mayfam community development district basic … · for the year ended september 30, 2016 total...

MAYFAm COMMUNITY DEVELOPMENT DISTRICT

BASIC FINANCIAL STATEMENTS TOGETHER WITH REPORTS OF

INDEPENDENT AUDITOR

YEAR ENDED SEPTEMBER 30, 2016

TABLE OF CONTENTS

Page(s)

INDEPENDENT AUDITOR'S REPORT ...... ...... ... ......... .... ........... .......... ..... .......... 1-3

MANAGEMENT'S DISCUSSION AND ANALYSIS ... .............. .. ........ .. ... ..... .. .......... 4-8

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS:

Statement of Net Position .. ..... ....... ... .................. ......... . .. .... .. .......... ............... .... ..

Statement of Activities .. ... ....... ... .. . ..... ...... ...... .. .......... . .. ............ . .. ... . .... .... ......... .

FUND FINANCIAL STATEMENTS:

9

10

Balance Sheet - Governmental Funds . .. . .. .. . .. . .. . .. . .. . .. . .. . . . . . . . . . . . .. . .. .. . .. . . . . . . . . . . . . . . .. . .. . .. 11

Reconciliation of the Balance Sheet - Governmental Funds

to the Statement of Net Position .. . .. . . .. .. . .. . .. . .. . .. . .. . . .. . .. . .. .. .. . .. . . . .. . . . . . . .. . .. . . .. .. . .. . . .. .. 12

Statement of Revenues, Expenditures and Changes

in Fund Balances - Governmental Funds .. . .. . .. . .. . .. . .. . . .. .. . ... . .. .. . . . . . .. . . . .. . .. . .. . ... . .. ... .. . . 13

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to

the Statement of Activities . . . . .. .. . .. . . . . . .. .. . . .. .. . .. . . .. . . . . .. .. . .. . ... .. . . .. . .. . . .. . .. .. . . .. . . . . . . . . . .. 14

NOTES TO THE FINANCIAL STATEMENTS. .. ... . ... ... ... . . ... ....... ... .. ... .... ........... ... .... 15-24

REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A

Budget to Actual Comparison Schedule - General Fund . .. . . . . . . .. . . .. . .. .. . . . . .. . . .. . . . . . . . . . .. .. . . .. . . . 25

ADDITIONAL REPORTS OF INDEPENDENT AUDITOR

Independent Auditor's Report on Internal Control Over Financial

Reporting and on Compliance and Other Matters Based on an

Audit of Basic Financial Statements Performed in Accordance with Government Auditing Standards .. . .. . .. . .. . .. . .. . . .. . .. . . . .. . . . . . .. .. . .. . .. . . .. .. . . . . . . . . . . . . .. .. . . . . . . . . . . 26-27

Independent Auditor's Report on Compliance with the Requirements

of Section 218.415 , Florida Statutes, Required by Rule 10.556(10)

of the Auditor General of the State of Florida .. . .. . . . . .. . .. . .. . .. . .. . .. . . . . . . . .. . . . . . . . . . . . . . . .. .. . . .. . . . . 28

Management Letter Required by Chapter 10.550 of the Rules

of the Auditor General of the State of Florida..... . ......... ... ................. . ............... ..... . .. . . 29-31

INTEGRITY ..... KNOWLEDGE ..... SERVI CE ..... COMMITMENT®

Independent Auditor's Report

To the Board of Supervisors Mayfair Community Development District Melbourne, Florida

Report of the Financial Statements

We have audited the accompanying financial statements of the governmental activities, and each major fund, of Mayfair Community Development District (the "District") as of and for the year ended September 30, 2016 and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the 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 an opinion 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 Auditing 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity'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

Affiliations Florida Institute of Certified Public Accountants

American Institute of Certified Public Accountants - Management Consulting Services Division/Private Companies Practice Section/Tax Division

1-855-STROEMER • www.stroemercpa.com 14030 Metropolis Avenue, Suite 200, Fort Myers, FL 33912

Aventura • Fort Myers • Jacksonville• • Naples • Orlando• • Sanibel • Tampa• • West Palm Beach'

'By Appointment Only

Mayfair Community Development District Page 2

on opinion on the effectiveness of the entity'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 the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund of the District as of September 30, 2016, and the respective changes in financial position 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 and the budgetary comparison information, as listed in the table of contents, 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 placing 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 States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements' responses to our inquiries, the basic financial 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 June 19, 2017, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the 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.

Mayfair Community Development District Page 3

Report on Other Legal and Regulatory Requirements

We have also issued our report dated June 19, 2017, on our consideration of the District's compliance with the requirements of Section 218. 415, Florida Statutes, as required by Rule 10.556(10) of the Auditor General of the State of Florida. The purpose of that report is to provide an opinion based on our examination conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

c

STROEMER & COMP ANY, LL Aventura, Florida June 19, 2017

(j·l ll ..

MANAGEMENT'S DISCUSSION AND ANALYSIS

(MD&A)

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED) September 30, 2016

Page 4of31

Management's discussion and analysis of Mayfair Community Development District (the "District") financial performance provides an objective and easily readable analysis of the District's financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District's financial statements.

Overview of the Financial Statements

The District's basic financial statements are comprised of two components; 1) Government-wide financial statements, and 2) Fund financial statements. The Government-wide financial statements present an overall picture of the District's financial position and results of operation. The Fund financial statements present financial information for the District's major funds. The notes to the financial statements provide additional information concerning the District's finances.

The Government-wide financial statements consist of the statement of net position and the statement of activities . These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities and the change in the net position. Governmental activities are primarily supported by assessments .

The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is reported in three categories; 1) invested in capital assets, net of related debt, 2) restricted, and 3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities.

The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major functions and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. Governmental activities financed by the District include general government. The District does not have any business-type activities.

Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources.

Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances - budget to actual, is provided for the District's General Fund. Fund financial statements provide more detailed information about the District's activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.


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The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District's financial standing. These statements are comparable to private sector companies and give a good understanding of the District's overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of the District, including buildings, land and roads are reported in the statement of net position. All liabilities, including principal outstanding on bonds, and future employee benefits obligated but not paid by the District, are included . The statement of activities includes depreciation on all long lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid 11 doubling up 11 the revenues and expenses. The fund financial statements provide a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund financial statements to the government-wide financial statements, a reconciliation is provided.

Financial Highlights

General Highlights The following are highlights of the financial activity for the year ended September 30, 2016.

• The District's total assets exceeded total liabilities by $1,481, 799 (net position). Unrestricted net deficit for Governmental Activities was $6,201

• Governmental Activities revenues and expenses totaled $10,802 and $20,049, respectively.


Financial Analysis of the District

Page 6of31

The following schedule provides a summary of the assets, liabilities and net position of the District. It is not intended to be a complete presentation of government-wide financial activity.

September 30,

Current assets

Capital assets, net

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net Position

Invested in capital

assets, net of

related debt

Unrestricted

Total net position

$

2016

9,305

1,488,000

1,497,305

15,506

15,506

1,488,000

(6,201)

$ 1,481,799

Net Position

$

2015

6,978 1,488,000

1,494,978

3,931

3,931

1,488,000

3,047

$ 1,491,047

$

$

Change

2,327

2,327

11,575

11,575

(9,248)

(9,248)

For the year ended September 30, 2016 total assets increased $2,327 and total liabilities increased $11,575. The increase in assets is attributable to the timing of invoices being received and paid close to year end, and the increase in liabilities is attributable to certain vendors agreeing to have their invoices paid later than usual.


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The following schedule provides a summary of the changes in net position of the District and is presented at the government-wide level for comparison purposes. It is not intended to be a complete presentation of the District-wide financial activity.

Program Revenues

Charges for service

Grants and

contributions

Other revenues

Total revenues

Expenses

General government

Interest on long-term

debt

Total expenses

Change in Net Position

Net Position - Beginning

of year

Net Position - End

of year

$

$

Change in Net Position

2016

10,323 $

479

10,802

20,050

20 050

(9,248)

1,491,047

1,481 ,799 $

2015

9,106 $

16,806

1,576,250

1,602, 162

16,788

10,764

27 552

1,574,610

(83,563)

Change

1,217

(16,327) (1 ,576,250)

(1,591,360)

3 262

(10,764)

(7,502)

(1,583,858)

1,574 610

1,491,047 $ (9,248) ==~========

The decrease in total revenues and change in net position is due to the contribution from the Developer that was made in the prior year, which was used to pay off the District's outstanding bond obligations

The reduction in total expenses is due primarily to not having any interest expense in the current year.


Capital Assets and Debt Administration

Capital Assets Activity

The following schedule provides a summary of the District's capital assets activity as of September 30, 2016 and 2015.

Page 8of31

Description 2016 2015 Change

Construction in progress $ 1 488,000 $ 1,488,000 "'-$-~---

There is no depreciation expense for the year ended September 30, 2016. More information about the District's capital assets is presented in Note B to the financial statements.

Debt Administration

The District has no outstanding debt.

General Fund Budgetary Highlights

Actual expenses were lower than budgeted amount due to lower than anticipated expenditures for certain general government expenses.

The original adopted budget was amended during the year. Budget revenues and expenses were reduced by $42,020.

Future Financial Factors

The District is an independent special district that operates under the provisions of Chapter 190, Florida Statutes. The district operates under an elected Board of Supervisors, which establishes policy and sets assessments rates. Assessment rates for fiscal year 2016 were established to provide for the operations of the District.

Request for Information

The financial report is designed to provide a general overview of Mayfair Community Development District's finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Governmental Management Ser\rices, 5385 N. Nob Hill Road, Sunrise, Florida 33351.

BASIC FINANCIAL STATEMENTS

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT STATEMENT OF NET POSITION September 30, 2016

ASSETS Cash and cash equivalents Prepaid expenses Capital assets: N ondepreciable

TOTAL ASSETS

DEFERRED OUTFLOWS OF SOURCES

LIABILITIES

Accounts payable Deferred revenue

Non-current liabilities:

TOT AL LIABILITIES

DEFERRED INFLOWS OF RESOURCES

NET POSITION Investment in capital assets, net of related debt Unrestricted

TOT AL NET POSITION

The accompanying notes are an integral part of this statement.

Page 9 of3 l

Governmental Activities

$ 5,225 4,080

1,488,000

1,497,305

11,426 4,080

15,506

1,488,000 (6,201)

$ 1,481,799

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT STATEMENT OF ACTIVITIES Year ended September 30, 2016

Program Revenues

Functions/Programs

GOVERNMENT AL ACTIVITIES

General government

Physical environment

Total Governmental Activities

TOT AL PRIMARY

-GOVERNMENT

Charges for

Expenses Services Contributions

$ (20,050) $ 10,323 $ 479

$ ~20,050) $ 10,323 $ 479

$ (20,050) $ 10,323 -'=$ === 4_7_9

CHANGE IN NET POSITION

NET POSITION

OCTOBER 1, 2015

NET POSITION

SEPTEMBER 30, 2016


Page 10 of31

Net (Expense)

Revenue and

Changes in

Net Position

Governmental

Activities

$ (9,248)

~9 ,248)

(9,248)

(9,248)

1,491 ,047

$ 1,481,799

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT Page 11 of 31 BALANCE SHEET- GOVERNMENTAL FUNDS September 30, 2016

Total

General Non Major Governmental

Fund Fund Funds

ASSETS

Cash and cash equivalents $ 5,225 $ - $ 5,225

Due (to) from other funds 4,200 (4,200)

Prepaid expenses 4,080 4,080

TOT AL ASSETS $ 13,505 $ (4,200) $ 9,305

LIABILITIES AND FUND

BALANCES

LIABILITIES Accounts payable $ 11,426 $ - $ 11,426

Deferred revenue 4,080 4,080

TOT AL LIABILITIES 15,506 15,506

FUND BALANCES (DEFICIT)

Nonspendable 4,080 4,080

Unassigned (6,081) (4,200) (10,281)

TOTAL FUND DEFICITS (2,001) (4 200) (6,201)

TOT AL LIABILITIES AND

FUND BALANCES (DEFICIT) $ 13,505 $ (4,200) $ 9,305


MAYFAIR COMMUNITY DEVELOPMENT DISTRICT Page 12of31 RECONCILIATION OF THE BALANCE SHEET- GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION

September 30, 2016

Total governmental fund balances

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

Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds. The statement of net position includes those capital assets, net of any accumulated depreciation, in the net position of the government as a whole.

Capital assets not being depreciated

Total net position of governmental activities


Amount

$ (6,201)

1,488,000

$ 1,481,799

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT Page 13 of31 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

Year ended September 30, 2016

Total General Non Major Governmental

Fund Fund Funds

REVENUES Developer contributions $ 479 $ - $ 479 Assessments 10,323 10,323

TOT AL REVENUES 10,802 10,802

EXPENDITURES Current: General government 20,050 20,050

Debt service:

TOT AL EXPENDITURES 20,050 20,050

Excess (Deficiency) of Revenues Over (Under) Expenditures $ (9,248) $ - $ (9,248)

NET CHANGE IN FUND BALANCES (9,248) (9,248)

Fund balance (deficit) - October 1, 2015 7>247 (4,200) 3,047

Fund deficit - September 30, 2016 $ {2,001) $ { 4,200) $ ~6 ,201 )


MAYFAIR COMMUNITY DEVELOPMENT DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

September 30, 2016

Page 14 of3 l

There are no differences between the change in fund balances as stated on the Statement of Revenues, Expenditures and Changes in Fund Balances and the change in net position on the Statement of Activities. The change on both statements is ($9,248).


MAYFAIR COMMUNITY DEVELOPMENT DISTRICT NOTES TO FINANCIAL STATEMENTS September 30, 2016

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Page 15 of31

The financial statements of Mayfair Community Development District (the "District) have been prepared in accordance with generally accepted accounting principles (

11 GAAP 11) as applied to governmental units. The Governmental Accounting Standards

Board ('GASB ") is the accepted standard-setting body for establishing governmental accounting and financial reporting principle. The District's significant accounting policies are described below.

Reporting Entity

The District was established on April 10, 2007 pursuant to the Uniform Community Development District Act of 1980, otherwise known as Chapter 190, Florida Statutes, by the City of Melbourne, Florida Ordinance No. 2007-20 (collectively referred to as the "Act"). The Act provides, among other things, the power to manage basic services for community development, power to borrow money and issue bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure. The District was established for the purposes 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 a five-member Board of Supervisors ("the Board"), who are elected on an at large basis by owners of the property within the District. Among the primary powers, which the Act provides, the Board may exercise is the power to assess and levy special assessments, approve budgets, exercise control over facilities and properties, control the use of funds generated by the District, approve the hiring and firing of key personnel, and financing improvements. Certain Board members are affiliated with the Developer, Southern Homes.

As required by GAAP, these financial statements present the Mayfair Community Development District (the primary government), as a stand-alone government. The reporting entity for the District includes all functions of government in which the District's Board exercises oversight responsibility which includes, but is not limited to, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters.

As of September 30, 2016, the District has identified no component units .


Page 16of31

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Basis of Presentation

The basic financial statements of the District are comprised of the following :

Government-wide Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the non-fiduciary activities of the primary government. Governmental activities, which normally are supported by assessments, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support from these statements.

Governmental activities, which normally are supported by special assessments and interest, are reported separately from business-type activities. Program revenues included charges for services and special assessments. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program. The District did not have any business-type activities during the year ended September 30, 2016.

Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financial source.

Amounts paid to reduce long-term indebtedness of the District are reported as a reduction of the related liability, rather than as an expenditure.

Fund Financial Statements In the fund financial statements, financial transactions and accounts of the District are organized on the basis of funds each of which is considered a separate accounting entity. Each fund is accounted for by a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance/net position, revenues and expenditures/expenses. The individual funds account for the governmental resources allocated to them for the purpose of carrying on specific activities in accordance with laws, regulations, or other restrictions. Since the governmental fund statements are presented on a different measurement focus and basis of accounting the government-wide statements, a reconciliation is presented which briefly explains the adjustments necessary to reconcile the fund financial statements to the government-wide financial statements. The following is a brief description of the specific funds used by the District.


Page 17of31


Basis of Presentation, continued

Governmental Major Funds General Fund - this fund is the District's primary operating fund. It accounts for all financial resources of the general government, except those required to accounted for in another fund.

Debt Service Fund - this fund accounts for debt service requirements for the District's outstanding long-term debt obligations.

For the year ended September 30, 2016, the District does not have any proprietary funds.

Measurement Focus and Basis of Accounting

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. All assets and liabilities of the District are recorded in these financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flow. Special assessments are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the granter agency have been met.

The governmenta~ funds use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when susceptible to accrual (i.e., when they are both "measurable and available") . "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period.

The District considers revenues to be available if they are collected within 60 days after year-end. Special assessments and interest are susceptible to accrual. Intergovernmental revenues collected and held by other governments are also recognized as revenue. Other receipts become measurable and available when cash is received by the District and are recognized as revenue at that time. Expenditures are recognized in the accounting period in which the fund liability is incurred except for un-matured interest on debt which is recognized when due.


Page 18of31


Measurement Focus and Basis of Accounting, continued

Assessments, including debt service assessments along with operation and maintenance assessments, are non-ad valorem special assessments imposed on all lands located within the District and benefited by the District's activities, operation and maintenance. Assessments are levied and certified for collection by the District prior to the start of the fiscal year which begins October 1st and ends on September 30th. Operation and maintenance special assessments are imposed upon all benefited lands located in the District. Debt service special assessments are imposed upon certain lots and lands as described in each resolution imposing the special assessment for each series of bonds issued by the District.

Developer contributions and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District.

When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first, then unrestricted resources as they are needed. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds and finally unassigned funds, as needed, unless the District's Board had provided otherwise in its commitment or assignment actions.

Cash, Cash Equivalents and Investments

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories", a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.

The District is authorized to invest in financial instruments as established by Section 218.415, Florida Statutes. The authorized investments include among others, direct obligations of the United States Treasury; the Local Government Surplus Funds Trust as created by Section 218.405, Florida Statutes; SEC registered money market funds


Page 19 of31


Cash, Cash Equivalents and Investments, continued

with the highest credit quality rating from a nationally recognized rating agency; and interest-bearing time deposits or savings accounts in authorized financial institutions.

Inter.fund Activity

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds" . Any residual balances outstanding between the governmental activities and business-type activities are reported as "internal balances"

Capital Assets

Capital assets, which primarily include infrastructure assets (roads, sidewalks, water management systems and similar items), are reported in the governmental activities column in the government-wide financial statements.

The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years The valuation basis for all assets is historical cost. Donated capital assets are recorded at estimated fair value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend its useful life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Depreciation of capital assets is computed and recorded by utilizing the straight-line method over the estimated useful life of the depreciable assets as follows:

Asset

Roadways and other Water and sewer systems Recreation and security Furniture, fixtures and equipment

Years

40 5-40 5-30

5


Page 20of31


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 are deferred and amortized over the life of the bonds using the straight-line or effective interest method. Bonds payable are reported net of these premiums or discounts. Issuance costs, whether or not withheld form the actual debt proceeds received, are reported as current period expenses.

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

Deferred Outjlowsllnffows of Resources

In addition to assets, the Statement of Net Position will sometimes include a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow ofresources (expense/expenditure) until then. The District does not have any of this type of item at September 30, 2016.

In addition to liabilities, the Statement of Net Position will sometimes include a separate section for deferred inflows of resources. This separate financial statement element represents a acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until then. The District does not have any ofth~s type of item at September 30, 2016.

Fund Equity

Net position in the government-wide financial statements represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources and is categorized as net investment in capital assets, restricted, or unrestricted. Net investment in capital assets represents assets related to infrastructure and property, plant and equipment, net of any related debt. Restricted net position represents the net position restricted for debt service.


Page21 of31


Fund Equity, continued

In accordance with GASB No . 54 "Fund Balance Reporting and Governmental Fund Type Definitions", the District has policies governing the following fund balance classifications:

Nonspendable - this classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted - this classification includes amounts that can be spent only for specific purposes stipulated by constitution, external providers, or through enabling legislation.

Committed - this classification includes amounts that are constrained for specific purposes imposed by the District's Board.

Assigned - this classification consists of amounts that the Board intends to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District's management company.

Unassigned - this classification is the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

Budgets

Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to the requirements of Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general, debt service, and business funds . As a result, deficits in the budget columns of the accompanying financial statements may occur.


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Budgets, continued

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

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

• A public hearing is conducted to obtain comments. • Prior to October 1, the budget is legally adopted by the District Board. • All significant budget changes must be approved by the District Board. • Budgets are adopted on a basis consistent with accounting principles generally

accepted in the United States of America.

Use of Estimates

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

NOTE B- CAPITAL ASSETS

Capital assets activity for the year ended September 30, 2016 is as follows :

Balance Balance Government Activities 10/01/2015 Additions Dis_Qosals 9/30/2016

Capital assets, not being depreciated: Construction in progress $ 1,488,000 $ - $ - $ 1,488,000

Total capital assets, not being depreciated 1,488,000 1,488,000

Governmental activities capital assets $ 1,488,000 $ - $ - $ 1,488,000

As discussed in Note E, the District has ceased substantially all activities. The future of the project is unknown.


NOTE C - RISK MANAGEMENT

Page 23 of3 l

The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance.

NOTED - MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting services. Certain employees of the management company also serve as officers (Board appointed, non-voting positions) of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting and other administrative costs.

NOTE E- RELATED PARTY TRANSACTIONS

A significant portion of the District's activity is dependent upon the continued involvement of the Developer, Southern Homes, the loss of which could have a material adverse effect on the District's operations.

During the year ended September 30, 2016, the Developer contributed $479 to pay for operations and maintenance expenses incurred by the District. Additionally, the District directly assessed the Developer $10,323 for operating and maintenance assessments.

The District has decided to cease substantially all activities. For the fore&eeable future, The District is only going to have general operating activities. The Developer is in the process of defining what the long-term plan for the community is and will not start any additional construction until the plan is finalized.

NOTE F- INTERFUND ACTIVITY

The outstanding balances between funds is a result of the District maintaining one bank account, which is held in the general fund. All activity in the debt service and non-major funds are recorded as due to/from other funds.


NOTE G - SUBSEQUENT EVENTS

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Pursuant to the provisions set forth in GASB Statement No. 56, "Subsequent Events", management has considered subsequent events through June 19, 2017, the date the audit report was available to be issued.

SUPPLEMENTARY INFORMATION

MAYFAIR COMMUNITY DEVELOPMENT DISTRICT Page 25of31 BUDGET TO ACTUAL COMPARISON SCHEDULE - GENERAL FUND Year ended September 30, 2016

Variance with Original Final Final Budget Budget Budget Actual Over {Under)

REVENUES Assessments $ 25,000 $ 10,000 $ 10,323 $ 323 Developer contributions 42,506 15,486 479 (1 5,007)

Total revenues 67,506 25,486 10,802 (14,684)

EXPENDITURES General government 67,506 25,486 20,050 (5,436) Physical environment

Total expenditures 67,506 25,486 20,050 {5,436)

EXCESS OF REVENUES OVER EXPENSES $ - $ - $ ~9,248) $ ~9,248)

ADDITIONAL REPORTS OF INDEPENDENT AUDITOR

AND MANAGEMENT LETTER

INTEGRITY ..... KN OWLED GE ..... SERVICE ..... COMMITMENT®

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 Mayfair Community Development District

Page 26of31

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governmental Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of Mayfair Community Development District (the "District"), as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated June 19, 2017.

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 audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.




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Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have direct and material effect on the determination of financial statement amounts . However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

\

t

STROEMER & COMP ANY, LLC Aventura, Florida June 19, 2017

INTEGRITY . . ... KNOWLEDGE .. . .. SERVICE .... . COMMITMENT®

Independent Auditor's Report On Compliance With The Requirements of ection 218.415, Florida Statut s, Required by Rule

10.556(10) Of The Auditor General Of The State Of Florida

Board of Supervisors Mayfair Community Development District City of Melbourne, Florida

Page 28of31

We have examined Mayfair Community Development District (the 11 District 11) compliance with the

requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida 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 District's compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the District's compliance 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 information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, management, and the Board of Supervisors of Mayfair Community Development District, Brevard County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

--STROEMER & C01\.1P ANY, LLC Aventura, Florida June 19, 201 7 Affiliations

Florida Institute of Certified Public Accountants American Institute of Certified Public Accountants - Management Consulting Services Division/Private Companies Practice Section/Tax Division


Aventura • Fort Myers • Jacksonville* • Naples • Orlando* • Sanibel • Tampa• • West Palm Beach'


INTEGRITY ... . . KNOWLEDGE . . . .. SERVICE . ... . COMMITMENT®

Management Letter Required By Chapter 10.550 Of The Rules Of The Auditor General For the State Of Florida

Board of Commissioners Mayfair Community Development District Brevard County, Florida

Report on the Financial Statements

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We have audited the financial statements of Mayfair Community Development District (the "District"), Florida, as of and for the fiscal year ended September 30, 2016, and have issued our report thereon dated June 19, 2017.

Auditor's Responsibility

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of

' the Auditor General .

Other Reports and Schedule

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's Report on an examination conducted in accordance with AICP A Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are dated June 19, 2017, should be considered in conjunction with this management letter.

Prior Audit Findings

Section 10. 554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding audit report:




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Financial Condition

Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, requires that we report the results of our determination as to whether or not Mayfair Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific conditions met. In connection with our audit, we determined that the Mayfair Community Development District did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management1s responsibility to monitor the District1s financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same.

Annual Financial Report

Section 10.554(1)(i)5 .b. 10.556(7), Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for Mayfair Community Development District for the fiscal year ended September 30, 2016, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2016. In connection with our audit, we determined 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 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida

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Auditor General, Federal and other granting agencies, as applicable, the Board of Commissioners of Mayfair Community Development District and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

st?~~~ STROEMER & C01\.1P ANY, LLC Aventura, Florida June 19, 2017

mayfam community development district basic … · for the year ended september 30, 2016 total...

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