Comprehensive Annual Financial Report - 2022-2023 CRANOW-
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DOWNTOWN STREETSCAPE
CLERMONT The addition of brick pavers on select streets, upscaled
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GOMMUNITY landscaping and improved parking has enhanced the
QRA VELOPENT
GE N C Y % . LOOK of Downtown Clermont.
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The upgrades and extension of the entire
underground utility network has improved the
FUNCTIONALITY of this energetic and thriving community.
City of Clermont, Florida Community Redevelopment Agency
Table of Contents
Page
Financial Section
Independent Auditor's Report
Management's Discussion and Analysis 3
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position 6
Statement of Activities 7
Fund -Financial Statements:
Balance Sheet- Governmental Funds 8
Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 9
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budgetand Actual -
General Fund 10
Notes to the Financial Statements 11
Other Reports
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 18
Management Letter 20
Independent Auditor's Report on Compliance with the Requirements of Section 218.415, Florida
Statutes 22
Independent Auditor's Report on Compliance with the Requirements of Section 163.387(6) and (7),
Florida Statutes 23
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
FINANCIAL SECTION
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
I 1
McDirmit Davis
I MJ
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, and each major fund, of the City of Clermont, Florida
Community Redevelopment Agency (the "CRA'), a component unit of the City of Clermont, as of and for the year ended September
30, 2023, and the related notes to the financial statements, which collectively comprise the CRA's basic financial statements as
listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the
governmental activities, and each major fund, of City of Clermont, Florida Community Redevelopment Agency, as of September 30,
2023, and the respective changes in financial position, and the respective budgetary comparison for the General Fund, for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of the CRA and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
The CRA's 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, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the
aggregate, that raise substantial doubt about the CRA's ability to continue as a going concern for twelve months beyond the financial
statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a
high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and
design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the CRA's internal control.
Accordingly, no such opinion is expressed.
the partner
Page 11
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial
doubt about the CRA's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit, significant audit findings, and certain internal control —related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis,
on page 3 through 5 be presented to supplement the basic financial statements. Such information is the responsibility of
management and, 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 management's 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 October 25, 2024, on our consideration of
City of Clermont Community Redevelopment Agency's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the effectiveness of 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 City of Clermont Community Redevelopment
Agency's internal control over financial reporting and compliance.
Orlando, FL
October 25, 2024
Page 12
MANAGEMENT'S DISCUSSION AND
ANALYSIS
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
As management of the City of Clermont, Florida Community Redevelopment Agency (the "CRA") we offer readers of the CRA's
financial statements this narrative overview and analysis of the financial activities of the CRA for the fiscal year ended September 30,
2023.
Financial Highlights
• The assets of the CRA exceeded its liabilities at September 30, 2023 by $614,611 (net position). All of this amount is
restricted for community redevelopment.
• The CRA's total net position decreased by $108,291 (or 21.4%).
• At September 30, 2023, the CRA's governmental funds reported ending fund balances of $614,611. Of this amount
$608,560 is restricted for the purpose of community redevelopment.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the CRA's basic financial statements. The CRA's basic
financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and
3) notes to the financial statements.
Government -wide financial statements
The government -wide financial statements are designed to provide readers with a broad overview of the CRA's financial position, in
a manner similar to a private -sector business. They include a Statement of Net Position and a Statement of Activities.
The Statement of Net Position presents information on all of the CRA's assets and liabilities and deferred inflows/outflows of
resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the CRA is improving or deteriorating.
The Statement of Activities presents information showing how the CRA's net position changed during the most recent fiscal year. All
changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government -wide financial statements distinguish functions of the CRA that are principally supported by taxes and
intergovernmental revenues (governmental activities).
The government -wide financial statements include only the CRA itself (known as the primary government).
Fund financial statements.
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific
activities or objectives. The CRA, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements. The general fund of the CRA is categorized as a governmental fund.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -
wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus
on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating the CRA's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare
the information presented for governmental funds with similar information presented for governmental activities in the government -
wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes
in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
Page 13
City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
The CRA adopts an annual appropriated budget for the general fund. A budgetary comparison statement has been provided for the
General Fund to demonstrate compliance with the budget.
The basic governmental fund financial statements can be found on pages 8 -10 of this report.
Notes to the Financial Statements.
The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund
financial statements. The notes to financial statements can be found on pages 11 -17 of this report.
Government -Wide Financial Analysis
Statement of Net Position
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the CRA,
assets exceeded liabilities by $614,611 at the close of the most recent fiscal year. All of the CRA's net position is subject to external
restrictions as to how it may be used.
The following table reflects the condensed statement of net position for the current and prior year. For more detail see the Statement
of Net Position on page 6.
As of September 30,
Governmental Activities
2023 2022
Assets:
Current and other assets $ 626,434 $ 615,183
Total assets 626,434 615,183
Liabilities:
Other liabilities 11,823 108,863
Total liabilities 11,823 108,863
Net Position:
Restricted 614,611 506,320
Total net position $ 614,611 $ 506,320
Statement of Activities
The following table reflects the condensed Statement of Activities for the current year and prior year. For more detailed information see
the Statement of Activities on page 7. Note that the government's total net position increased by $108,291 or 21.4% in fiscal year
2023. For the previous fiscal year, net position decreased by $886.
Page 14
City of Clermont, Florida Community Redevelopment Agency
Management's Discussion and Analysis
For the Year Ended September 30,
Revenues:
Taxes
Investment income (loss) and miscellaneous
Total revenues
Expenses:
Economic environment
Total expenses
Increase in Net Position
Net Position - Beginning
Net Position - Ending
Governmental Activities
2022-23 2021-22
$ 653,261 $ 502,346
14,040 (5,873)
667,301 496,473
559,010 497,359
559,010 497,359
108,291 (886)
506,320 507,206
$ 614,611 $ 506,320
Revenues increased by $170,828 from the previous year and total expenses increased $61,651. The increased revenues were
primarily due to increased property values, while the additional expenses were primarily caused by an increase in professional
services related to potential future projects.
Financial Analysis of the CRA's Funds
As noted earlier, the CRA uses fund accounting to ensure and demonstrate compliance with finance -related requirements.
Governmental Funds.
The focus of the CRA's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable
resources. Such information is useful in assessing the CRA's financing requirements. In particular, unassigned fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
As of September 30, 2023, the CRA's governmental fund reported an ending fund balance of $614,611 an increase of $108,291
in comparison with the prior year.
General Fund Budgetary Highlights
During the year revenues were more than budgetary estimates by $12,041 primarily due to investment gains. Expenditures were
less than budgetary estimates by $603,434 due to delays in capital projects.
The original general fund appropriations increased $535,521 mostly due to anticipated capital land purchase and professional
services.
The comparison of budgeted results to actual results for the general fund is shown on page 10.
Requests for Information
This financial report is designed to provide a general overview of the CRA of Clermont's finances for all those with an interest in
the government's finances. Questions concerning any of the information should be addressed to the office of the Finance
Director, City of Clermont, P.O. Box 120219, Clermont, Florida 34712.
Page 15
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
BASIC FINANCIAL STATEMENTS
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
City of Clermont, Florida Community Redevelopment Agency
Statement of Net Position
September 30, 2023
Governmental Activities
Assets:
Cash and cash equivalents
$ 297,095
Investments
322,305
Receivables, net
983
Prepaid costs
6,051
Total assets 626,434
Liabilities:
Accounts payable and accrued expenses 11,823
Total liabilities 11,823
Net Position:
Restricted for community redevelopment 614,611
Total net position $ 614,611
The accompanying Notes to Financial Statements are an integral part of this statement. Page 16
City of Clermont, Florida Community Redevelopment Agency
Statement of Activities
Year Ended September 30, 2023
Program Revenue
Operating Grants Capital Grants and
Functions/Proarams:
Expenses and Contributions Contributions
Governmental Activities:
Economic environment
$ 559,010 $ $ $
Total governmental activities
559,010
Total primary government
$ 559,010 $ $ $
General Revenues:
Taxes
Miscellaneous and investment income
Total general revenues
Change in net position
Net Position - beginning
Net Position - ending $
Net (Expense) Revenue and
Changes in Net Position
Governmental Activities
(559,010)
(559,010)
(559,010)
653,261
14,040
667,301
108,291
506,320
614,611
The accompanying Notes to Financial Statements are an integral part of this statement.
Page 17
City of Clermont, Florida Community Redevelopment Agency
Balance Sheet
Governmental Funds
September 30, 2023
General
Assets:
Cash and cash equivalents
$ 297,095
Investments
322,305
Receivables, net
983
Prepaid costs
6,051
Total assets
$ 626,434
Liabilities:
Accounts payable $ 11,823
Total liabilities 11,823
Fund Balances:
Nonspendable 6,051
Restricted 608,560
Total fund balances 614,611
Total liabilities, and fund balances $ 626,434
The accompanying Notes to Financial Statements are an integral part of this statement. Page 18
City of Clermont, Florida Community Redevelopment Agency
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Year Ended September 30, 2023
General
Revenues:
Taxes $ 653,261
Investment earnings 14,040
Total revenues 667,301
Expenditures:
Current:
Economic environment
559,010
Total expenditures
559,010
Net Change in Fund Balances
108,291
Fund Balances - beginning
506,320
Fund Balances - ending
$ 614,611
The accompanying Notes to Financial Statements are an integral part of this statement. Page 19
City of Clermont, Florida Community Redevelopment Agency
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
General
Year ended September 30, 2023
Revenues:
Taxes
Investment earnings
Total revenues
Expenditures:
Current:
Economic environment
Total expenditures
Excess (deficiency) of revenues over
expenditures
Fund Balance - beginning
Fund Balance - ending
Actual Amounts,
Budgeted Amounts
Budgetary Basis
Original
Final
624,923
$ 653,260
$ 653,261
2,000
2,000
14,040
626,923
655,260
667,301
626,923 1,162,444
626,923 1,162,444
- (507,184)
506,320 506,320
506,320 $ (864) $
W
559,010
559,010
108,291
506,320
614,611 $
Variance with
Final Budget -
Positive
(Negative)
1
12,040
12,041
603,434
603,434
615,475
615,475
The accompanying Notes to Financial Statements are an integral part of this statement. Page 110
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
NOTES TO FINANCIAL STATEMENTS
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The City of Clermont, Florida (the "City") created the Community Redevelopment Agency (CRA) in May of 1997. This is a dependent
taxing district established in accordance with Chapter 163, Part III, Florida Statutes. Notification to affected taxing agency was done in
compliance with Chapter 163.346, Part III, Florida Statutes. The incremental annual increase in tax over the base years will be used to
fund projects designed to enhance and improve the described area. The purpose of the CRA is to carry out the community
redevelopment programs and plans within the area. In 2015, the City expanded the CRA and passed Ordinance No. 2015-77 and
modification of the Community Redevelopment Plan was approved. The CRA is governed by a board of seven- the five members of
the Clermont City Council and two individuals appointed by the City Council.
The CRA's financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP). The
governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its
pronouncements (Statements and Interpretations). The more significant accounting policies established in GAAP and used by the
CRA are discussed below. The financial statements have also been prepared in accordance with GASB Statement 34, Basic Financial
Statements and Management Discussion and Analysis for State and Local Governments.
In evaluating how to define the government, for financial reporting purposes, the CRA has considered all potential component units.
The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially
accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its
officials appoint a voting majority of an organization's governing body, and either it is able to impose its will on that organization or
there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary
government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on
A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects or
activities of, or the level of services performed or provided by, the organization. A financial benefit or burden relationship exists if the
primary government (a) is entitled to the organizations' resources; (b) is legally obligated or has otherwise assumed the obligation to
finance the deficits of, or provide financial support to, the organization; or (c) is obligated in some manner for the debt of the
organization. In applying the above criteria, the CRA is a component unit of the City.
Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information
on all of the nonfiduciary activities of the CRA. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues
include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided
by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of related cash flows. Property taxes 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 provider have been met.
Page 111
City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the
end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is received by the CRA.
The government reports the following funds:
The General Fund is the government's primary operating fund and was established as a dependent taxing district. The
incremental annual increase in tax over the base years will be used to fund projects designed to enhance and improve the
described area.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally
dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all
taxes.
When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources
first, then unrestricted resources as they are needed.
Assets, Liabilities, Deferred Outflowsllnf lows and Net Position/Fund Balance:
Deposits and Investments
The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments
with original maturities of three months or less from the date of acquisition.
Investments of the CRA are reported at fair value and are categorized within the fair value hierarchy established in accordance
with GASB Statement No. 72, Fair Value Measurement and Application. The CRA's investments consist of investments
authorized per their investment policy adopted in accordance with Section 218.415, Florida Statutes.
Receivables and Payables
All receivables are shown net of an allowance for uncollectibles.
The CRA's primary source of revenue is tax -increment funds. This revenue is computed by applying the respective operating tax
rates for the City, County and Lake County Water Authority, multiplied by increased value of property located within the
boundaries of the redevelopment areas of the CRA in excess of the base property value, minus 5%. The City, County and Lake
County Water Authority are required to fund this amount annually without regard to tax collections or other obligations.
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as
expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government -wide and fund financial statements. These are recorded as expenditures when consumed rather than when
purchased.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capital Assets
Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks,
and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide
financial statements. Capital assets are defined by the CRA as assets with an initial, individual cost of $5,000 or more and an
estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at acquisition value at the date of donation. Any assets purchased with CRA
funds are conveyed to the City for ownership and maintenance. As a result, the CRA does not own any capital assets at
September 30, 2023.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not
capitalized.
Long -Term Obligations
In the government -wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities statement of net position.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position
that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The
CRA does not have any item that qualifies for reporting in this category.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The CRA does not
have any item that qualifies for reporting in this category.
Net Position Flow Assumptions
Sometimes the CRA will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and
unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the
government -wide statements, a flow assumption must be made about the order in which the resources are considered to be
applied. It is the CRA's policy to consider restricted net position to have been depleted before unrestricted net position is applied.
Fund Balance Flow Assumptions
Sometimes the CRA will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of
committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed,
assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about
the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to
have been depleted before using any of the components of unrestricted fund balance. Further, when the components of
unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund
balance. Unassigned fund balance is applied last.
Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of
resources for specific purposes. The CRA itself can establish limitations on the use of resources through either a commitment
(committed fund balance) or an assignment (assigned fund balance).
The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a
formal action of the CRA's highest level of decision -making authority. The Council is the highest level of decision -making
authority for the CRA that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted,
the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of another resolution) to
remove or revise the limitation.
Page113
City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Amounts in the assigned fund balance classification are intended to be used by the CRA for specific purposes but do not meet
criteria to be classified as committed. The Council has maintained authority to assign fund balance.
The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated
revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment.
Conversely, as discussed above, an additional action is essential to either remove or revise a commitment.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities as of the financial statement
date and the reported amounts of revenues and expenses or expenditures during the reporting period. Actual results could differ
from those estimates.
New GASB Statements Implemented
In fiscal year 2023, the CRA has not implemented any new accounting standards with a material effect on the CRA's financial
statements.
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
The CRA follows these procedures in establishing the budgetary data reflected in the financial statements:
• Prior to the end of the fiscal year, the City Manager submits to the City Council a proposed operating budget for the fiscal
year commencing the following October 1. The operating budget includes proposed expenditures and the means of
financing them.
• Budget workshops are scheduled as needed.
• The general summary of the budget and notice of public hearing is published in the local newspaper.
• Public hearings are conducted to obtain taxpayer comments.
• Prior to October 1, the budgets are legally enacted through passage of a resolution.
• A separate CRA board meeting is also held to approve the budget.
• The City Manager is authorized to transfer budgeted amounts within departments; however, any revisions that alter the total
appropriations of any department must be approved by the City Council.
• The level of classification detail at which expenditures may not legally exceed appropriations is the department level.
• Appropriations lapse at the close of the fiscal year to the extent they have not been expended. Encumbrance accounting is
employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported
as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be re -appropriated
and honored during the subsequent year.
• Budgets are adopted for the general fund on a basis consistent with generally accepted accounting principles, except as
described below under Budget Basis of Accounting. Budgets are also adopted for the enterprise funds: however, budgetary
comparisons are not presented since they are not required under generally accepted accounting principles.
• The City Council, by Ordinance or Resolution, may make supplemental appropriations in excess of those originally
estimated for the year up to the amount of available revenues. Budgeted amounts presented in the accompanying financial
statements have been adjusted for legally authorized revisions.
Budgetary Basis of Accounting
The CRA includes a portion of the prior year's fund balances represented by unappropriated liquid assets remaining in the fund as
budgeted revenue in the succeeding year. The results of operations on a GAAP basis do not recognize the fund balance allocation as
revenue as it represents prior periods' excess of revenues over expenditures. The CRA does not budget for capital outlay
expenditures and other financing sources related to the acquisition of assets through notes payable.
Page114
City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 3 CASH AND INVESTMENTS
Deposits
All bank deposits were fully covered by federal depository insurance or by collateral held in banks that are members of the State of
Florida's Collateral Pool as specified under Florida law. Florida Statutes provide for collateral pooling by banks and savings and loans.
This limits local government deposits to "authorized depositories".
Investments
Investments in all fund types are stated at fair value, which is the amount for which an investment could be exchanged in a current
transaction between willing parties, other than in a forced liquidation sale. Fair value is based on quoted market prices. Changes in the
fair value of investments are recognized as revenue and included in investment income.
The CRA's investment policies are governed by state statute and city ordinance. Authorized investments are:
• The Local Government Surplus Funds Trust (SBA).
• SEC registered money market funds.
• Interest -bearing time deposits or savings accounts in qualified public depositories.
• Direct obligations of the U.S. Treasury.
• Federal agencies and instrumentalities.
• Securities of, or other interests in, any open-end or closed -end management -type investment company or investment trust
registered under the Investment Company Act of 1940.
Repurchase Agreements.
Other investments authorized by ordinance.
Investments made by the CRA of Clermont at September 30, 2023 are summarized below.
Weighted Average
Investment Type
Value
Credit Rating
Maturity
Federal Agency Mortgage -Backed Securities $
2,057
AA+
7.75 years
Federal Agency Commercial Mortgage -Backed Securities
3,309
AA+
1.73 years
Federal Agency Collateralized Mortgage Obligation
1,570
AA+
1.78 years
US Treasury Notes
62,595
AA+
2.06 years
Supra -National Agency Bond/Note
3,226
AAA
0.98 years
Corporate Note
33,511
BBB+/AAA
1.87 years
Asset Backed Security
27,407
AAA/NR
3.57 years
Municipal Bonds
1,125
AA+/AA
1.04 years
FL Palm
187,505
AAAm
76 days
$
322,305
Credit Risk
The CRA's investment policy limits credit risk by restricting authorized
investments to those
described above.
Custodial Credit Risk:
In the case of deposits, this is the risk that in the event of a bank failure, the CRA's deposits may not be returned to it. The CRA's
investment policy requires that bank deposits be secured as provided by Chapter 280, Florida Statutes. This law requires local
governments to deposit funds only in financial institutions designated as qualified public depositories by the Chief Financial Officer of
the State of Florida, and creates the Public Deposits Trust Fund, a multiple financial institution pool with the ability to assess its
member financial institutions for collateral shortfalls if a default or insolvency has occurred. At September 30, 2023, all of the CRA's
bank deposits were in qualified public depositories.
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the
value of its investments or collateral securities that are in the possession of an outside party. At September 30, 2023, none of the
investments listed are exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or
book entry form.
Concentration of Credit Risk:
The CRA's investment policy requires diversification but does not specify limits on types of investments.
Interest Rate Risk:
The CRA's investment policy does not specifically address interest rate risk, however the general investment policy is to apply the
prudent -person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek
reasonable income, preserve capital, and in general, avoid speculative investments. The CRA manages its exposure to declines in fair
values by investing primarily in pooled investments that have a weighted average maturity of less than three months.
Fair Value
The CRA categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting
principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value
of the asset. The CRA uses a market approach in measuring fair value that uses prices and other relevant information generated by
market transactions involving identical or similar assets liabilities, or groups of assets and liabilities.
Assets or liabilities are classified into one of three levels. Level 1 is the most reliable and is based on quoted price for identical
assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtaining quoted prices for
identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable, and uses significant
unobservable inputs that uses the best information available under the circumstances, which includes the CRA's own data in
measuring unobservable inputs.
The CRA has the following recurring fair value measurements as of September 30, 2023:
Investments Valued by Fair Value Level
Federal Agency Mortgage -Backed Securities $
2,057
Federal Agency Commercial Mortgage -Backed Securiti
3,309
Federal Agency Collateralized Mortgage Obligation
1,570
US Treasury Notes
62,595
Supra -National Agency Bond/Note
3,226
Corporate Note
33,511
Asset Backed Security
27,407
Municipal Bonds
1,125
$ 134,800
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
62,595
Significant Other
Observable Inputs
( Level 2)
$ 2,057
3,309
1,570
3,226
33,511
27,407
1,125
62,595 $ 72,205
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City of Clermont, Florida Community Redevelopment Agency
Notes to Financial Statements
Year Ended September 30, 2023
NOTE 4 RELATED PARTY TRANSACTIONS
The CRA is a component unit of the City of Clermont, Florida. For the year ended September 30, 2023, the CRA's tax increment
revenues include $304,361 received from the City. In addition, the CRA reimbursed the City for services performed on behalf of the
CRA such as payroll and payroll benefits, paid during the year.
NOTE 5 RISK MANAGEMENT
The CRA 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 CRA carries commercial insurance. The CRA has obtained excess insurance coverage with
varying retentions and limits to further limit exposure to large losses. There have been no significant reductions in insurance
coverage from the prior year and settlements have not exceeded insurance coverage during the past three years.
NOTE 6 COMMITMENTS AND CONTINGENCIES
Litigation
The CRA is engaged in various liability claims incidental to the conduct of its general government operations at September 30,
2023. While the ultimate outcome of the litigation cannot be determined at this time, management believes that any amounts not
covered by insurance, if any, resulting from these lawsuits would not materially affect the financial position of the CRA.
NOTE 7 SOURCE OF DEPOSITS AND PURPOSE OF WITHDRAWALS
Pursuant to Florida Statute 163.387, listed below is a summary of the sources and amounts of deposits to, and the purpose and
amounts of withdrawals from the CRA Funds for the fiscal year ended September 30, 2023:
Source of Deposit:
Tax increment $ 653,261
Investment income (loss) 14,040
Total sources $ 667,301
Purpose of Withdrawal:
CRA grants and contributions
$ 158,988
Salaries and benefits
93,730
Capital outlay
81,587
Rentals
54,917
Miscellaneous
32,739
Professional services
87,320
Sponsored events
25,985
Utilities
17,094
Insurance
5,687
Repairs and maintenance
963
Total withdrawals
$ 559,010
Page 117
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
OTHER REPORTS
L E R M D N T
(DOMMUNITY
(DE DEVELOPMENI
G E N C Y
I 1
McDirmit Davis
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United
States, the financial statements of the governmental activities, and each major fund of the City of Clermont, Florida Community
Redevelopment Agency (the "CRA"), as of and for the year ended September 30, 2023, and the related notes to the financial
statements, which collectively comprise the CRA's basic financial statements and have issued our report thereon dated October
25, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the CRA's internal control over financial reporting
(internal control) as a basis for designing 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
CRA's internal control. Accordingly, we do not express an opinion on the effectiveness of the CRA's internal control over financial
reporting.
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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not
designed to identify all deficiencies in internal control 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 that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the CRA's financial statements are free from material misstatement,
we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the determination of financial statement 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 result of our tests disclosed instances of noncompliance, or other matters that are required to be reported
under Government Auditing Standards, and which are described below.
ML23-01 Timely Completion of Annual Audit
Florida Statutes require the annual audit to be submitted no later than nine months after the CRA's fiscal year end. Due to
staffing issues and delays with prior year audits, the audit was not able to be completed in a timely manner. We recommend the
CRA implement procedures to ensure annual audits are completed in a timely manner.
Management Response
The fiscal year ended 2018 audit was the most recent audit completed prior to the state required deadline. Completion of this
fiscal year end 2023 audit marks the third audit completed during the past 18 months. The Finance Department is well -positioned
to meet the deadline for fiscal year end 2024.
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Page118
CRA's Response to Findings
The CRA's response to the findings identified in our annual audit are included in this report. The CRA's response was not
subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on
it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control 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.
Orlando, FL
October 25, 2024
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McDirmit Davis
I MJ
MANAGEMENT LETTER
Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
Report on the Financial Statements
We have audited the financial statements of the City of Clermont, Florida Community Redevelopment Agency (the "CRA"), as of
and for the fiscal year ended September 30, 2023, and have issued our report thereon dated October 25, 2024.
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 Florida Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and
Independent Auditor's Report on an examination conducted in accordance with ACIPA Professional Standards, AT-C Section
315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those
reports and schedule, which are dated October 25, 2024, should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i.)l ., Rules of the Auditor General, require that we determine whether or not corrective actions have been taken to
address findings and recommendations made in the preceding annual financial audit report. Corrective actions have not been taken
as noted below:
Tabulation of Uncorrected Audit Findings
Current Year Finding # 2021-22 FY Finding # 2020-21 FY Finding #
ML 23-01 ML 22-01 ML 21-01
ML 23-02 ML 22-02 NIA
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary
government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to
the financial statements. This information has been disclosed in the notes to the financial statements.
Financial Condition and Management
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us apply appropriate procedures and report the results
of our determination as to whether or not the CRA has met one or more of the conditions described in Section 218.503(1), Florida
Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the CRA did not meet
any of the conditions described in Section 218.503(1), Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment
procedures for the CRA. It is management's responsibility to monitor the CRA's financial condition, and our financial condition
assessment was based in part on representations made by management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial
management. In connection with our audit, we did not have any such recommendations.
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Page 120
Specific Information (Unaudited)
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the Auditor General, the CRA reported:
a. The total number of District employees compensated in the last pay period of the District's fiscal year as zero.
b. The total number of independent contractors to whom nonemployee compensation was paid in the last month of the
District's fiscal year as 2.
c. All compensation earned by or awarded to employees, whether paid or accrued, regardless of contingency as zero.
d. All compensation earned by or awarded to nonemployee independent contractors, whether paid or accrued, regardless of
contingency as $202,649.
e. Each construction project with a total cost of at least $65,000 approved by the district that is scheduled to begin on or after
October 1 of the fiscal year being reported, together with the total expenditures for such project as none.
f. A budget variance based on budget adopted under Section 189.016(4), Florida Statutes, this information is included in the
general fund budget statement.
Additional Matters
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.
ML23-01 Investment Policy
During our audit, we noted that the required continuing education courses were not taken and properly documented by the
designated individual as required by the City's investment policy and Florida Statutes. The former finance director left in August
2023, and documentation of investment CPE was not maintained. We recommend that the CRA implement procedures to ensure
the proper continuing education courses are taken and documented each year as required by Florida Statutes.
Purpose of This Letter
Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida
Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the council, and
applicable management, and is not intended to be and should not be used by anyone other than these specified parties.
Orlando, Florida
October 25, 2024
Page 121
1 1 934 North Magnolia Avenue, Suite 100
McDirmit Davis Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
mj
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES
The Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
We have examined City of Clermont, Florida Community Redevelopment Agency's (the CRA) compliance with the requirements of
Section 218.415, Florida Statutes, during the year ended September 30, 2023. Management is responsible for the CRA's compliance
with those requirements. Our responsibility is to express an opinion on the CRA'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 the standards applicable to attestation engagements contained in Government Auditing Standards issued by the
Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the CRA'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 CRA's
compliance with specified requirements.
In our opinion, the CRA complied, in all material respects, with the aforementioned requirements for the year ended September 30,
2023, except for the noncompliance disclosed in management comment 23-02.
Orlando, Florida
October 25, 2024
the partner
Page 122
I 1
McDirmit Davis
I j
934 North Magnolia Avenue, Suite 100
Orlando, Florida 32803
407-843-5406
www.mcdirmitdavis.com
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH
THE REQUIREMENTS OF SECTION 163.387 (6) AND (7), FLORIDA STATUTES
The Honorable Mayor and Council
City of Clermont, Florida Community Redevelopment Agency
We have examined City of Clermont, Florida Community Redevelopment Agency's (the CRA) compliance with the requirements of
Section 163.387 (6) and (7), Florida Statutes, during the year ended September 30, 2023. Management is responsible for the CRA's
compliance with those requirements. Our responsibility is to express an opinion on the CRA'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 the standards applicable to attestation engagements contained in Government Auditing Standards issued by the
Comptroller General of the United States and, accordingly, included examining, on a test basis, evidence about the CRA'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 CRA's
compliance with specified requirements.
In our opinion, the CRA complied, in all material respects, with the aforementioned requirements for the year ended September 30,
2023.
F� ► ► -ALM
Orlando, Florida
October 25, 2024
the partner
Page 123