2018 STATE OF FLORIDA CAFR

2018 STATE OF FLORIDA CAFR

2018 STATE OF FLORIDA CAFR

ACKNOWLEDGEMENTS

The Florida Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018, was prepared by:

DIVISION OF ACCOUNTING AND AUDITING J. Paul Whitfield, Jr., Director Mark A. Merry, Assistant Director BUREAU OF FINANCIAL REPORTING Danta M. White, CPA, Bureau Chief Ryan D. Nolan, CPA, Assistant Bureau Chief STATEWIDE FINANCIAL REPORTING SECTION Chunping Y. Lin, CPA Leonor M. Skoglund Pamela J. Barksdale David E. James Janine A. Knight Sherif A. Nessim Lyna Ty

SPECIAL APPRECIATION Special appreciation is given to all fiscal and accounting personnel throughout the State of Florida who contributed financial information for their agencies and component units. The report cover was designed by the Publications Unit, Division of Administration, Department of Financial Services.

STATE OF FLORIDA

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

Fiscal Year Ended June 30, 2018

Ron DeSantis

GOVERNOR

Jimmy Patronis

CHIEF FINANCIAL OFFICER FLORIDA DEPARTMENT OF FINANCIAL SERVICES

This document and related information is available via the Florida Department of Financial Services' homepage at:

2018 STATE OF FLORIDA CAFR

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED JUNE 30, 2018

TABLE OF CONTENTS

INTRODUCTORY SECTION

Letter of Transmittal................................................................................................................................................. Organizational Chart and Principal Officials ...........................................................................................................

PAGE

6 9

FINANCIAL SECTION

INDEPENDENT AUDITOR'S REPORT ............................................................................................................

13

MANAGEMENT'S DISCUSSION AND ANALYSIS.........................................................................................

16

BASIC FINANCIAL STATEMENTS

Government-wide Financial Statements

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

24

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

25

Governmental Fund Financial Statements

Fund Descriptions...........................................................................................................................................

27

Balance Sheet..................................................................................................................................................

28

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position....................

31

Statement of Revenues, Expenditures, and Changes in Fund Balances .........................................................

32

Reconciliation of the Statement of Revenues, Expenditures, and Changes in

Fund Balances of Governmental Funds to the Statement of Activities ....................................................

35

Proprietary Fund Financial Statements

Fund Descriptions...........................................................................................................................................

37

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

38

Statement of Revenues, Expenses, and Changes in Fund Net Position..........................................................

40

Statement of Cash Flows ................................................................................................................................

42

Fiduciary Fund Financial Statements

Fund Descriptions...........................................................................................................................................

47

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

48

Statement of Changes in Fiduciary Net Position............................................................................................

49

Component Unit Financial Statements

Component Unit Descriptions ........................................................................................................................

51

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

53

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

54

Notes to the Financial Statements

Table of Contents ............................................................................................................................................

57

Note 1 - Summary of Significant Accounting Policies...................................................................................

58

Note 2 - Deposits and Investments .................................................................................................................

70

Note 3 - Receivables and Payables................................................................................................................. 112

Note 4 - Taxes and Tax Abatements ............................................................................................................... 116

Note 5 - Capital Assets ................................................................................................................................... 123

Note 6 - Pensions and Other Postemployment Benefits................................................................................. 126

Note 7 - Commitments and Operating Leases................................................................................................ 141

Note 8 - Bonds Payable and Certificates of Participation .............................................................................. 143

Note 9 - Installment Purchases, Capital Leases, and Public-Private Partnership........................................... 152

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2018 STATE OF FLORIDA CAFR

Note 10 - Changes in Long-term Liabilities ................................................................................................... 154 Note 11 - Interfund Balances and Transfers ................................................................................................... 156 Note 12 - Risk Management ........................................................................................................................... 161 Note 13 - Florida Prepaid College Program ................................................................................................... 163 Note 14 - Insurance Enterprises...................................................................................................................... 164 Note 15 - Contingencies ................................................................................................................................. 168 Note 16 - Litigation ........................................................................................................................................ 170 Note 17 - Deficit Fund Balance and Net Position .......................................................................................... 172 Note 18 - Subsequent Events.......................................................................................................................... 173

OTHER REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules - General and Major Special Revenue Funds............................................... 176 Budget to GAAP Reconciliation ? General and Major Special Revenue Funds................................................. 181 Budgetary Reporting ........................................................................................................................................... 182 Schedule of Proportionate Share and Schedule of State Contributions Florida Retirement System - Pension ............................................................................................................... 184 Schedule of Proportionate Share and Schedule of State Contributions Retiree Health Insurance Subsidy Program - Pension...................................................................................... 185 Schedule of Changes in Net Pension Liability and Schedule of State Contributions ? Florida National Guard Supplemental Retirement Benefit Plan ...................................................................... 186 Schedule of Changes in Other Postemployment Benefits Liability .................................................................... 187 Information About Infrastructure Assets Reported Using the Modified Approach............................................. 188

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES - NONMAJOR FUNDS

Governmental Funds

Fund Descriptions........................................................................................................................................... 193 Combining Balance Sheet............................................................................................................................... 194 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...................................... 195

Special Revenue Funds Fund Descriptions........................................................................................................................................... 197 Combining Balance Sheet............................................................................................................................... 198 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...................................... 204 Budgetary Comparison Schedules.................................................................................................................. 209

Capital Projects Funds Fund Descriptions........................................................................................................................................... 225 Combining Balance Sheet............................................................................................................................... 226 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...................................... 227

Proprietary Funds

Enterprise Funds Fund Descriptions........................................................................................................................................... 229 Combining Statement of Net Position ............................................................................................................ 230 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position....................................... 231 Combining Statement of Cash Flows ............................................................................................................. 232

Internal Service Funds Fund Descriptions........................................................................................................................................... 235 Combining Statement of Net Position ............................................................................................................ 236 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position....................................... 237 Combining Statement of Cash Flows ............................................................................................................. 238

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2018 STATE OF FLORIDA CAFR

Fiduciary Funds Private-purpose Trust Funds Fund Descriptions........................................................................................................................................... 243 Combining Statement of Fiduciary Net Position............................................................................................ 244 Combining Statement of Changes in Fiduciary Net Position......................................................................... 246 Pension and Other Employee Benefits Trust Funds Fund Descriptions........................................................................................................................................... 249 Combining Statement of Fiduciary Net Position............................................................................................ 250 Combining Statement of Changes in Fiduciary Net Position......................................................................... 252 Investment Trust Funds Fund Descriptions........................................................................................................................................... 255 Combining Statement of Fiduciary Net Position............................................................................................ 256 Combining Statement of Changes in Fiduciary Net Position......................................................................... 257 Agency Funds Fund Descriptions........................................................................................................................................... 259 Combining Statement of Fiduciary Net Position............................................................................................ 261 Combining Statement of Changes in Assets and Liabilities........................................................................... 262

Component Units Component Unit Descriptions ........................................................................................................................ 265 Combining Statement of Net Position ............................................................................................................ 267 Combining Statement of Activities................................................................................................................. 268

STATISTICAL SECTION

Table of Contents...................................................................................................................................................... 273 Schedule A-1 Net Position by Component............................................................................................................ 274 Schedule A-2 Changes in Net Position ................................................................................................................. 276 Schedule A-3 Fund Balances - Governmental Funds............................................................................................ 280 Schedule A-4 Changes in Fund Balances - Governmental Funds......................................................................... 282 Schedule B-1 Revenue Base/Rate ......................................................................................................................... 284 Schedule B-2 Principal Sales Tax Payers by Industry .......................................................................................... 286 Schedule C-1 Ratios of Outstanding Debt by Type .............................................................................................. 288 Schedule C-2 Ratios of Net General Bonded Debt Outstanding .......................................................................... 290 Schedule C-3 Legal Debt Margin.......................................................................................................................... 291 Schedule C-4 Pledged-Revenue Coverage............................................................................................................ 292 Schedule D-1 Demographic and Economic Statistics........................................................................................... 298 Schedule D-2 Industry Sector Employment.......................................................................................................... 300 Schedule E-1 Full-Time Equivalent State Employees by Function ...................................................................... 302 Schedule E-2 Operating Indicators by Function ................................................................................................... 304 Schedule E-3 Capital Assets by Function ............................................................................................................. 306

4

INTRODUCTORY SECTION

February 8, 2019

Citizens of the State of Florida The Honorable Ron DeSantis, Governor The Honorable Bill Galvano, President of the Senate The Honorable Jose R. Oliva, Speaker of the House of Representatives

To the Citizens of Florida, Governor DeSantis, President Galvano, and Speaker Oliva:

I am pleased to submit the State of Florida's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018, in accordance with Section 216.102(3), Florida Statutes (F.S.). This report is prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board.

Management assumes full responsibility for the completeness and reliability of the information contained in this report based upon a comprehensive framework of internal control. The objective of internal control is to provide reasonable, rather than absolute, assurance that the financial statements are free of material misstatements. The concept of reasonable assurance ensures that the costs do not exceed the benefits derived.

The Auditor General has issued an opinion on the state's financial statements for the fiscal year ended June 30, 2018. The independent auditor's report is located at the front of the financial section of this report.

Management's Discussion and Analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it.

PROFILE OF THE STATE

Florida's Constitution divides the governmental structure of the state into three independent branches. The Legislative Branch has exclusive lawmaking power for the state. The Executive Branch, consisting of the Governor, Cabinet, and their agencies, administers the laws made by the Legislature. The Governor shares executive power and responsibility with the Cabinet, which is composed of the Attorney General, Chief Financial Officer, and Commissioner of Agriculture. The Judicial Branch interprets the law and applies the Constitution. The organizational chart following this letter provides an overview of the state's structure. Florida's government provides a range of services to its citizens including education, health and family services, transportation, public safety, law and corrections, natural resources and environmental protection.

The financial reporting entity of the state includes the primary government as well as component units for which the state is either financially accountable or a relationship exists with the state such that exclusion would cause the financial statements to be misleading. Refer to Note 1 to the financial statements for a listing of Florida's component units and the Financial Section of the report to obtain an overview of their financial positions.

DEPARTMENT OF FINANCIAL SERVICES THE CAPITOL, TALLAHASSEE, FLORIDA 32399-0301 ? (850) 413-2850 ? FAX (850) 413-2950

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