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I I I I I I I I I I I I I I I I I I I SECTION 11- FINANCIAL STATEMENT FINDINGS AND RECOMMENDATIONS (CONTINUED) B. STATUS OF PRIOR YEAR FINDINGS (CONTINUED) Other Matters No. 2004-2 Enterprise fund deficits CONDITION: During our testing of the enterprise funds we noted that the Sanitation Fund had an operating loss of approximately $124,000 during 2004. The fees charged to the City by Miami-Dade County for waste disposal have increased; however, there's been no adjustments to rates charged to the residents for these services. We also noted that the Water & Sewer Fund and the Sanitation Fund had deficits in unrestricted net assets of approximately $278,000 and $51,000, respectively. These deficits in unrestricted net assets represent negative reserves for future repairs and improvements to the City's Utility System. CURRENT YEAR STATUS/MANAGEMENT RESPONSE: The City Council approved a 55% increase in water and sewer rates effective 10/1/05, the rate increases generated revenues in excess of expenses of approximately $1,102,148 and no transfers from the General Fund were needed to cover operations. Also, the fund now has a positive unrestricted net asset balance of $44,821. However, the Sanitation fund continues to experience operating losses and for 2006 the fund had a negative working capital and a deficit unrestricted net asset balance. We recommend that the City raise its current sanitation rates to cover operations. This comment will be repeated. Reportable Conditions No. 2002-10 Lack of controls over golf course operation CONDITION: As a result of the performance of certain procedures over the Golf Course and Country Club operations, we noted a lack of internal control over cash receipts, cash disbursements, payroll, and general operations, i) We noted that there is no formal policy for verifying the customer's residence for the use of the discounted resident rates. A formal policy should be established for verifying the customer's residence as well as the residence of individuals accompanying the resident golfer. ii) Once the Pro Shop closes, the sale of tokens for a basket of golf balls for the drive range is handled by a part-time employee, which sells the tokens from a booth. There are no controls in place to ensure that all baskets of golf balls were paid for at the end of the day. There is a vending machine that can be used for this service however the machine is out of service most of the time, CURR~NT YEAR STATUS/MANAGEMENT RESPONSE: The management company was terminated on February 28, 2006. The golf course operation became a City department and a new department head was hired to oversee the operation. All financial activities are performed and controlled by the City's finance department using the same policies, procedures, and controls in place for all City operations. A daily reconciliation of range ball sales is performed to ensure that all revenues are collected, this reconciliation is agreed to the sales reports generated by the new software. All pro shop staff now checks driver's licenses to ensure residency requirement. This comment will not be repeated.