East Charlotte Drainage District Punta Gorda, Florida

General Purpose Financial Statements For the Year Ended September 30, 2021

BodinePerry
Certified Public Accountants & Advisors

Table of Contents
Table of Contents	i
Independent Auditors’ Report	A1
Management's Discussion and Analysis	M1
Basic Financial Statements
Statement of Net Position	1
Statement of Activities	2
Governmental Fund Financial Statements
Balance Sheet	3
Reconciliation of the Governmental Fund
Balance Sheet to the Statement of Net Position	4
Statement of Revenues, Expenditures, and
Changes in Fund Balances Governmental Fund	5
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of the Governmental Fund to the Statement
of Activities	6
Notes to Basic Financial Statements	7

Required Supplementary Information
Budgetary Comparison Schedule - General Fund	16
Other Reports and Management Letter
Independent Auditors’ 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 Auditors’ Report on Compliance
with Section 218.415, Florida Statutes	22

Independent Auditors’ Report

Honorable Board of Supervisors East Charlotte Drainage District Punta Gorda, Florida

Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities of the East Charlotte Drainage District (the "District") as of and for the fiscal year ended September 30, 2021 and related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the Table of Contents.

Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

AA13

A1

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities of the East Charlotte Drainage District as of September 30, 2021 and the respective changes in financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages M1 through M5 and 16-17 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with 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 assurance.

Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 10,2022, on our consideration of the East Charlotte Drainage District’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 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 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 East Charlotte Drainage District’s internal control over financial reporting and compliance.

Bodine Perry PLLC Zephyrhills, Florida June 10, 2022

Management’s Discussion and Analysis

The management of East Charlotte Drainage District (the "District") would like to offer the readers of the District's financial statements this discussion and analysis of the District's financial activities during the fiscal year ended September 30, 2021. We encourage readers to consider the information presented in this discussion and analysis in conjunction with the District's financial statements, which follow this section.

Financial Highlights

The assets of the District exceeded its liabilities at the end of the fiscal year ended September 30, 2021 by $886,969.

The District's total net position increased by $31,453.

The District's total revenues were $208,660 for the fiscal year ended September 30, 2021.

Total expenses for all of the District's activities were $177,207 for the fiscal year.

Using This Annual Report
This discussion and analysis is intended to serve as an introduction to East Charlotte Drainage District’s basic financial statements. The District's annual report consists of three parts: management's discussion and analysis (this section), the basic financial statements, and required supplementary information. The basic financial statements themselves consist of three components: government-wide financial statements, fund financial statements, and notes to the basic financial statements. These statements present different views of the District:

The first two statements are government-wide financial statements that provide both long-term and short-term information about the District's overall financial status.

The fund financial statements focus on individual parts of the District's government, reporting the District's operations on a different basis of accounting than the government-wide statements.

The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements.

M1

	Management's Discussion and Analysis		
	Basic Financial Statements Summary		
			
Government-wide Financial Statements	Fund Financial Statements	Notes to the Financial Statements	

Required Supplementary Information

Government-wide Financial Statements
The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the District's assets and liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

One of the most important questions asked about the District's finances is "Is the District as a whole better off or worse off as a result of the year's activities?" The statement of net position and the statement of activities report information about the District as a whole and about its activities in a way that helps answer this question.

The statement of net position presents information on all of the District's assets and liabilities, with the difference between the two 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 District is improving or deteriorating. Other non-financial factors should be considered, however, such as the condition of the District's capital assets (equipment, lift pumps, etc.) to assess the overall health of the District.

The statement of activities presents information showing how the government's net position changed during the 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 flow in future fiscal periods.

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 District, like state and local governments, uses fund accounting to ensure and demonstrate legal compliance with finance-related legal requirements. The District has one fund, a governmental fund.

The District's basic services are reported in a governmental fund, which focuses on how money flows into and out of that fund and the balances left at year-end that are available for spending. This fund is reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a short- term view of the District's general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. The differences between government-wide activities (reported in the statement of net position and the statement of activities) and the governmental fund are reconciled on separate schedules on Pages 4 and 6.

Financial Analysis of the District as a Whole
Assets exceeded liabilities by $886,969 for the fiscal year ended September 30, 2021 and is reported as net position.

The District uses capital assets to provide services to its landowners; accordingly, these assets are not available for future spending.

	Pe rce nta g e	
	2021		2020		Cha ng e	

Current and Other Assets	
$	79,000		
$	56,386		
40.11%	
Capital Assets, Net of Accumulated Depreciation	827,275		861,433		-3.97%	
T o ta l Asse ts	906,275		917,819		-1.26%	

Current Liabilities	
19,306		
62,303		
-69.01%	
Noncurrent Liabilities	-		-		0.00%	
T o ta l Lia b ilitie s	19,306		62,303		-69.01%	

Ne t Po sitio n						
Invested in Capital Assets, Net of Related Debt	827,275		807,950		2.39%	
Unrestricted	59,694		47,566		25.50%	
T o ta l Ne t Po sitio n	$	886,969		$	855,516		3.68%	

Ea st Cha rlo tte Dra ina g e District' s Ne t Po sitio n Se p te mb e r 30,

East Charlotte Drainage District's Changes in Net Position September 30, 2021

Re ve nue s

2021	2020

Pe rce nta g e Cha ng e

Program Revenues		
Charges for Services	$	206,030		$	183,102		12.52%	
General Revenues						
Miscellaneous	2,526		4,116		-38.63%	
Investment	104		86		20.93%	
Total Revenues	208,660		187,304		11.40%	
Exp e nse s
General Government						
Physical Environment	177,207		153,921		15.13%	
Interest on Long-Term Debt	-		4,098		-100.00%	
Total Expenses	177,207		158,019		12.14%	
Increase (Decrease) in Net Position	31,453		29,285		7.40%	
Ne t Po s itio n - Be g inning o f Ye a r	855,516		826,231		3.54%	

Ne t Po s itio n - End o f Ye a r	
$	886,969		
$	855,516		
3.68%	

Other Information-Information Required by Section 218.39(3)(c), Florida Statutes and Section 10.554(1)(i)6, Rules of the Auditor General (unaudited):

Element	Comments
Number of district employees compensated at 9/30/2021	0	
Number of independent contractors compensated in September
2021	2	
Employee compensation for FYE 9/30/2021 (paid/accrued)	Not applicable	
Independent contractor compensation for FYE 9/30/2021	$4,771	
Construction projects to begin on or after October 1; (>$65K)	Not applicable	
Budget variance report	See Variance Report in report for details	
Ad Valorem taxes;	Not applicable	
Millage rate FYE 9/30/20XX	Not applicable	
Ad valorem taxes collected FYE 9/30/2021	Not applicable	
Outstanding Bonds:	Not applicable	
		
Non ad valorem special assessments;		
Special assessment rate FYE 9/30/2021	Ranges From $60.72 To $69.43 Per Acre	
Special assessments collected FYE 9/30/2021	$206,030	
Outstanding Bonds:	Not applicable	

Fund Analysis
The maintenance tax increased from the 2019/2020 fiscal year to the 2020/2021 fiscal year, while the Capital Unit 1 tax and Capital Unit 2 tax decreased, and the Shells Road maintenance tax was unchanged. See budgetary highlights for more detailed data.

Budgetary Highlights
The District adopted the fiscal year 2020/2021 budget on July 1, 2020, with the following assessments per acre: Maintenance $45.88; Capital Unit 1 $11.95; Capital Unit 2 $11.60; Shell Roads Maintenance $2.89. Total expenditures budgeted for the fiscal year ended September 30, 2021 were $248,089. The budgeted non-ad valorem assessment revenues were $215,136 with remaining revenues to come from miscellaneous receivables and estimated carry-over.

Capital Assets
The following summarizes the District's capital assets and accumulated depreciation for the fiscal year ended September 30, 2021:

Go ve rnme nta l
	Activitie s	

Land	$	21,084	
Land Improvements	51,500	
Machinery and Equipment	19,954	
Culverts	313,062	
Roads	1,213,220	
	$	1,618,820	

Less Accumulated Depreciation	
(791,545)	
T o ta ls	$	827,275	

Debt
The District, on September 14, 2006, entered into a loan agreement with a financial institution in the amount of $1,250,000. The purpose of this borrowing was to finance the road paving project. This loan was refinanced on July 14, 2013, with a principal balance of $618,153. Principal and interest are payable monthly in the amount of $7,742, commencing on August 14, 2013, with the final payment of $7,742 due on April 14, 2021. The interest rate is fixed at 4% per annum. This debt was paid off on April 14, 2021.

Contacting the District's Financial Management
This financial report is designed to provide our readers with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the East Charlotte Drainage District's management services at Special District Services, Inc., 2501A Burns Road, Palm Beach Gardens, FL 33410.

Basic Financial Statements
The basic financial statements include the government-wide financial statements, fund financial statements, and notes to the basic financial statements. The government-wide financial statements present financial information about the reporting government as a whole. The fund financial statements present financial information about major funds individually. The notes to the basic financial statements present information essential for the fair presentation of the financial statements that are not displayed on the face of the financial statements.

Asse ts	2021	
Current Assets
Cash	
$	76,255	
Accts Receivable - Other	2,745	

Total Current Assets	79,000

Non-Current Assets
Capital Assets not being depreciated	21,084
Capital Assets being depreciated, Net	806,191 Total Non-Current Assets	827,275
T o ta l Asse ts	906,275

Lia b ilitie s
Current Liabilities
Accrued Liability	19,306
Current Portion of Notes Payable	-

Total Current Liabilities	19,306

Non-Current Liabilities
Non-Current Portion of Notes Payable	-
Total Non-Current Liabilities	-

T o ta l Lia b ilitie s	19,306

Ne t Po sitio n

Invested in Capital Assets, Net of Related Debt	827,275	
Unrestricted	59,694	
Total Net Position	886,969	
T o ta l Lia b ilitie s a nd Ne t Po sitio n	$	906,275	

Function/Program Activities		

Expenses		Program Revenues Charges for
Services		Net (Expense) Revenue and Changes in Net
Position	
Go ve rnme nta l Activitie s							
Physical Environment		$	(176,403)		$	206,030		$	29,627	
Interest on Long-Term Debt		(804)		-		(804)	
Total Governmental Activities		$	(177,207)		$	206,030		$	28,823	
		
Ge ne ra l Re ve nue s					
		Miscellaneous				2,526	
		Interest Earnings				104	
Total General Revenues	
2,630	

Change in Net Position	
31,453	
Ne t Po sitio n, Be g inning o f Ye a r	855,516	
Ne t Po sitio n, End o f Ye a r	
$	886,969	

Asse ts

Cash	$	76,255	
Accts Receivable - Other	2,745	
Total Assets	$	79,000	

Lia b ilitie s a nd Fund Ba la nce Liabilities
Accrued Liability	$	19,306
Total Liabilities	19,306

Fund Balance

Unassigned	59,694

Total Liabilities and Fund Balance	$

79,000

T o ta l Go ve rnme nt Fund Ba la nce (Pa g e 3)	$	59,694

Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Cost of Assets	$	1,618,820		
Less accumulated depreciation	(791,545)	827,275	

Long-term liabilities are not due and payable in the current period and, therefore, are not reported
in the governmental funds. As of September 30, 2021, long-term liabilities are comprised of the following:

Loan Payable	-

T o ta l Ne t Po sitio n (Pa g e 1)	$	886,969

Re ve nue s		
Non-Ad Valorem Assessments	$	206,030	
Charges for Services	-	
Miscellaneous	2,526	
Interest Income	104	
Total Revenues	208,660	
Exp e nd iture s
Current		
Physical Environment		
Operating Expense	142,593	
Capital Outlay	-	
Debt Service		
Principal	53,135	
Interest	804	
Total Expenditures	196,532	

Net Change in Fund Balance	
12,128	
Fund Ba la nce , Be g inning o f Ye a r	47,566	

Fund Ba la nce , End o f Ye a r	
$	59,694	

For the Year Ended September 30, 2021

Net Change in Fund Balances - Total Governmental Fund (Page 5)	$	12,128

Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental fund reports capital outlay as expenditures. However, in the Statement of Activities, the cost of capital assets are allocated over their estimated useful life and reported as depreciation expense. Additionally, dispositions of capital assets have different effects on the two statements as well. These differences are as follows:

Capital Outlay	20,770
Depreciation Expense	(54,580)

Principal payments on long-term debt is reported as an expenditure on the Statement of Revenues, Expenditures, and Changes in Fund Balance, however, it has no effect on
Net Position	53,135

Change in Net Position (Page 2)	$	31,453

NOTE 1 - Summary of Significant Accounting Policies

East Charlotte Drainage District (the "District") was originally incorporated and created under Chapter 65- 664 of the laws of the State of Florida on June 25, 1965. The District was created for the purpose of reclaiming the lands within its boundaries and for the further purpose of water control and water supply to improve said lands and make these lands available, acceptable and habitable for settlement and agriculture.

The District is administered by a three-member Board of Supervisors (the "Board"), composed of owners of land in the District. The supervisors are each elected to a three-year term. Length of service is staggered so that one supervisor is elected or re-elected at the annual landowners meeting in July.

The accounting policies of the District conform to generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of these accounting policies are summarized below.

Defining the Financial Reporting Entity
In accordance with Governmental Accounting Standards Board Statement Number 14, the financial reporting entity includes the primary government, organizations for which the primary government is financially accountable and other organizations which, if excluded, would cause the reporting entity’s financial statements to be misleading or incomplete. Financial accountability is defined as the appointment of a voting majority to an organization’s board and, either displays the ability to impose its will on that organization, or the possibility that the organization will impose or provide a financial burden or benefit to the primary government.

The District has no such organizations to include.

Governmental Accounting Standards Board Statement Number 34, “Basic Financial Statements - and
Management’s Discussion and Analysis - for State and Local Governments”
The District implemented the provisions of Statement Number 34 for the fiscal year ending September 30, 2004 which established new financial reporting requirements for state and local governments. The Statement established specific standards for the basic financial statements, management’s discussion and analysis (MD&A), and certain required supplementary information. As part of this Statement, there is a reporting requirement regarding infrastructure (land, buildings, and equipment etc.). All major general assets that were acquired or significantly reconstructed, or that received significant improvements, in fiscal years ending after June 30, 1980 were required to be retroactively reported and all newly acquired or improved infrastructure assets must be prospectively reported effective as of the date of implementation of this statement.

Note 1 - Summary of Significant Accounting Policies (continued)

The basic financial statements include both government-wide and fund financial statements. The government-wide statements are presented using a full accrual, economic resource basis, which incorporates long-term assets and receivables and long-term liabilities. Governmental activities include the General Fund. The District has no business-type activities.

The government-wide Statement of Activities reports the gross and net cost for the basic services of the District that is otherwise supported by general government revenue. The expenses for the category are reduced by program revenues to ascertain the net costs for that function. Program revenues are defined as charges for services, operating grants and capital grants that specifically relate to a specific program function. Charges for services include revenues arising from charges to customers or applicants who purchase, use, or directly benefit from the goods, services, or privileges provided. Operating grants and capital grants consist of revenues received from other governments, organizations, or individuals that are specifically attributable to a program and are restricted for either operating expenditures/expenses or capital expenditures/expenses associated with a specific program.

The fund financial statements are very similar to the financial statements presented in the previous model. The emphasis in the new model is on major funds. All funds maintained by the District are considered major funds in accordance with the new reporting model requirements.

Measurement Focus
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental fund statements are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. The measurement focus is the determination of financial position and sources and uses of resources, rather than net income determination.

Note 1 - Summary of Significant Accounting Policies (Continued)

Fund Accounting
The District organizes its accounting system on the basis of funds.

Governmental General Fund
The General Fund accounts for the general activities of the East Charlotte Drainage District and finances those activities not otherwise designated to be recorded and financed separately.

Basis of Accounting
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements.

The government-wide financial statements are presented on an accrual basis of accounting. The governmental funds in the fund financial statements are presented on a modified accrual basis of accounting.

Under the modified accrual basis, revenues are recognized in the accounting period when they become measurable and available (susceptible to accrual). Revenues are generally considered available when they are received in cash (unless legally restricted to some future period) or when earned and expected to be collected soon enough after year-end to pay liabilities of the current period. The District defines the length of time used for “available” for purposes of revenue recognition as 60 days. Revenues that are susceptible to accrual include interest revenue, state revenue sharing entitlements, and intergovernmental grants. Expenditures are recorded at the time the related fund liabilities are incurred. Debt service expenditures are recorded only when payment is due. Under the accrual basis, revenues are recognized in the period when earned and expenses are recognized in the period when incurred.

Deposits and Investments
The District's cash and cash equivalents are considered to be cash on hand, time and demand deposits, and short-term investments with original maturities of less than three months from the date of acquisition.

The nature of investments is governed by the provisions of Florida Statutes Chapter 218. Under this statute, authorized investments are limited, unless otherwise authorized by law or ordinance, to the local government surplus funds trust fund, money market funds, direct or unconditionally guaranteed obligations of the United States Government, obligations of certain government agencies, interest bearing time deposits or savings accounts and certificates of deposit. At September 30, 2021, the District had no investments.

Note 1 - Summary of Significant Accounting Policies (continued)

Capital Assets and Depreciation
Capital assets, which includes property, plant and equipment, and infrastructure assets (e.g., roads and culverts), are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the District as assets with 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 estimated fair market value at the date of donation.

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

Capital assets of the District are depreciated using the straight-line method over the following estimated useful lives:

Assets	Years

Land Improvements	30	
Machinery and Equipment	5-8	
Culverts	20	
Roads	30	

The District had not elected to retroactively apply the capitalization requirements of GASB Statement No. 34 to major general infrastructure assets acquired since 1980. Infrastructure assets include drainage systems and similar assets that are immovable and of value only to the District.

Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. In the fund financial statements, the face amount of debt issued is reported as another financing source.

Note 1 - Summary of Significant Accounting Policies (continued)

Non-Ad Valorem Assessments
The collection of non-ad valorem assessments is consolidated in the Office of the Charlotte County Tax Collector (the "Tax Collector"). Assessments are levied on November 1st of each year, or as soon thereafter as the tax roll is certified by the Charlotte County Property Appraiser and delivered to the Tax Collector. All unpaid assessments levied become delinquent April 1st of the following year. Discounts are allowed for early payment at a maximum rate of 4%. Non-ad valorem assessment revenues are recognized when they become available. At September 30, 2021, unpaid delinquent assessments are not material and have not been recorded by the District.

Net Position
The government-wide financial statements utilize a net position presentation. Net position is presented in three components - invested in capital assets (net of related debt), restricted, and unrestricted.

Invested in Capital Assets (net of related debt) - This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, notes, or other borrowings attributable to the acquisition, construction, or improvement of those assets. The component does not include the portion of debt attributable to the unspent proceeds.

Restricted - This component consists of net position that has constraints placed on it either externally by third parties (creditors, grantors, and contributors) or by law through constitutional provisions of enabling legislation. The District would typically use restricted assets first, as appropriate opportunities arise, but reserves the right to selectively defer the use of these funds.

Unrestricted - This component consists of net position that does not meet the definition of "invested in capital assets, net of related debt" and "restricted". Designations of net position made by the District's management are included in this component because these types of constraints are internal, and management can remove or modify them.

Note 1 - Summary of Significant Accounting Policies (continued)

Fund Balance
In the fund financial statements, fund balance for governmental funds (general fund and State I fund) is reported in classifications that comprise a hierarchy based primarily on the extent to which the District is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Under GASB 54 requirements, fund balance is reported in five possible components - nonspendable, restricted, committed, assigned, and unassigned.

Nonspendable - This component includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

Restricted - This component includes amounts reported as restricted when constraints placed on the use of the resources are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation.

Committed - This component includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the District's Commissioners. Such amounts cannot be used for any other purpose unless the government removes or changes the specific use by taking the same type of action it employed to previously commit those amounts.

Assigned - This component is used to report the government's intent to use the amount for specific purpose but is neither restricted nor committed.

Unassigned - This component is the residual classification for the general fund. This amount represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund.

When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first and the unrestricted resources (committed, assigned, and unassigned) as they are needed. When unrestricted resources (committed, assigned, and unassigned) are available for use, it is the District's policy to use committed resources first, then assigned, and then unassigned as they are needed.

Note 1 - Summary of Significant Accounting Policies (continued)

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates.

Note 2 - Deposits

In addition to insurance provided by the Federal Depository Insurance Corporation, all deposits are held in banking institutions approved by the State Treasurer of the State of Florida to hold public funds.

This is in compliance with Section 280, Florida Statutes, which provides that in the event of a default by any such bank or savings and loan association, all participating banks and savings and loan associations throughout the State would be obligated to reimburse the District for any loss.

Note 3 - GASB 45

The Governmental Accounting Standards Board has issued Statement No. 45, "Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions (OPEB)." This Statement changes the manner in which a governmental entity funds and records its post-retirement benefit costs other than pensions.

The District has no employees and therefore has no OPEB liability.

Note 4 - Well Operating Agreements

The District executed agreements with four major landowners. Pursuant to the agreements, the landowners will operate and maintain certain wells located within the District and provide irrigation water to other landowners.

Note 5 - Capital Assets

Capital assets activity for the year ended September 30, 2021 was as follows:

Be g inning Ba la nce
10/ 01/ 2020	Ad d itio ns	De le tio ns

End ing Ba la nce
09/ 30/ 2021

Capital Assets not Depreciated:		
Land	$	21,084	$	-	$	-	$	21,084	
Total Capital Assets not Depreciated	
21,084	
-	
-	
21,084	

Capital Assets Depreciated:					
Land Improvements	51,500	-	-	51,500	
Machinery and Equipment	19,954	-	-	19,954	
Culverts	292,292	20,770	-	313,062	
Roads	1,213,220	-	-	1,213,220	
Total Capital Assets Depreciated	
1,576,966	
20,770	
-	
1,597,736	

Less Accumulated Depreciation	
(736,617)	
(54,928)	
-	
(791,545)	

Total Capital Assets depreciated, Net	

840,349	

(34,158)	

-	806,191	

Governmental Activities - Capital Assets Net	

$	861,433	

$	(34,158)	

$	-	$	827,275	

Depreciation expense of $54,616 was charged to Physical Environment for the fiscal year ended September 30, 2021.

Note 6 - Line of Credit

The District, in July 2015, entered into an agreement for a line of credit with a financial institution for
$100,000, this agreement was renewed in July 2020. The line of credit expires in July 2022. Interest on the line of credit is 5.00% per annum. The District did not utilize the line of credit during the fiscal year.

Note 7 - Long-Term Liabilities

The following is a summary of changes in long-term liabilities for the fiscal year September 30, 2021:

10/1/2020	Additions

Principal
Payments	9/30/2021

Due Within One Year

Loan Payable

Loan Payable

$	53,483	$

-	$	53,483	$

.

-	$	-

The District on September 14, 2006, entered into a loan agreement with a financial institution in the amount of $1,250,000. The purpose of this borrowing was to finance the road paving project. This loan was refinanced on July 14, 2014 with a principal balance of $618,153. Principal and interest are payable monthly in the amount of $7,742, commencing on August 14, 2014, with the final payment of $7,742 due on April 14, 2021. The interest rate is fixed at 4% per annum. This note is secured by a lien on and pledge of drainage taxes of the properties benefited by improvements. The outstanding balance as of September 30, 2021 was $0. The note was paid off May 7, 2021.

Note 8 - Risk Management

The District 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 that District carries commercial insurance. The District is also covered by Florida Statutes under the Doctrine of Sovereign Immunity which effectively limits the amount of liability of the District to individual claims of $100,000/$200,000 for all claims relating to the same accident. There were no changes in insurance coverage from the prior year and there were no settlements that exceeded insurance coverage.

Note 9 - Related Party Transactions

Pursuant to the Letter of Agreement between East Charlotte Drainage District and Joshua Water Control District, East Charlotte Drainage District paid Joshua Water Control District $24,000 for management, administrative, and maintenance inspection services. In addition, $8,143 was paid for maintenance services for manpower/equipment time and costs incurred.

In accordance with the Inter-Local Agreement, East Charlotte Drainage District and Joshua Water Control District, Boards of Supervisors have engaged in programs of maintenance of the works of their districts. This agreement is for the period of August 11, 2015 until August 21, 2020 and was extended to September 30, 2022.

Alico, Inc., a landowner within the District, pays the District $1,040 as a user's fee for 80 acres in Section 26.

Other agreements provide that Bermont Drainage District will pay an outside user’s fee of $1,413. Note 10 - Subsequent Events
The District’s management has evaluated events and transactions for potential recognition or disclosure
through June 10, 2022, the date the financial statements were available to be issued.

Re ve nue s

Orig ina l	Fina l	Actua l

Va ria nce with Fina l Bud g e t
Po sitive / (Ne g a tive )

Non-ad Valorem Assessments	$	215,136		$	215,136		$	206,030		$	(9,106)	
Excess Tax Collector Fees	-		-		-			-	
Miscellaneous Income	-		-		2,526			2,526	
Interest Income	-		-		104			104	
Total Revenues	
215,136		
215,136		
208,660			
(6,476)	

Exp e nd iture s

Physical Environment	245,636		245,636		196,532			49,104	

Net Change in Fund Balance	
(30,500)		
(30,500)		
12,128			
42,628	
Fund Ba la nce , Be g inning o f Ye a r	

30,500		

30,500		

47,566			

17,066	

Fund Ba la nce , End o f Ye a r	
$	-		
$	-		
$	59,694		
$	
59,694	

Note 1 - Budgets and Budget Accounting

State of Florida Statutes require that, for each fiscal year, a special district makes appropriations which will not exceed the amount to be received from taxation and other available sources. The District annually adopts an operating budget for the general fund. The procedures for establishing budgetary data are as follows:

In July of each year, at the Annual Landowners' Meeting, the District Manager submits a draft operating budget to the Board for the next fiscal year commencing the following October 1. The proposed budget includes expenditures and the means of financing them. The budget is adopted by the Board.

Budgets are adopted on the modified accrual basis of accounting, consistent with accounting principles generally accepted in the United States. All appropriations lapse at fiscal year end unless encumbered or specifically designated to be carried forward to the subsequent year. Changes or amendments to the total budgeted expenditures of the District must be approved by the Board. Accordingly, the legal level of control is at the fund level.

Independent Auditors’ 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

June 10, 2022

Honorable Board of Supervisors East Charlotte Drainage District Punta Gorda, FL

We have audited, in accordance with the 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 of East Charlotte Drainage District (the "District"), as of and for the year ended September 30, 2021, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated June 10, 2022.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or 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 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.

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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District'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 results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Bodine Perry PLLC Zephyrhills, Florida June 10, 2022

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Management Letter

June 10, 2022

Honorable Board of Supervisors East Charlotte Drainage District Punta Gorda, FL

Report on the Financial Statements
We have audited the financial statements of the East Charlotte Drainage District (the "District") as of and for the fiscal year ended September 30, 2021 and have issued our report thereon dated June 10, 2022.

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

Other Reports and Schedule
We have issued our Independent Auditors’ 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. Disclosures in that report, which are dated June 10, 2022, should be considered in conjunction with this management letter.

Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding annual financial audit report.

Official Title and Legal Authority
Section 10.554(1)(i)2., 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 basic financial statements. The District discloses this information in the notes to the basic financial statements.

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Financial Condition
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the East Charlotte Drainage District 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 District did not meet any of the conditions described in Section 218.503(1), Florida Statutes, during the fiscal year ended September 30, 2021.

Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the East Charlotte Drainage District'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. Our assessment was done as of the fiscal year end. The results of our procedures did not disclose any matters that are required to be reported.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we have no recommendations to improve financial management.

Special District Component Units
Section 10.554(1)(i)5.d., Rules of the Auditor General, requires that we determine whether or not a special district that is a component unit of a county, municipality, or special district, provided financial information necessary for proper reporting of the component unit, within the audited financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we determined that all special district component units provided the necessary information for proper reporting in accordance with Section 218.39(3)(b), Florida Statutes.

Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor General, there are no special district component units of the District; and the District is not a special district component to any other entity.

Other 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.

Management has provided the specific information required by Section 218.39(3)(c) on Page 4 of the Management’s Discussion and Analysis report.

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 Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Bodine Perry PLLC Zephyrhills, Florida June 10, 2022

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Independent Auditors’ Report on Compliance With Section 218.415, Florida Statutes

Honorable Board of Supervisors East Charlotte Drainage District Punta Gorda, Florida

We have examined the East Charlotte Drainage District’s (the "District") compliance with Section 218.415, Florida Statutes regarding the investment of public funds during the period ended September 30, 2021 as required by Section 10.556, Rules of the Auditor General. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination.

Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA) and accordingly, included examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination of the District’s compliance with specified requirements.

In our opinion, the District complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2021.

This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the District, its management, and is not intended to be and should not be used by anyone other than these specified parties. However, this letter is a matter of public record and its distribution is not limited.

Bodine Perry PLLC Zephyrhills, Florida June 10, 2022

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