procedures includes the following: determination that all transactions have been recorded and
posted, reconciling general ledger accounts with subsidiar y ledgers or schedules and m aking necessary
adjustments, mnning/printing year-end reports in order to haYe a record of hi storical transactions for they ear
(they will be useful during the audit), etc. L ack of the i mplementation of these procedures may result in
misstatements in the financial statements preventing proper management consideration for those balances.
Recommendation
The City should consider developing o r m ~ accounts payable interim and year end closing procedures. These
procedures should include timetables outlining appropriate due dates and instructions for schedules that should be
prepared. The closing procedures should be docu mented in a form al checklist that indicates the individual
responsible for the task, when it is due to be completed and wheh it is accomplished. We believe that a review and
evaluation of transactions recorded at year end should be performed to ensure the validity of amounts recorded, as
well as redu ce audit time. The im plementation of form al procedures will reduce the need for numerous
adjustments to financial records during the audit process, delay in the preparation of financial reports nee ded by
management and the auditors.
View of Responsible Officials and Planned Corrective Actions
Management accepts the finding and recommendation. Management will establish procedures in the current
period to address the following issues:
,. The City will continue to strengthen its accounts payable year-end closing processes and procedures,
which incorporates a thorough review of all accounts to ensure all transactions haYe been properly
recorded and reconciled in a proper timeframe.
- 68-
SECTION ll- FINANCIAL STATEMENT FINDINGS (CONTINUED)
SIGNIFICANT DEFICIENCIES (CONTINUED)
20U-06 Grant review processes
Condition
We noted during the course of the audit that the City as a sub-recipient for two federal grant awards was not
properly reconciling and recording the grant activity to reflect the appropriate balances as of year-end.
Criteria
Prudent policies include a formal review process by supe rvisory Finance Department personnel responsible for
the recognition of grants, contracts and agreements . The review would include, at a minimum, a determination of
the reporting and subm ission requirements, expenditure limitations, responsibilities the City is to be held
accountable for and the preparation of a schedule of expenditures of federal awards.
Cause
The cause of the condition is the lack of a formal review process for grants, contracts and agreements which is
required of finance personnel in order to properly record the effects in the records for the City.
Effect
The recognition of federal grant award s includes the folio wing: determination that all transactions have been
recorded and posted correctly , all transactions meet the limitations expressed in the grant agreem ent, amounts
reconcile to the general I edger grant fund accounts with all related schedules for making necessary adjustments,
running/printing year-end reports in order to have a record of historical transactions forth e year {they will be
useful during the audit), the preparation of the schedule of expenditures of federal awards, etc. Lack of the
implementation of these procedures may result in misst atements in the fma ncial statements preventing proper
management consideration for those balances and any related grant compliance issues.
Recommendation
The City should consider developing a formal system of grant, contracts and agreements review procedures.
These procedures should include ti me tables outlining appropriate due dates and instructions for sched ules that
should be prepared and a detail listing of all compliance requirements. The procedures should be documented in a
" t
formal checklist that indicates the individual responsible for the task, when it is due to be completed and when it is
accomplished. Additionally, staff should be assigned the task of preparing the preliminary data required for the
schedule of e)l:penditures of federal awards. Web elieve that an additional review and evaluation of grants,
contracts and agreements at year end should be performed to ensure the validity of amounts recorded, as well as
reduce the time for completion of the audit. The i mplementation of formal procedures will reduce the need for
numerous adjustments to financial reco rds during the audit process and delay s in the preparation of financial
reports needed by management and the auditors.
View of Responsible Officials and Planned Corrective Actions
Management accepts the fmding and recommendation. Management will establish procedures in the current
period to address the following issues:
-70-
;... The City will develop a grant review process which will incmporate a thorough review of all grant
requirements that will outline appropriate due dates and instructions for grant required schedules .
., The grant review year-end process will include time lines and checklists for the Financial Setvices
Department and ensure accuracy of data recorded in the City' s Financial Accounting System.
-, The new process will require that staff timely prepare the preliminary data need to comply with grant
audit requirements .
.., The timely grant review process will be prioritized and incorporated into the Financial Services Director
and Financial Services Analyst's regular responsibilities, position description and performance
evaluation .
.., The City will endeavor to upgrade the City' s Financial Accounting System and conduct employee
training to ensure a more efficient and effective grant re\.iew year-end financial reporting process.
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Municode Page 1 of 1
Section 3.17.- Ordinances and resolutions.
"Ordinance" means an official, legislative action of the city commission which action is a
regulation of general and permanent nature and enforceable as a local law.
A "resolution" is an expression of the city commission on matters of official concern, opinion
or administration, of a temporary character, or a provision for the disposition of a particular item of
the administrative business of the governing body.
(1) Form. Each ordinance or resolution shall be introduced in writing and shall embrace
but one subject and matters properly connected therewith. The subject shall be clearly
stated in the title. No ordinance shall be revised or amended by reference to its title
only. Ordinances to revise or amend shall set out in full the revised or amended act,
section, subsection or paragraph of a section or subsection.
(2) Procedure. The proposed ordinance shall be read in full on the first reading, and by
title or in full on the second reading on at least two (2) separate dates, at either
regular or special meetings of the city commission; provided, however, upon the
affirmative vote of five (5) members of the city commission, the necessity that the
ordinance be read in full on the first reading may be waived. At least eight (8) days
prior to the second reading, a proposed ordinance shall be advertised at least once in
a newspaper of general circulation in the city. The notice of proposed enactment shall
state the date, time and place or places within the city where such proposed
ordinance may be inspected by the public. Said notice shall also advise that interested
parties may appear at the meeting and be heard With respect to the proposed
ordinance.
(3) Effective date. Each ordinance shall become effective on the date specified therein;
provided that in the absence of such designation in an ordinance, such ordinance
shall become effective on the tenth business day subsequent to its adoption.
(4) Action requiring an ordinance. In addition to other acts required by law or by specific
provision of this Charter to be done by ordinance, those acts of the city commission
shall be by ordinance which:
(a) Adopt or amend an administrative code, or establish, alter or abolish any city
department or agency;
(b) Establish a rule or regulation the violation which carries a penalty;
(c) Levy taxes authorized by general law;
(d) Grant, renew or extend a franchise;
(e) Set service or user charges for municipal services of [or] granting
administrative authority for such charges;
(f) Authorize the borrowing of money not inconsistent with the limitations in the
Constitution and general law of the state;
(g) Convey or lease or authorize by administrative action the conveyance or lease
of any lands of the city;
(h) Amend or repeal any ordinance previously adopted.
(Prop. No. 1, 11-2-1982; Ord. No. 97-23, 1-13-1998)
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