Joint Audit & Finance and Compensation - Enterprise Florida

165 Pages·2013·9.35 MB·English

Enterprise Florida, Inc.
Joint Meeting of the Audit and
Finance and Compensation
Committees
October 30, 2013
10:00 am – 11:30 am EST
800 North Magnolia Avenue, Suite 1100
Orlando, Florida 32803
407.956.5600
eflorida.com
ENTERPRISE FLORIDA, INC.
AUDIT AND FINANCE & COMPENSATION COMMITTEE MEMBERS

Marshall Criser III, Chair Ernie Diaz
State President-Florida Regional President
150 W. Flagler Street TD Bank
Suite 1901 255 Alhambra Circle, Second Floor
Miami, FL 33130 Coral Gables, FL 33134
Phone: [phone] Phone: [phone]
E-mail: [email protected] E-mail: [email protected]

Gordon Gillette Deb Millen
President Regional Manager, Florida
TECO Energy 6923 Pine Valley Street
702 N. Franklin Street Bradenton, FL 34202
Tampa, FL 33602 Phone: [phone]
Phone: [phone] E-mail: [email protected]
E-mail: [email protected]

Elizabeth Walker (ex-officio) Alan Becker, Chair
Public-Private Partnership Liaison Founding Shareholder
Department of Economic Opportunities Becker & Poliakoff, P.A.
Division of Strategic Business Development 3111 Stirling Road
107 East Madison Street Fort Lauderdale, FL 33312
MSC Center 80 Phone: [phone]
Caldwell Building E-mail: [email protected]
Tallahassee, Florida 32399-0001
Phone: [phone]
E-mail: [email protected]

Howard Halle Bob McAdam
Executive Vice President, Florida Senior Vice President, Government Relations
Wells Fargo Bank Darden Restaurants
1 Independent Drive 1000 Darden Center Drive
25th Floor, Suite 2500 Orlando, FL 32837
Jacksonville, FL 32202 Phone: [phone]
Phone: [phone] E-mail: [email protected]
E-mail: [email protected]

Gene Schaefer
President-Miami
Bank of America, N.A.
701 Brickell Avenue, 8th Floor
Miami, FL 33131
Phone: [phone]
E-mail: [email protected]

Staff Contacts

Louis Laubscher Pamela Murphy
SVP Administration Vice President, Finance and Accounting
Phone: [phone] Phone: [phone]
E-mail: [email protected] E-mail: [email protected]
Enterprise Florida Board of Directors

Joint Meeting of the Audit and Finance and Compensation Committees
October 30, 2013 10:00 am – 11:30 am EST

A meeting at:
The Biltmore Hotel Call in number: 1-800-501-8979
DEERING Meeting Room Access code: 9565644#
1200 Anastasia Avenue
Coral Gables, FL 33134

Presiding Officer: Marshall Criser, Chair, Audit Committee

Audit Committee members:
 Marshall Criser  Ernie Diaz
 Gordon Gillette  Elizabeth Walker

Finance and Compensation members:
 Alan Becker, Chair  Howard Halle
 Bob McAdam  Gene Schaefer
 Hal Melton (Expanded)  Brett Couch (Expanded)

Others present:
 Ron Conrad, Partner Cherry Bekaert, LLP
 Debbie Brannon, Partner Geller, Ragans, James, Oppenheimer & Creel
 Kristin Bivona, Partner Geller, Ragans, James, Oppenheimer & Creel
 Kathy Thomas-Beck, Partner McGladrey
 Jill Reyes, Manager McGladrey

The purpose of the meeting is to approve the audited financial statements for Enterprise Florida, Inc. and hold Executive
Session with the external audit firms.

 Roll Call and Sunshine Notice Pamela Murphy (I)
 Minutes for November 8, 2012 Audit Committee meeting Tab 1 Marshall Criser (I/D/A)
 Review auditor’s letter to the committee from Cherry Bekaert, LLP Tab 2 Ron Conrad (I/D)
 Presentation of Financial Statement Audit Results for the Year Ending Tab 3 Ron Conrad (I/D)
June 30, 2013
Tab 4
 Review auditor’s letter to the committee from Geller, Ragans, James, Tab 5 Debbie Brannon,
Oppenheimer & Creel Kristin Bivona (I/D)
 Presentation of 2012 Retirement Savings Plan Audit Tab 6 Debbie Brannon,
Kristin Bivona (I/D)

800 North Magnolia Avenue, Suite 1100 ▪ Orlando, Florida 32803 ▪ T 407.956.5600
Enterprise Florida Board of Directors

Joint Meeting of the Audit and Finance and Compensation Committees
October 30, 2013 10:00 am – 11:30 am EST

 Presentation of Records Retention and Management Report Tab 7 Kathy Thomas-Beck,
Jill Reyes (I/D)
 Presentation of Form 990 Return of Organization Exempt from Income Tab 8 Ron Conrad (I/D)
Tax – DRAFT
 PUBLIC COMMENT Marshall Criser (I/D)
 ACTION ITEMS: Marshall Criser (I/D/A)
o Approve audited financial statements for the fiscal year ending Tab 4
June 30, 2013
o Approve audited financial statements for the retirement savings Tab 6
plan for calendar year 2012
o Approve Records Retention and Management Report Tab 7
o Approve Form 990 Return of Organization Exempt from Income Tab 8
Tax – DRAFT
 Executive Session Marshall Criser (I/D)
 Other Business Marshall Criser
 Adjourn

800 North Magnolia Avenue, Suite 1100 ▪ Orlando, Florida 32803 ▪ T 407.956.5600
Minutes
Auditor’s Letter to Committee
Cherry Bekaert, LLP
Financial Statement
Audit Results
EFI Audited Financial
Statements
Auditor’s Letter to Committee
Geller, Ragans, James,
Oppenheimer & Creel
401K Audited Financial
Statements
Records Retention Internal
Audit Report & Policy
EFI Form 990 Return of
Organization Exempt from
Income Tax - DRAFT
DRAFT Minutes of a Joint Meeting of the Audit and Finance and Compensation
Committees

A joint meeting of the Enterprise Florida, Inc. (EFI) Audit and Finance and Compensation
Committees was held on November 8, 2012, at the Rosen Shingle Creek Hotel in Orlando,
Florida.

Audit Committee Members Present
Marshall Criser, Chair Kevin Gillen
Gordon Gillette Elizabeth Walker

Finance and Compensation Committee Members Present
Alan Becker, Chair Howard Halle
Bob McAdam Gene Schaefer
Hal Melton

Staff
Sharon Blake Charlotte Cowen
Al Latimer Louis Laubscher
Michele Miller Pamela Murphy
Griff Salmon Gray Swoope
John Webb

Others Attendees
Ron Conrad Cherry, Bekaert & Holland, LLP
Dan Gougherty Cherry, Bekaert & Holland, LLP
Frank Kubicki Cherry, Bekaert & Holland, LLP
Debbie Brannon Geller, Ragans, James, Oppenheimer & Creel
Kristin Bivona Geller, Ragans, James, Oppenheimer & Creel
Kathy Thomas-Beck McGladrey
Jill Reyes McGladrey

Agenda
I. Minutes for April 12, 2012 Audit Committee meeting
II. Review and approve interim unaudited statements for the quarter ending
September 30, 2012
III. Review and approve the financial statements audit results for the fiscal year ending
June 30, 2012 and auditor’s letter to the committee
IV. Review and approve the audited financial statements for the retirement savings plan for
calendar year 2011, management letter, and auditor’s letter to the committee
V. Review the Florida Sports Foundation Risk Assessment internal audit
VI. Review and approve updates to the Salary and Bonus Guidelines
VII. Review quarterly match report
VIII. Review FY 2012/13 contract with the Department of Economic Opportunity
IX. Executive Session

A quorum being present, Alan Becker called the meeting to order at 2:07 p.m.

Page 1 of 4
Approve minutes of April 12, 2012 meeting

Motion: Approve the minutes of the April 12, 2012 Audit Committee.

Motion: Mr. Kevin Gillen
Second: Mr. Howard Halle

The motion passed unanimously.

Review and approve interim unaudited statements for the quarter ending September 30,
2012

Pamela Murphy reported that overall the financial statements looked good through the end of the
first quarter. She reported that the largest decrease to cash and escrow payable were for funds
returned to the state and the increase to accounts receivable was related to the loans receivable
under the State Small Business Credit Initiative (“SSBCI”) program.

Ms. Murphy reported that corporate contributions appeared to be behind budget but that was
related to the timing of the renewals for the corporate investors which were heavy in the third and
fourth quarters of the year. She reported that expenses were largely under budget with the
largest variance in the trade show line. She also explained the schedule of administered grants
and pass-throughs.

Motion: Approve the interim unaudited financial statements for the quarter ending
September 30, 2012

Motion: Mr. Bob McAdam
Second: Mr. Kevin Gillen

Review and approve the financial statements audit results for the fiscal year ending June
30, 2012 and the auditor’s letter to the committee

Ron Conrad presented the audited financial statements for the year ending June 30, 2012. He
reported that there were significant disclosures related to the SSBCI program, the mergers of the
Florida Sports Foundation and Florida Black Business Investment Board, and the federal and
state single audits. He reported that there was an unqualified opinion and no internal or
compliance matters, other than the match deficiency.

Gray Swoope explained that a 100% match from private sector is unrealistic without an in-kind
component. Hal Melton notes that EFI had done well in all areas that they could control. Louis
Laubscher explained that the Executive Committee had asked for a legislative fix but with the
changes in legislation, it was not the right time to propose such a change.

Ron Conrad explained that the financial statements were consolidated and included the Cypress
Equity Fund Management Corporation, Florida Opportunity Fund, and Florida Sports Foundation.
He also highlighted several of the note disclosures in the financial statements, including the use
of estimates in valuing the Florida Opportunity Fund investments, Escrow Payables, and mergers.

Motion: Approve the audited financial statements for the fiscal year ending June 30, 2012

Motion: Mr. Kevin Gillen
Second: Mr. Bob McAdam

Page 2 of 4
Review and approve the audited financial statements for the retirement savings plan for
calendar year 2011, management’s letter, and the auditor’s letter to the committee

Debbie Brannon reported that they performed a limited scope audit of the retirement savings plan
meaning that the Department of Labor did not require them to audit the investments. She
reported that the majority of the testing involved general planning, internal control, and participant
eligibility and that there were no internal control deficiencies and no findings or disagreements
with management. She explained that the market was not as kind to the plan but that the
contributions were constant and that there were several large distributions which explained the
decrease in the plan assets.

Louis Laubscher stated that EFI had hired Fiduciary First to review the assets, fund watch lists,
and required communications. They also performed a fund by fund analysis on at least a
quarterly basis. He also stated that management had completed a blind RFP to ensure that fees
were low and that the Principal Financial Group was meeting standards.

Motion: Approve the audited financial statements for the retirement savings plan for
calendar year 2011

Motion: Mr. Gordon Gillette
Second: Mr. Kevin Gillen

Review the Florida Sports Foundation Risk Assessment

Kathy Thomas-Beck stated that the audit was a high level risk assessment, not a detailed audit,
to see what the risks were and to evaluate any exposure for EFI from the Florida Sports
Foundation. Jill Reyes stated that they worked with management to evaluate any exposure and
conducted walk-throughs of the processes to obtain an understanding of the entity.

Ms. Reyes stated that their recommendations included segregation of duties, which as of the date
of the audit had not been migrated to EFI’s system. She stated that these risks were inherent to
any size organization, and not just for Florida Sports Foundation.

In response to Kevin Gillen’s questions about integrating the accounting system, Pamela Murphy
replied that the migration would be complete by January 1st. Jill Reyes stated that this would
close the control gap once they moved to EFI’s system.

Kevin Gillen asked about the Florida Sport Foundation’s revenue source, if EFI had looked at
these other organizations that were part of EFI for match purposes, and if any staff had been
eliminated. Louis Laubscher replied that their primary revenue source was state license tag fees,
that they had been included in the match reporting, and that no staff had been eliminated.

Review and approve the updates to the Salary and Bonus Guidelines

Louis Laubscher stated that management had worked to simply the process, addresses grading
inconsistencies, and changes the grading system from a 5-point system to a 4-point system with
a 3 as the standard. The system would be available to all employees who had been employed for
at least six months. He stated that a separate pool of funds would be available for the top
performers which would be approved by Griff Salmon and Gray Swoope. These individuals
would receive an additional 6% of compensation.

Griff Salmon explained that the revised form would be used as an effective management tool to
set goals and not penalize staff for not meeting stretch goals. He stated that there is still a 30%
of corporate contributions limitation if EFI raises less than one million per year which would be
adequate to cover the incentive compensation pool without a reduction to staff.
Page 3 of 4
Motion: Approve the updates to the Salary and Bonus Guidelines as a pilot program for
fiscal year 2012/13.

Motion: Mr. Alan Becker
Second: Mr. Bob McAdam

Review quarterly match report

Pamela Murphy reported that the match report for the quarter ending September 30, 2012 had
been provided as an information item.

Review FY 2012/13 contract with the Department of Economic Opportunity

Louis Laubscher reported that the FY 2012/13 contract with the Department of Economic
Opportunity had been provided as an information item.

Executive session with audit firms

The Committees held an executive session with the auditors for the purpose of discussing any
internal control or audit related issues. EFI staff excused themselves from the room during this
time.

Marshall Criser suggested that it would be helpful to have a workshop to discuss the overall audit
plan and scope of resources, internal and external. He suggested an updated risk assessment to
encompass the Florida Sports Foundation and an overview of the Florida Opportunity Fund.

There being no additional business, the meeting was adjourned at 5:00 p.m.
Page 4 of 4
September 24, 2013

To the Audit Committee of the Board of Directors of
Enterprise Florida, Inc.
Orlando, Florida

Dear Members:

We have audited the consolidated financial statements of Enterprise Florida, Inc. and consolidated entities (the
“Organization”), for the year ended June 30, 2013, and have issued our report thereon dated September 24, 2013.
Professional standards require that we provide you with information about our responsibilities under generally
accepted auditing standards, Government Auditing Standards, OMB Circular A-133, and Chapter 10.650 Rules of the
Auditor General, as well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our letter to you dated January 8, 2013. Professional standards also require that
we communicate to you the following information related to our audit.
Significant Audit Findings  
Qualitative Aspects of Accounting Practices 
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by the Organization are described in Note 1 to the financial statements. The application of existing
policies was not changed during 2013; however, the Organization implemented the Accounting Standards Update
2011-04, Fair Value Measurement. The impact of this standard was to provide additional disclosures. We noted no
transactions entered into by the Organization during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management’s knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected. The most
sensitive estimates affecting the Organization’s financial statements were:
Management’s estimate of the value of fund of fund investments, which are based on net assets fair value
information provided by investment advisors.

Management’s estimate of the value of direct investments, which are based on information provided by the
investment manager of the direct investments.

Management’s estimate of the useful life of fixed assets, which are based on management’s analysis of the
asset’s life expectancy.

We evaluated the key factors and assumptions used to develop these estimates to determine that they seem
reasonable in relation to the financial statements taken as a whole. While the procedures used by management and
the amount of these estimates seem reasonable at this time, there will usually be differences between the estimates
and actual results and these differences may be material.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.