2023 TDC Audit Reports

Palm Beach County Sports Commission

March 27, 2024

Palm Beach County Sports Commission, Inc.

2195 Southern Boulevard, Suite 550 West Palm Beach, FL 33406

We have audited the financial statements of Palm Beach County Sports Commission, Inc. for the year ended September 30, 2023, and have issued our report thereon dated March 18, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter dated October 24, 2023. Professional standards also require that we communicate to you the following information related to our audit.

Qualitative Aspects of Accounting Practices,

You are responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Palm Beach County Sports Commission Inc. are described in Note 1 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year. We noted no transactions entered into by the Company 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 and are based on your 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 estimate affecting the financial statements was:

Your estimate of the allocation of functional expenses is based on time and effort observed and measured by management. We evaluated the key factors and assumptions used to develop the allocation of expenses tin determining that it is reasonable in relation to the financial statements taken as a whole.

There were no other financial statement disclosures which are particularly sensitive because of their significance to financial statement users.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit

We encountered no significant difficulties in performing and completing our audit.

Uncorrected Misstatements

Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We did not find any misstatements.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during our audit.

Other Audit Findings or Issues

There were no other audit findings or issues.

Other Matters

This information is intended solely for the use of Palm Beach County Sports Commission, Inc. and those charged with governance and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Mark Escoffery, P.A.

INDEPENDENT AUDITOR’S REPORT

AND FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

PALM BEACH COUNTY SPORTS COMMISSION, INC.

PALM BEACH COUNTY SPORTS COMMISSION, INC.

To The Board of Directors

INDEPENDENT AUDITOR’S REPORT

Palm Beach County Sports Commission, Inc.

West Palm Beach, Florida

Opinion

I have audited the accompanying Financial Statements of Palm Beach County Sports Commission, Inc., (‘the Organization”) (a not-for-profit organization) which comprise the Statements of Financial Position as of September 30, 2023 and 2022, and the related Statements of Activities, Functional Expenses and Cash Flows for the years then ended, and the related notes to the financial statements.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of September 30, 2023 and 2022 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

I conducted my audit in accordance with auditing standards generally accepted in the United States of America. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am required to be independent of Palm Beach County Sports Commission, Inc. and to meet my other ethical responsibilities in accordance with the relevant ethical requirements relating to my audit. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Responsibilities of Management for the Financial Statements

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 Palm Beach County Sports Commission, Inc.’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

My 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 my opinion. 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 generally accepted auditing standards 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 aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, I:

 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 Palm Beach County Sports Commission, Inc.'s internal control. Accordingly, no such opinion is expressed.

 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 Palm Beach County Sports Commission, Inc.'s ability to continue as a going concern for a reasonable period of time.

I am 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 I identified during the audit.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, I have also issued my report dated March 18, 2024, on my consideration of Palm Beach County Sports Commission, Inc.’s internal control over financial reporting and on my 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 my testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the 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 the Organization’s internal control over financial reporting and compliance.

Palm Beach Gardens, Florida March 18, 2024

PALM BEACH COUNTY SPORTS COMMISSION, INC.

STATEMENT OF FINANCIAL POSITION

AS OF SEPTEMBER 30, 2023 AND 2022

See Accompanying Notes to Financial Statements

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF ACTIVITIES

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022 See

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

Program Services

See Accompanying Notes to Financial Statements

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

Supporting Services

See Accompanying Notes to Financial Statements

PALM BEACH COUNTY SPORTS COMMISSION, INC.

STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

PALM BEACH COUNTY SPORTS COMMISSION, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities

The Palm Beach County Sports Commission, Inc. ("the Commission") is a Florida based not-forprofit organization that has a contractual agreement (Note 2) with Palm Beach County, Florida (A Political Subdivision of the State of Florida) ("the County") dedicated to attracting and supporting tourism to the County through sports promotion and events. The Commission also (through its private “non-contract” support) promotes youth sports in the County. Both “contract” and “noncontract” activities utilize local facilities, create hotel room nights, and have a positive economic impact on the County.

Comparable Financial Information

The Financial Statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the financial statements for the year ended September 30, 2022, from which the summarized information was derived. Certain 2022 amounts may be reclassified to conform to 2023 classifications. Such reclassifications had no effect on the change in net assets as previously reported.

Basis of Presentation

The Commission's financial statements are prepared on the accrual basis of accounting and in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-14 (Topic 958), and the provisions of the American Institute of Certified Public Accountants (AICPA) "Audit and Accounting Guide for Not-for-Profit Organizations."

Net assets and revenue, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified as follows:

Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the Organization. The Organization's board may designate assets without restrictions for specific operational purposes from time to time. The Commission releases any purpose restrictions when the asset is in place in service for the use stipulated by the donor (e.g., grantors).

Net assets with donor restrictions: Net assets subject to stipulations imposed by donors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Organization and/or by the passage of time.

Revenue is reported as an increase in net assets without donor restrictions unless use of the related assets is limited by donor-imposed or contractual restrictions. Expenses are reported as decreases in net assets without donor restrictions.

PALM BEACH COUNTY SPORTS COMMISSION, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments which are readily convertible into cash within ninety days of purchase.

Accounts Receivable

Accounts receivables are carried at the amount of the commitment expected to be recovered. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Management does not believe an allowance for bad debts is necessary, and none is provided.

Inventory

Inventory consists of items donated and are recorded at fair market value.

Refundable Advance

As part of the Commission's contract with the County beginning in 2017 the Commission received refundable advances to be used for operating expenses. The total refundable advance as of September 30, 2023, is $600,000 and accordingly a liability is recorded in the same amount.

Contributions

All contributions are available for unrestricted use, unless specifically restricted by the donor. Amounts designated for future periods or restricted by the donor for specific purposes are reported as contributions with donor restrictions.

Support that is restricted by the donor is reported as an increase in net assets if the restriction expires in the reporting period in which the support is recognized. All other donor restricted support is reported as an increase in net assets with donor restrictions, depending on the nature of the restrictions. When a donor restriction expires (that is, when a stipulated time restriction ends, or purpose restriction is accomplished) net assets with donor restrictions are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions.

Concentration of Credit Risk

Financial instruments that subject the Commission to concentrations of credit risk include cash. While the Commission attempts to limit its financial exposure, its deposit balances have at times exceeded federally insured limits. The Commission maintains accounts at institutions insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Commission has not experienced any losses on such balances.

PALM BEACH COUNTY SPORTS COMMISSION,

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)

Donated Services and In-Kind Contributions

The Commission records goods and services contributed by volunteers as support and expenses if they meet the criteria for measurement. Contributed goods are recorded at fair value at the date of donation. Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Commission. Donated goods, services, and certain operating expenses paid on behalf of the Commission (Note 7).

Functional Allocation of Expenses

The costs of program services and supporting activities have been summarized on a functional basis in the Statements of Activities. Program services are the costs that fulfill the purpose or mission for which the Commission exists. Supporting activities are all activities, other than program services, that include management and general expenses and fundraising expenses.

The Statement of Functional Expenses presents detail of the natural classification of expenses by function. Accordingly, certain costs have been allocated among programs and supporting activities benefited based on estimates of time and effort.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles include the use of estimates that affect the financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Accordingly, actual results could differ from those estimates.

Income Taxes

The Commission is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. However, income from certain activities not directly related to the Commission's taxexempt purpose is subject to taxation as unrelated business income. Management does not believe any income tax is due and there is no provision for taxes in these financial statements.

The Commission's Form 990, Return of Organization Exempt from Income Tax, for the years ended September 30, 2022, 2021, and 2020 are subject to examination by the IRS, generally for three years after being filed. There are no current examinations by the Internal Revenue Service.

Advertising

The Commission's advertising is primarily non-direct, and such costs are expensed as incurred. For the years ended September 30, 2023 and 2022, the Commission incurred approximately $169,905 and $63,939, respectively, in advertising costs, which are reported as advertising in the Statement of Functional Expenses.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)

Recently Adopted Accounting Policies

Effective October 1, 2022, the Commission adopted FASB ASC 842, Leases. The new standard establishes a right of use (ROU) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases with a term of less than 12 months will not record a right of use asset and lease liability and the payments will be recognized into profit or loss on a straight-line basis over the lease term.

The Commission elected to adopt FASB ASC 842, Leases, using the optional transition method that allows the Commission to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of net assets in the period of adoption.

The Commission elected to adopt the package of practical expedients available under the transition guidance with the new standard. This package includes the following: relief from determination of lease contracts included in existing or expiring leases at the point of adoption, relief from having to reevaluate the classification of leases in effect at the point of adoption, and relief from reevaluation of existing leases that have initial direct costs associated with the execution of the lease contract. The Commission also elected to adopt the practical expedient to use hindsight to determine the lease term and assess the impairment of the right of use assets.

See Note 6 – Commitments for a discussion of the impact of implementing FASB ASC 842, Leases.

As of October 1, 2020, the Commission adopted the provisions of FASB ASU 2014-09 – Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled. The Commission has evaluated the impact of the standard and determined that it did not result in significant changes to its method of revenue recognition.

As of October 1, 2020, the Commission adopted amendments to provisions of FASB ASU 2016-18 –Statement of Cash Flows (Topic 230): Restricted Cash. The implementation of ASU 2016-18 affects the presentation in the statement of cash flows to provide information that reconciles cash and restricted cash to amounts reported in the statement of financial position.

NOTE 2 - CONTRACT WITH PALM BEACH COUNTY

The Commission enters a multi-year administrative services and agency contract with the County. The contract provides that the Commission will perform or administer various functions such as attracting sports events, advertising, public relations, sports marketing and trade shows, familiarization tours and other projects and promotional services to assist the County in its sporting promotion efforts. Expenses made by the Commission under the contract are billed primarily on the cash basis and are subject to approval by the County prior to reimbursement. Effective February 1, 2015, the County levied a sixth cent of Bed Tax with an additional allocation to the Commission of 11.62%. Increasing the funding for this contract to 8.16% of the second, third, fifth, and sixth cent of the Tourist Development Tax.

PALM BEACH COUNTY SPORTS COMMISSION, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 2 - CONTRACT WITH PALM BEACH COUNTY (Cont’d.)

The Commission’s contract with the County for the fiscal year ended September 30, 2023 is on a reimbursement basis, and any portion of the contract budget unspent for the fiscal year is put back into the Commission’s reserve for future use. As of September 30, 2023, the cumulative reserve balance totaled $4,806,369 and remains earmarked for the Commission's use in accordance with the contract with the County.

On September 13, 2022, the Commission and the County entered into a new five-year agreement (R20221019) for the period October 1, 2022, through September 30, 2027. The contract is amended annually for certain exhibits (e.g., budget, org chart, etc.) but the body of the contract historically remains unchanged throughout the contract period.

The Commission also has in-kind activity with the County as further illustrated in Note 7.

NOTE 3 - NON-CONTRACT EXPENSES

The Commission incurs certain expenses in the normal course of its operations which are not reimbursed under the contract with the County (see Note 2). These expenses are related primarily to sports events, sponsorships, and membership services that are not covered under the contract with the County. The total amount of these expenses was approximately $178,286 and $192,459 for the years ended September 30, 2023, and 2022, respectively. This includes $9,800 and $9,805 of in-kind expenses for the years ended September 30, 2023, and 2022, that are shown under the Business Entities column in the table presented in Note 7.

NOTE 4 - PENSION PLAN

The Commission adopted a 401(k) Plan and Trust on January 1, 2015, for the benefit of all eligible employees to save for retirement on a tax-advantage basis. Employees are eligible to participate in the plan after completion of 6 months of service. At that time, the employer will make Safe Harbor nonelective contributions equal to 3% of employee's compensation which is 100% vested. Employer also contributes discretionary or Profit-Sharing contributions of 8.96% of employee compensation which is vested after completion of 1 year of service. Effective January 1, 2015, employees under the plan may elect to contribute into the plan by making 401(k) salary deferrals which results in a reduction in their taxable wages or elect to contribute into a Roth 401(k) subject to federal income tax. Both employee deferrals in addition to employee rollover contributions from a previous employer’s Simplified Employee Pension Plan (SEP) are 100% vested immediately. Contributions made by the Commission to the 401(k) Plan for the years ended September 30, 2023, and 2022 were $96,702 and $81,235, respectively.

NOTE 5 - COMPENSATED ABSENCES

Vacation pay is accrued by employees starting on their date of hire. If employees do not take their vacation in the ensuing twelve months, they may rollover unused vacation into the following year subject to certain limits. Accrued vacation for the years ended September 30, 2023 and 2022 was $38,330 and $39,302, respectively.

PALM BEACH COUNTY SPORTS COMMISSION, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 6 - COMMITMENTS

The Commission's administrative office located in West Palm Beach are provided by the County for the benefit of the Commission. The Commission leases office equipment under non-cancelable operating leases with expiration dates that extend through February 2028.

Future minimum lease payments under the operating leases are as follows:

Operating lease expense totaled $15,413 and $15,407 for the years ended September 30, 2023 and 2022, respectively, recorded within Facility Expense on the accompanying statement of functional expenses.

The implementation of FASB ASC 842, Leases did not have a material effect on the financial statements for the year ended September 30, 2023.

NOTE 7 - IN-KIND CONTRIBUTIONS

Donated goods and services that meet the criteria for recognition are reflected as in-kind contributions on the accompanying statement of activities. During the fiscal year, the County paid grants, indirect operating expenses, telephone, tax collector commissions, and inspector general fees on behalf of the Commission.

The Commission receives the use of donated facilities of its administrative offices provided by the County. The fair value of office space rent, common area maintenance, and related overhead costs are calculated by the County and are included within the Indirect Operating Expenses line item in the statement of activities.

PALM BEACH COUNTY SPORTS COMMISSION, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 7 - IN-KIND CONTRIBUTIONS (Cont’d.)

Several business entities have donated goods and services including supplies, advertising, and professional services. These goods and services are recorded at their estimated fair value. In-kind contributions for the years ended September 30, 2023, and 2022 are as follows:

The Commission also receives donated sports memorabilia and other goods to be auctioned at events. The contributed auction items are recorded at the estimated fair value when donated. For the fiscal year ended September 30, 2023, donated auction items valued at $12,095 were recorded as inventory on the statement of financial position.

NOTE 8 - CONCENTRATIONS-REVENUE

For the years ended September 30, 2023, and 2022, the Commission received 88% and 84% of its revenue, respectively, from expense reimbursements and indirect payments to others paid by Palm Beach County.

NOTE 9 - FAIR VALUE INSTRUMENTS

The Fair Value Measurement Topic of the FASB Accounting Standards Codification defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements for fair value measurements. The Commission measures the fair value of assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between independent observable inputs and unobservable inputs used to measure fair value as follows:

PALM BEACH COUNTY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 9 - FAIR VALUE INSTRUMENTS (Cont’d.)

Level 1: Quoted prices (unadjusted) inactive markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2: Inputs other than quoted market prices included within Level 1 that are observable for an asset or liability) either directly or indirectly.

Level 3: Unobservable inputs for an asset or liability. Level 3 inputs should be used to measure fair value to the extent that observable Level 1 or 2 inputs are not available.

Generally accepted accounting principles require disclosure of an estimate of fair value of certain financial instruments. The Commission's significant financial instruments are cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other short-term assets and liabilities. For these financial instruments (Level 1), carrying values approximates fair value because of the short maturity of these instruments.

NOTE 10 - CONTINGENCIES

The Commission has a contractual agreement with the County. The disbursement of funds received under this agreement generally require compliance with the terms and conditions specified in the agreement. Failure to comply with the terms of the agreement could reduce or eliminate the amount of funds available to the Commission from the County. A significant reduction in the level of funding received from the County would have a substantial effect on the Commission's programs. While this is possible, management believes it is unlikely. The Commission has a longstanding successful relationship with the County and has to date accomplished the objectives of the Commission the provisions of the agreement.

The COVID-19 pandemic has had a broad and negative impact on commerce and financial markets around the world. The United States and global markets experienced significant declines in value resulting from uncertainty caused by the pandemic. The Commission was impacted by the pandemic but with the help of strong reserves and government programs like PPP the Commission was able to navigate through the uncertain times.

While uncertainty in the markets remains, management believes the Commission is well positioned with a strong reserve. Additionally, bed tax revenues have returned to pre-pandemic levels, The Commission saw record setting bed tax revenues in 2022 and 2023, and forecasts for 2024 remain optimistic.

NOTE 11 - NET ASSETS WITH DONOR RESTRICTIONS

The Commission recognizes monies received from Florida Sports Foundation as designated with a restricted purpose. These donor-restricted funds are awarded to supplement a grant from the Sports Commission to a Category G grantee and for purposes that include business development, coop marketing, digital media, event hosting, event servicing and familiarization tours.

As of September 30, 2023, and 2022, these net assets with donor restrictions totaled 613,931 and $533,154, respectively. Net assets were released from donor restrictions by incurring expenses satisfying the restrictions noted above of $211,200 and $106,177 for the years ended September 30, 2023, and 2022, respectively.

PALM BEACH COUNTY SPORTS COMMISSION, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 12 - RELATED PARTY TRANSACTIONS

During the prior fiscal year, the Commission supported a not-for-profit organization (African American Golfers Hall of Fame) of which a member of the Board of Directors is that corporations President.

The Commission paid $4,900 and $4,500 to this related party for the years ended September 30, 2023, and 2022, respectively.

NOTE 13 - LIQUIDITY AND AVAILABLITY

The following financial assets available to meet cash needs for general expenditure, without donor restrictions or other designations limiting their use, within one year of the date of the statement of financial position:

As part of the Commission’s liquidity management, it structures its financial assets to be available for general expenditures and other obligations as they come due. To further help manage its liquidity needs, the Commission has been advanced cash from the County in prior fiscal years totaling $600,000. This is due to the reimbursement process which takes on average 45-60 days.

Additionally, the Commission has a cumulative reserve totaling $4,806,369 as of September 30, 2023. This reserve increases or decreases each year depending on bed tax collections and whether the Commission goes over/under budget at the end of the fiscal year. Although the Commission does not intend to spend from their reserve other than amounts appropriated for general expenditures as part of its annual contract budget approval and appropriation, amounts from their reserve could be made available, if necessary, with permission from the County and are earmarked by County Ordinance for the Commission.

NOTE 14 - PAYCHECK PROTECTION PROGRAM

On April 16, 2020, the Commission received loan proceeds in the amount of $128,053 under the Paycheck Protection Program (“PPP”). Established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the PPP provided loans to qualifying businesses in amounts up to 2.5 times the business’s average monthly payroll expenses. PPP loans and accrued interest are forgivable if the borrower maintains its payroll levels and uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities.

PALM BEACH COUNTY SPORTS COMMISSION, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTE 14 - PAYCHECK PROTECTION PROGRAM (Cont’d.)

In March 2021, the Organization was approved for $128,053, a Second Draw of its loan through the U.S. Small Business Administration ("SBA") under the Paycheck Protection Program. On November 8, 2021, the principal and accrued interest of the second PPP loan was forgiven, at which time the Commission recognized the support in the accompanying statement of activities.

NOTE 15 - SUBSEQUENT EVENTS

The Commission has evaluated events that occurred subsequent to the year-end for potential recognition or disclosure in the financial statements through the date on which the financial statements were available to be issued.

The date when the financial statements were available to be issued was March 18, 2024.

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

I have audited the financial statements of the Palm Beach County Sports Commission, Inc. (“the Organization”) (a not-for-profit organization) as of and for the years ended September 30, 2023 and 2022, and have issued my report thereon dated March 18, 2024. I conducted my audits 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.

Internal Control Over Financial Reporting

In planning and performing my audits, I considered the Organization’s internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Organization’s internal control over financing 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 statement will not be prevented or detected and corrected on a timely basis.

My consideration of internal control over financial reporting 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 deficiencies, significant deficiencies, or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weaknesses, as defined above.

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 (CONT’D.)

To The Board of Directors

Palm Beach County Sports Commission, Inc.

West Palm Beach, Florida

Compliance and Other matters

As part of obtaining reasonable assurance about whether the Organization’s financial statements are free of material misstatement, I 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 my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of Management, the Board of Directors, and others within the entity, and is not intended to be and should not be used by anyone other than these specified parties.

Palm Beach Gardens, Florida

March 18, 2024

Palm Beach County Convention Center Food & Hospitality

Mark Escoffery, P.A.

March 28, 2024

To the General Manager and Management of Ovations Food Services, L.P. d/b/a OVG Hospitality Palm Beach County Convention Center

West Palm Beach, Florida

We have audited the Statement of Profit and Loss of Ovations Food Services, L.P. d/b/a OVG Hospitality for the year ended September 30, 2023, and have issued our report thereon dated March 28, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter dated October 24, 2022. Professional standards also require that we communicate to you the following information related to our audit.

Qualitative Aspects of Accounting Practices,

You are responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Ovations Food Services, L.P. d/b/a OVG Hospitality are described in Note 2 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year. We noted no transactions entered into by the Company 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.

There were no other financial statement disclosures which are particularly sensitive because of their significance to financial statement users.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit

We encountered no significant difficulties in performing and completing our audit.

Uncorrected Misstatements

Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We did not find any misstatements.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during our audit.

Other Audit Findings or Issues

There were no other audit findings or issues.

Other Matters

This information is intended solely for the use of Ovations Food Services, L.P. d/b/a OVG Hospitality and those charged with governance and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Mark Escoffery, P.A.

OVATIONS FOOD SERVICES, L.P. d/b/a OVG HOSPITALITY

PALM BEACH COUNTY CONVENTION CENTER LOCATION

WEST PALM BEACH, FLORIDA

INDEPENDENT AUDITOR’S REPORT

AND FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

INDEPENDENT AUDITOR’S REPORT

To the General Manager and Management of Ovations Food Services, L.P. d/b/a OVG Hospitality Palm Beach County Convention Center West Palm Beach, Florida Opinion

We have audited the accompanying Statements of Profit and Loss of Ovations Food Services, L.P. d/b/a OVG Hospitality (a Florida partnership), for the years ended September 30, 2023 and 2022, and the related notes to the financial statements.

In our opinion, the September 30, 2023 and 2022 financial statements referred to above presents fairly, in all material respects, the results of Ovations Food Services, L.P. d/b/a OVG Hospitality’s operations for the years ended September 30, 2023 and 2022 pursuant to the Food and Beverage Services Agreement referred to in Notes 1 and 2.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 Ovations Food Services, L.P. d/b/a OVG Hospitality 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 opinion.

Emphasis of Matter

We draw attention to notes 1 and 2 of the financial statement, which describes the financial statement was prepared for the purpose of complying with the provisions of the Food and Beverage Services Agreement between the Board of County Commissioners of Palm Beach County, and Ovations Food Services, L.P. d/b/a OVG Hospitality, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

Responsibilities of Management for the Financial Statements

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 Ovations Food Services, L.P. d/b/a OVG Hospitality’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

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 opinion. 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 generally accepted auditing standards 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 generally accepted auditing standards, 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 Ovations Food Services, L.P. d/b/a OVG Hospitality’s internal control. Accordingly, no such opinion is expressed.

 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 Ovations Food Services, L.P. d/b/a OVG Hospitality’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.

Palm Beach Gardens, Florida

March 28, 2024

OVATIONS FOOD SERVICES, L.P. d/b/a OVG HOSPITALITY

PALM BEACH COUNTY CONVENTION CENTER LOCATION

WEST PALM BEACH, FLORIDA

STATEMENT OF PROFIT AND LOSS

YEARS ENDED SEPTEMBER 30, 2023 AND 2022

NOTES TO THE STATEMENT OF PROFIT AND LOSS YEARS ENDED 30, 2023 AND 2022

NOTE 1 – FOOD AND BEVERAGE AGREEMENT

Ovations Food Services, L.P. d/b/a OVG Hospitality (the “Company”) and Palm Beach County are parties to a Food and Beverage Services Agreement dated July 1, 2010 (the “Agreement”), wherein the County granted the Company the exclusive right to provide food and beverage and catering services (the “Food and Beverage Services”) at the Palm Beach County Convention Center (the “Center”) subject to certain exceptions, as defined within the contract. The Agreement commenced on July 1, 2010, and will continue through September 30, 2015, a period of five (5) years and three (3) months.

There was an amendment to the original agreement with an effective date of October 1, 2015 which extended the term of the original agreement for an additional period of five (5) years commencing on October 1, 2015 and ending on September 30, 2020 (the “Extended Term”). Reference Article 2 Term. There was a second amendment to the original agreement on June 16, 2020 which extended the term of the agreement for an additional twelve (12) months commencing on October 1, 2020 and ending on September 30, 2021 (the “Extended Term”).

A third amendment to the original agreement was executed on June 15, 2021 which extended the term of the agreement for an additional twelve (12) months commencing on October 1, 2021 and ending on September 30, 2022 (the “Extended Term”).

The Company signed a new agreement with Palm Beach County that was executed on August 22, 2022 with a term of five years beginning October 1, 2022 and continuing through September 30, 2027 with the potential for one five year extension at the end of the first term.

Pursuant to the terms of the Agreement, the Company and Palm Beach County have agreed to distribute the net profits, as defined, from the Food and Beverage Services provided at the Center as follows:

 The County will receive 93% of the net profits, as defined;

 The Company will receive 7% of the net profits, as defined;

The Company has remitted total payments to the County of $ $2,377,184 and $1,275,268 for the years ended September 30, 2023, and September 30, 2022, respectively. The County owed the Company a total of $80,061 for the year ended September 30, 2023 and paid or credited to Ovations a total of $111,509 for the year ended September 30, 2022. The amounts owed or credited from the County to the Company represent reimbursements for months where the Center incurred a loss.

Also, pursuant to the terms of the Agreement, the Company is required to maintain a $1,000,000 performance bond under which Palm Beach County can draw upon in the event the Company does not faithfully perform, as defined, in accordance with the terms of the Agreement. The performance bond held with Hartford Fire Insurance Company covers a one (1) year period through June 30, 2023 and 2022, with annual renewals.

NOTES TO THE STATEMENT OF PROFIT AND LOSS

NOTE 1 – FOOD AND BEVERAGE AGREEMENT (Cont’d)

The following is a monthly schedule of gross receipts from the following sources:

NOTES TO THE STATEMENT OF PROFIT AND LOSS YEARS ENDED 30, 2023 AND 2022

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company recognizes gross receipts when products are sold or services are provided to its customers.

Expense Recognition

The Company recognizes expenses based upon the accrual method of accounting unless otherwise disclosed.

NOTE 3 – RESERVE FUND

Pursuant to the terms of the Agreement, the Company provides for the purchase of small wares expended against a cumulative monthly marketing reserve fund (the “Fund”) calculated at 2% of gross receipts, which is included in other expenses in the accompanying statement. The Company can use the amounts in the Fund to pay the cost of marketing activities and for the purchase of small wares, as defined. The Fund is not required to be deposited into a separate bank account. Upon the expiration or termination of the Agreement, the Company shall remit to Palm Beach County the then-outstanding balance of the Fund. As of September 30, 2023 and 2022, the cumulative balance in the reserve fund was $159,959 and $174,830, respectively.

NOTE 4 – INSURANCE COSTS

The Company’s operations at the Center are covered under workers’ compensation and comprehensive general liability (umbrella) insurance coverage obtained by Ovations Food Services, LP and its affiliates on a consolidated basis. The total cost of this coverage has been allocated to the operating location of Ovations Food Services, LP and its affiliates, including the Center. In the accompanying statement, charges for workers’ compensation and liability coverage totaling $135,127 and $110,627 in 2023 and 2022, respectively, are included in “other payroll cost and benefits” and other expenses.

NOTE 5 – SUBCONTRACTOR INCOME

The Company has entered into various subcontractor agreements to provide certain concession and catering services at the Center. There was $459,758 of subcontract revenue recognized in 2023 and $476,128 in 2022. These amounts have been properly included in the accompanying statements as part of “subcontract and other income.”

NOTE 6 – SUPPLEMENTAL CATERING FEE

The Company adds to its catering contracts a service charge which covers all the incidental expenses incurred by Ovations to carry out the terms of the catering contract or agreement. These charges totaled $972,933 in 2023 and $681,215 in 2022.

NOTES TO THE STATEMENT OF PROFIT AND LOSS YEARS ENDED 30, 2023 AND 2022

NOTE 7 – CONSIGNMENT INCOME

Included in “subcontract and other income” are flow-through revenues of $37,600 and $67,057 for the year ended September 30, 2023 and 2022, respectively, pertaining to consignment income from services provided by the Palm Beach County Convention Center. These revenues are remitted to the building and the consignment income is included as an offsetting expense in “Administration and Other Expenses.”

NOTE 8 – INCENTIVE FEES

According to the Agreement with Palm Beach County, Ovations is entitled to receive an “incentive fee” based upon meeting certain performance measures each year. The incentive fee is calculated at 1% applied to gross sales up to $2,500,000, and up to 2% in addition based upon sales in excess of $2,500,000 up to $4,000,000. The qualitative performance measures are generally assessed subsequent to the close of the fiscal year. For the years ended September 30, 2023 and 2022, no incentive fees were earned.

NOTE 9 – RISKS AND UNCERTAINTIES

End of Global Pandemic - The World Health Organization declared the COVID-19 outbreak a global pandemic on March 11, 2020. The pandemic had extensive impacts on society, resulting in significant disruptions to the global economy, businesses, and capital markets worldwide. The United States implemented travel restrictions and many businesses announced extended closures, which adversely impacted the Company's operations in the fiscal years 2020 through 2022. However, in the fiscal year 2023, the global community successfully managed the pandemic through widespread vaccination efforts, improved treatments, and public health measures. As a result, the World Health Organization officially declared the end of the COVID-19 pandemic in mid-2023.

Following the end of the pandemic, the Company experienced a gradual recovery in its operations and financial performance.

Despite the challenges faced during the pandemic, the Company demonstrated resilience and adaptability, implementing various strategies to mitigate financial, operational, and liquidity risks. As of September 30, 2023, the Company has successfully navigated the pandemic's impact and is well-positioned for future growth and success in the post-pandemic economy. Management will continue to monitor any residual effects of the pandemic and remains committed to making necessary adjustments to ensure the Company's long-term stability and success.

NOTE 10 – SUBSEQUENT EVENTS

The Company evaluated subsequent events through March 28, 2024, the date the financial statements were available to be issued.

On November 13, 2023, the Company collected $80,061 due from Palm Beach County for months where the Company incurred a loss.

2022-2023 Remittances

NOTES TO STATEMENT OF PROFIT AND LOSS

YEAR ENDED SEPTEMBER 30, 2023

OVATIONS FOOD SERVICES, L.P.

d/b/a OVG HOSPITALITY

PALM BEACH COUNTY CONVENTION CENTER LOCATION

WEST PALM BEACH, FLORIDA

NOTES TO STATEMENT OF PROFIT AND LOSS

YEAR ENDED SETPTEMBER 30, 2023

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

To Management of Palm Beach County Convention Center

West Palm Beach, Florida

In planning and performing our audit of the financial statements of the Operations of the Palm Beach County Convention Center (Convention Center) as of and for the years ended September 30, 2023 and 2022, in accordance with auditing standards generally accepted in the United States of America, we considered the Convention Center’s system of internal control over financial reporting (internal control) as a basis for designing auditing 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 Convention Center’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Convention Center’s internal control.

Definitions Related to Internal Control Deficiencies

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 Convention Center’s financial statements will not be prevented, or detected and corrected on a timely basis.

Our Responsibilities

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might material weaknesses. 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.

This communication is intended solely for the information and use of management, and others within the Convention Center, and is not intended to be and should not be, used by anyone other than these specified parties.

Holyfield & Thomas, LLC

West Palm Beach, FL

April 8, 2024

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April 8, 2024

Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

To the General Manager and Management of Global Spectrum, L.P.

Palm Beach County Convention Center

West Palm Beach, Florida

We have audited the financial statements of the Operations of the Palm Beach County Convention Center (Convention Center) for the years ended September 30, 2023 and 2022, and we expect to issue our report thereon in April 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, 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 November 1, 2023. 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 Convention Center are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2023. We noted no transactions entered into by the Convention Center 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 financial statements were the settlement value of accrued and deferred obligations. We evaluated the methods, assumptions, and data used to develop these estimates in determining that they were reasonable in relation to the financial statements taken as a whole.

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.

Corrected and Uncorrected Misstatements

Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no uncorrected misstatements, and there were only two reclassification entries for financial statement presentation purposes only. See reclassifying journal entries report on page 4.

Disagreements with Management

For purposes of this letter, a disagreement with management is a disagreement on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in the management representation letter to be dated upon issuance of the financial statements.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to Palm Beach County Convention Center’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues

We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Convention Center’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Information in Documents Containing Audited Financial Statements

We are not aware of any documents that contain the audited financial statements. If such documents were to be published, we would have a responsibility to determine that such financial information was not materially inconsistent with the audited statements of Palm Beach County Convention Center.

Other Matters

With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with U.S. generally accepted accounting principles, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Closing

We are pleased to respond to any questions you have about the audit or the contents of this letter. We appreciate the opportunity to be of service to you with respect to your audit and accounting needs.

General Manager and Management of Global Spectrum, L.P.

Palm Beach County Convention Center

April 8, 2024

Page 3

This information is intended solely for the use of the General Manager, management of the Operations at the Palm Beach County Convention Center Managed by Global Spectrum, L.P. and the Board of County Commissioners of Palm Beach County and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Holyfield & Thomas, LLC

OPERATIONS AT THE PALM BEACH COUNTY CONVENTION CENTER MANAGED BY GLOBAL SPECTRUM, L.P.

REPORT ON AUDITS OF SPECIAL-PURPOSE FINANCIAL STATEMENTS

For the Years Ended September 30, 2023 and 2022

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

INDEPENDENT AUDITOR’S REPORT

To the General Manager and Management of Global Spectrum, L.P.

Palm Beach County Convention Center

West Palm Beach, Florida

Opinion

We have audited the accompanying special-purpose statements of assets and liabilities of the Operations at the Palm Beach County Convention Center, Managed by Global Spectrum, L.P., as of September 30, 2023 and 2022, and the related special-purpose statements of revenues, expenses and transfers, and cash flows for the years then ended, and the related notes to the special-purpose financial statements.

In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the assets and liabilities of the Operations at the Palm Beach County Convention Center, Managed by Global Spectrum, L.P. as of September 30, 2023 and 2022, and the revenues, expenses, transfers, and cash flows for the years then ended, in accordance with the basis of accounting described in Notes 1 and 2.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 Palm Beach County Convention Center and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of Accounting

We draw attention to Notes 1 and 2 of the special-purpose financial statements, which describe the basis of accounting and purpose for which the special-purpose financial statements are prepared. The special-purpose financial statements are prepared for the purpose of complying with the provisions of the Convention Center Operating Agreement (Management Agreement) between the Board of County Commissioners of Palm Beach County and Global Spectrum, L.P., which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the financial reporting provisions of the Management Agreement referred to above.. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the special-purpose financial statements in accordance with the financial reporting provisions of the Management Agreement referred to in Notes 1 and 2; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the special-purpose financial statements that are free from material misstatement, whether due to fraud or error.

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 opinion. 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 generally accepted auditing standards 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 generally accepted auditing standards, 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 Palm Beach County Convention Center’s internal control. Accordingly, no such opinion is expressed.

 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 Palm Beach County Convention Center'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.

Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the special-purpose financial statements as a whole. The combining schedule of revenues, expenses and transfers (unaudited) on page 13 and the related notes on page 14 are presented for purposes of additional analysis and are not a required part of the special-purpose financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the special-purpose financial statements. The information, except for that portion marked “unaudited,” on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the special-purpose financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the special-purpose financial statements or to the special-purpose financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the special-purpose financial statements as a whole.

Restriction on Use

Our report is intended solely for the information and use of the boards of directors and management of Palm Beach County Convention Center, Board of County Commissioners of Palm Beach County, and Global Spectrum, L.P. and is not intended to be and should not be used by anyone other than these specified parties.

Holyfield & Thomas, LLC

West Palm Beach, Florida

April 8, 2024

See accompanying notes to special-purpose financial statements.

See accompanying notes to special-purpose financial statements.

OPERATIONS AT THE PALM BEACH COUNTY CONVENTION CENTER MANAGED BY GLOBAL SPECTRUM, L.P.

SPECIAL-PURPOSE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

2023 2022

See accompanying notes to special-purpose financial statements.

OPERATIONS AT THE

PALM BEACH COUNTY CONVENTION CENTER MANAGED BY GLOBAL SPECTRUM, L.P.

SPECIAL-PURPOSE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

2023 2022

in) operating activities:

See accompanying notes to special-purpose financial statements.

NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

1. Nature of Organization and Significant Accounting Policies

Nature of Organization

The Board of County Commissioners of Palm Beach County (the "County") entered into an agreement with a third party, Global Spectrum, L.P. (the “Organization”), a Pennsylvania limited partnership, which provides for the outsourcing of management and operation of the Palm Beach County Convention Center (the “Facility”) to the Organization. The Facility is owned by the County and is located in the City of West Palm Beach, Florida. The operations primarily include revenues generated from the rental of the Facility’s meeting rooms, audio/visual equipment and parking services.

Basis of Presentation

The special-purpose financial statements were prepared for the purpose of complying with the provisions of the Convention Center Operating Agreement (Management Agreement) between the County and the Organization and are not intended to be a complete presentation of the Facility’s assets, liabilities, revenues, and expenses in accordance with accounting principles generally accepted in the United States of America.

The special-purpose financial statements only present the assets, liabilities, revenues, expenses, and transfers of the Facility that are managed by the Organization pursuant to the provisions of the Management Agreement.

Basis of Accounting

Revenues and expenses are recognized in the special-purpose financial statements on the accrual basis of accounting. Revenue consists of rental and service income, and other ancillary income. Rental and service income is recognized when the event occurs. Ancillary income is recognized at the time of sale. All expenses are recorded when the good or service is provided.

Fair Value of Financial Instruments

The special-purpose financial statements follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820-10, Fair Value Measurements and Disclosures, which provides a common definition of fair value, establishes a framework to measure fair value within accounting principles generally accepted in the United States of America, and expands the disclosures about fair value measurements. The standard does not create any new fair value measurements. Instead, it applies under existing accounting pronouncements that require or permit fair value measurements.

For assets and liabilities measured at fair value on a recurring basis, entities should disclose information that allows financial statement users to assess (1) the inputs used to develop such measurements, such as Level 1 (i.e., quoted price in an active market for an identical asset or liability), Level 2 (i.e., quoted price for similar assets or liabilities in active markets), or Level 3 (i.e., unobservable inputs); and (2) the effect on changes in net assets of recurring measurements that use significant unobservable (Level 3) inputs. The special-purpose financial statements do not include financial instruments measured at fair value on a recurring basis.

NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

1. Nature of Organization and Significant Accounting Policies, continued

The following methods and assumptions were used by the Organization in estimating fair value of financial instruments that are not disclosed under ASC 820-10.

Cash: The carrying amount reported approximates fair value.

Accounts receivable: The carrying amount reported approximates fair value due to the shortterm of the receivables.

Accounts payable and accrued expenses: The carrying amount reported approximates fair value due to the short-term duration of the instruments.

Due to (from) others: The carrying amount reported approximates fair value due to the shortterm duration of the instruments.

Accounting Estimates

The preparation of the special-purpose financial statements in conformity with provisions of the Management Agreement require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the special-purpose financial statement and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Cash consists of cash on hand, and cash in checking and saving accounts. Cash in the amounts of approximately $1,658,300 and $1,933,100 is designated for advanced deposits for events that will occur subsequent to September 30, 2023 and 2022, respectively. As of September 30, 2023, the amount of advance deposits for events liability exceeded the cash balance by approximately $35,900. The difference was due to additional escrow amounts that were contracted directly with the Facility rather than the County for miscellaneous revenues, and therefore weren’t included in the escrow cash account. As of September 30, 2022, the amount of advance deposits for events in the escrow cash account exceeded the liability by approximately $179,600. This difference was due to the September monthly transfer amount for completed events that was not made to the County until October 2022.

Receivables

Accounts receivable and amounts due from/to Palm Beach County, other related parties, and customers are carried at their original charged amounts, which approximate fair value, based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts, if any, by identifying troubled accounts and by using historical experience applied to an aging of accounts. Receivables are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. The allowance for uncollectable accounts receivable as of September 30, 2023 and 2022 was approximately $37,400 and $1,600, respectively.

NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

1. Nature of Organization and Significant Accounting Policies, continued Deferred Revenue

As of September 30, 2023 and 2022, deferred revenue includes designated advance deposits and other amounts for events scheduled for a subsequent fiscal year. These deposits are included in the accompanying special-purpose financial statements in deferred revenue.

Advertising

Advertising costs are expensed when incurred. Advertising costs totaled approximately $15,400 and $1,900 for the years ended September 30, 2023 and 2022, respectively.

Income Tax Status

The Facility is not subject to federal or state income tax because its operations fall under the tax-exempt status of the County.

2. Management Agreement

In July 2012, the County amended and restated its operating agreement with the Organization to operate and manage the Facility, except for food, beverage, and catering services. The Management Agreement provides that Discover Palm Beach County, Inc. (a Palm Beach County not-for-profit agency) is responsible for the Organization’s long-term sales (i.e., booking events that will not occur for 18 months or more in the future). This agreement covers the period from October 1, 2012, through September 30, 2017, with an option to renew for an additional five years thereafter. In July 2017, the County and the Organization extended its operating agreement for another five years through September 30, 2022. A second amendment was entered into in May 2022, extending the operating agreement to September 30, 2023. A new five-year operating agreement was entered into between the Organization and the County beginning December 1, 2023 and ending September 30, 2028 with the option for one five-year renewal.

The Management Agreement requires that net proceeds from the operation of the Facility are paid to the County and that operating deficits, if any, are funded by the County. The Organization provided net payments to the County during fiscal year 2023 and 2022. These amounts are presented net on the special-purpose statements of revenues, expenses and transfer as contractual funding transfers. Should the funding reimbursements from the County not be provided, the ongoing operations would be impaired. The County's approved budget for fiscal year ended September 30, 2023 and 2022 amounted to $5,780,000 and $5,350,000, respectively.

The County directly paid for machinery and equipment, insurance, legal, inspector general fee, and indirect operating expenses, which totaled $938,700 and $781,800 for the fiscal years ended September 30, 2023 and 2022, respectively. These expenses are not included in the accompanying special-purpose financial statements. Total management fees, including incentives for the years ended September 30, 2023 and 2022, were $259,015 and $254,092, respectively, of which $90,500 and $52,000 remained unpaid as of September 30, 2023 and 2022, respectively. The unpaid balances of management fees are included as accrued expenses in the statement of assets and liabilities.

NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

2. Management Agreement

All of the Facility staff are employed by the Organization. The Facility does not have any employees. The County reimbursed the Organization for employee salaries and related benefits in fiscal years 2023 and 2022. These amounts are included in contracted services in the special-purpose statements of activities.

3. Food, Beverage and Catering Services

The County engaged Ovations Food Services, L.P. (a related party to the Organization) to provide food, beverage, and catering services at the Facility. Global Spectrum, L.P. is not a party to this agreement and has no responsibility for food, beverage, and catering services. The activities of food, beverage and catering services are not included in the special-purpose statements of revenues, expenses and transfers for the years ended September 30, 2023 and 2022; however the activity for the year ended September 30, 2023 is included as unaudited combining information in the supplemental combining schedule of revenues, expenses and transfers.

4. Prepaid Expenses

The Organization incurred expenses, including prepaid expenses for software, operating expenses, and insurance deposits, for services to be provided after fiscal years ending September 30, 2023 and 2022, and these amounts have been properly included in prepaid expenses in the special-purpose statements of assets and liabilities.

5. Contingencies

While the Organization and other parties may be involved in various legal actions arising in the normal course of business, management does not believe such matters will have a material negative effect upon the Convention Center Operations or these special-purpose financial statements.

6. Leases

The Organization leases minimal equipment, but does have various maintenance contracts. However, there are no long-term leases/contracts that create commitments into future years as they can be terminated at any time, or are on a month-to-month basis.

7. Related Party Transactions

The Organization earns a management fee as compensation for operating the Facility. Management fees include both fixed and variable portions. The total amount earned for the years ended September 30, 2023 and 2022 by the Organization was $259,015 and $254,092, respectively. Management fees include $38,500 and $40,000 as an incentive fee for the years ended September 30, 2023 and 2022, respectively. Accrued balance of incentive fee as of September 30, 2023 and 2022, amounted to $90,500 and $52,000, respectively, pending approval from the County. Accounts payable for fixed management fee as of September 30, 2023 and 2022, amounted to $73,505, and $17,841, respectively.

NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

7. Related Party Transactions

In addition, the Facility purchases certain operating services including employee benefits and related expenses, insurance coverage, and meeting and convention expenses from the Organization. Total expense for these services for the years ended September 30, 2023 and 2022 purchased from the Organization was $985,002 and $833,778, respectively. Accounts payable for operating services as of September 30, 2023 and 2022, amounted to $387,455 and $147,204, respectively.

8. Credit and Business Concentrations

Business Concentration

The Facility received approximately 29% and 26% of total revenues from five customers during the years ended September 30, 2023 and 2022, respectively. One of the five customers represents approximately 9% and 6% of total revenues for the years ended September 30, 2023 and 2022, respectively.

Credit Concentration

The Organization maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of September 30, 2023 and 2022, there was approximately $2,848,900 and $2,705,800, respectively, in excess of the FDIC limit. The Organization has not experienced any losses on such accounts and management believes the Organization is not exposed to any significant credit risk arising from such balances.

9. Subsequent Events

Management has evaluated subsequent events through April 8, 2024, the date on which the specialpurpose financial statements were available to be issued, and determined there were no further events to disclose in these special-purpose financial statements.

COMBINING SCHEDULE OF REVENUES, EXPENSES AND TRANSFERS (UNAUDITED)

See independent auditor's report and accompanying notes to combining schedule of activities (unaudited).

NOTES TO SUPPLEMENTARY INFORMATION (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2023

1. General

The accompanying supplemental combining schedule of revenues, expenses and transfers (unaudited) presents the activities of the Operations at the Palm Beach County Convention Center, managed by Global Spectrum, L.P., and the food, beverage and catering services managed by a third-party vendor, Ovations Food Services, L.P., for the year ended September 30, 2023.

2. Basis of Accounting

The accompanying supplementary information is presented using the accrual basis of accounting.

See independent auditor’s report.

Discover The Palm Beaches

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Holyfield & Thomas, LLC

(561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com c c c c c c c c c c c

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407

ToManagementandtheAuditCommitteeof Discover Palm Beach County, Inc.

West Palm Beach, Florida

Ladies and Gentlemen:

In planning and performing our audit of the financial statements of Discover Palm Beach County, Inc. (the “Organization”) as of and for the year ended September 30, 2023, in accordance with auditing standards generally accepted in the United States of America, we considered the Organization’s internal control over financial reporting (internal control) as a basisfordesigningauditproceduresthatareappropriateinthecircumstancesforthepurpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control.

DefinitionsRelatedtoInternalControlDeficiencies

A deficiency ininternalcontrolexistswhenthedesignor operationof acontroldoes notallow 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 Organization’s financial statements will not be prevented, or detected and corrected, on a timely basis.

OurResponsibilities

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, we do provide a current status remark concerning deficiencies in internal control arising from the prior engagement that we considered to be a control deficiency, or a comment for your consideration in addressing best practices in internal control.

Discover Palm Beach County, Inc.

March 13, 2024

Page 2

PRIOR YEAR COMMENT

Identified Deficiencies in Internal Control

20-03 – Proper Cut-off at Year End

During this year and prior year audits, journal entries were recorded to achieve proper cut-off at year-end. Generally Accepted Accounting Principles require transactions to be recorded in the correctperiod.Werecommendedthatattentionbegiventotransactiondatestoensuretheproper period is posted.

Management’s response: The processing of transactions at year-end continues to be a challenge due to the managing of expenses between the contract reimbursement process, which is in a cash basis and the financial reporting time frame, which is on an accrual basis. As a result of the in-depth review of the Fiscal Year End process, we have now created a comprehensive Year-end checklist that has significantly reduced the volume of adjusting entries required in order to reconcile back to the county funding report.

Current status: We noted during our current audit that Management continues to make significant improvement in this area.

TheOrganization’swritten responsetothecomments mentioned abovehave not beensubjected to the audit procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

This communication is intended solely for the information and use of Management, the Audit Committee,andotherswithintheOrganization,andisnotintendedtobe,andshouldnotbe,used by anyone other than these specified parties.

Holyfield & Thomas, LLC

West Palm Beach, Florida

March 13, 2024

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

March 12, 2024

To the Audit Committeeof Discover Palm Beach County, Inc. West Palm Beach, Florida

We have audited the financial statements of Discover Palm Beach County, Inc. (the “Organization”) for the year ended September 30, 2023, and plan to issue our report in April 2024. Professional standards requirethat weprovide you with information aboutour responsibilities under generally accepted auditing standards, 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 September 29, 2023. Professional standards also require that we communicateto you the following information related to our audit.

Significant Audit Matters

Qualitative Aspects of Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Discover Palm Beach County, Inc. are described in Note 1 to the financial statements. As described in Note 1, the Organization adopted the new FASB Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). This new standard replaced existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. Under thenew guidance,leases withterms of morethan12months arerequired toberecognizedin the statement of financial position as liabilities, with a corresponding “right-of-use” asset. The Organization also adopted the new FASB Accounting Standards Update(ASU) 2020-07, Not-for-Profit Entities (Topic 958): PresentationandDisclosures byNot-for-Profit Entitiesfor ContributedNonfinancialAssets,in20212022.Thepurposeofthestandardistoclarifythepresentationanddisclosureofcontributednonfinancial assetswithanintentiontoprovidethereaderofthefinancialstatementsaclearedunderstandingofwhat type of nonfinancial assets were received and how they are used and recognized by the not-for-profit. The application of these new standards had no significant impact on the Organization’s financial statements.

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 inthe 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 futureevents. Certain accounting estimates are particularly sensitive because of theirsignificance 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 financial statements were:

 Management’s estimate of accounts receivable from Palm Beach County, which is based on expenses incurred by the Organization and related cost-reimbursement submissions to Palm Beach County.

 Management’s estimate of the settlement the value of accounts payable, accrued expenses, and deferred revenue, which is based onmanagement’s experience and analysis.

Certainfinancialstatement disclosuresareparticularlysensitivebecauseoftheirsignificancetofinancial statement users. The most sensitive disclosure affecting thefinancial statements was:

 The disclosure of transactions with Palm Beach County and economic dependency presented in Note 3 to the financial statements.

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.

Corrected and Uncorrected Misstatements

Professional standardsrequireus toaccumulateallmisstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. See the attached schedule of adjusting journal entries for the material misstatements detected as a result of audit procedures and corrected by management.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statementsortheauditor’sreport.Wearepleasedtoreportthatnosuchdisagreementsaroseduringthe course of our audit.

Management Representations

We will request certainrepresentations from management in the management representation letter.

Management Consultations with Other Independent Accountants

Insomecases,managementmaydecidetoconsultwithotheraccountantsaboutauditingandaccounting matters,similartoobtaininga“secondopinion”oncertainsituations.Ifaconsultationinvolvesapplication of an accounting principle to the Organization’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues

We generally discuss avariety of matters, including the application of accounting principles and auditing standards, withmanagementeachyearpriortoretentionastheOrganization’sauditors.However,these discussionsoccurredinthenormalcourseof ourprofessionalrelationshipandour responseswerenota condition to our retention.

Other Matters

With respect to the supplementary information accompanying the financial statements, wemade certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with U.S. generally accepted accounting principles, the method of preparing it has not changed fromthe prior period, andthe information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Discover Palm Beach County, Inc.

March 12, 2024

Page 3

Closing

We are pleased to respond to any questions you have about the audit or the contents of this letter. We appreciate the opportunity to be of serviceto you with respect to your audit and accounting needs.

ThisinformationisintendedsolelyfortheuseoftheAuditCommitteeandmanagementofDiscoverPalm Beach County, Inc. and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Holyfield & Thomas, LLC

West Palm Beach, Florida

March 12, 2024

DISCOVERPALMBEACHCOUNTY,INC.

REPORTONAUDITOF FINANCIALSTATEMENTS

FortheYearsEnded September30,2023and2022

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561) 689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

INDEPENDENTAUDITOR’SREPORT

TotheBoardofDirectorsof

DiscoverPalmBeachCounty,Inc.

WestPalmBeach,Florida

Opinion

We have audited the accompanying financial statements of Discover Palm Beach County, Inc. (anot-for-profit corporation) which comprise the statements of financial position as of September 30, 2023and 2022, andthe relatedstatementsofactivities, cashflows, andfunctionalexpenses fortheyearsthenended,andtherelatednotestothefinancialstatements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Discover Palm Beach County,Inc., as of September 30, 2023 and 2022, and the changes in itsnet assets and its cash flowsfor the yearsthen ended in accordance with accounting principlesgenerallyacceptedinthe United States of America.

BasisofOpinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 Discover Palm Beach County, Inc. 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 forouraudit opinion.

ResponsibilitiesofManagementfortheFinancialStatements

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, and for the design, implementation, and maintenanceof internalcontrolrelevant to the preparation and fair presentation of financial statements that are free from material misstatement,whetherdue tofraud 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 Discover Palm Beach County, Inc.’s ability to continue as a going concern within one year after the date that thefinancialstatements areavailabletobeissued.

Auditor’sResponsibilitiesfortheAuditoftheFinancialstatements

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 opinion. 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 generally accepted auditing standards 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, including omissions, are considered material if there is a substantial likelihood that, individually or inthe aggregate,theywouldinfluencethejudgmentmadebyareasonable user basedonthe financialstatements.

In performinganaudit inaccordancewith generallyaccepted auditingstandards,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 amountsanddisclosuresinthefinancialstatements.

 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 Discover Palm Beach County, Inc.’s internalcontrol.Accordingly, nosuchopinionisexpressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentationofthefinancialstatements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Discover Palm Beach County, Inc.’s ability to continueasa goingconcernforareasonableperiodoftime.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit, significant audit findings, and certain internal controlrelatedmattersthat weidentifiedduringtheaudit.

ReportonSupplementaryInformation

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of functionalexpenses– contract and non-contract on page 17 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financialstatementsasawhole.

Holyfield & Thomas, LLC

WestPalmBeach,Florida

March13,2024

DISCOVER PALM BEACH COUNTY, INC.

LIABILITIES AND NET ASSETS

See accompanying notes to financial statements.

DISCOVER PALM BEACH COUNTY, INC. STATEMENTS OF ACTIVITIES

See accompanying notes to financial statements.

DISCOVER

See accompanying notes to financial statements.

DISCOVER PALM BEACH COUNTY, INC. STATEMENT OF FUNCTIONAL EXPENSES

See accompanying notes to financial statements.

DISCOVER PALM BEACH COUNTY, INC.

STATEMENT OF FUNCTIONAL EXPENSES For

See accompanying notes to financial statements.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies

Nature of Organization

Discover Palm Beach County, Inc. d/b/a Discover The Palm Beaches (the “Organization”) servesas Palm BeachCounty’stravelplanningresourcefordomesticandinternationaltravelers. Astheofficialdestination marketing organization charged with promoting Palm Beach County (the “County”) as a leisure travel and meetingsdestination,DiscoverThePalmBeachesplansandexecutesinitiativesinabroadrangeofareas includingsales,marketing,research,visitorservices,andindustryrelations.

Formed in 1983, Discover Palm Beach County, Inc. is a private, not-for-profit corporation funded primarily by the collection of the Palm Beach County tourist development tax, or “bed tax”, paid by lodging guests for short-term stays in Palm Beach County. The Organization’s mission is to increase visitation and contributetotheoveralleconomicdevelopmentinPalmBeachCounty.

Basis of Accounting

The financial statements of the Organization are prepared using the accrual basis of accounting whereas revenues are recognized when earned and expenses are recognized when incurred. This basis of accountingconformstoaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.

Financial Statement Presentation

The Organization’s financial statements are presented in accordance with FASB Accounting Standards Codification (FASB ASC) 958-205 Not-for-Profit Entities Presentation of Financial Statements. This standard requiresthe classification of the Organization’s Statements of Financial Position and Statements of Activities according to two classes of net assets: net assets without donor restrictions and net assets withdonorrestrictions:

Net assets without donor restrictions – this classification includes those net assets whose use is not restricted by donors, even though their use may be limited in other respects, such as by contract or by Board designation. Changes in net assets arising from exchange transactions (except income and gains on assets that are restricted by donors or by law) are included in net assetswithoutdonorrestrictions.

Net assets with donor restrictions – this classification includes those net assets whose use by the Organization has been limited by donors to either a later period of time, or after a specified date, or for a specified purpose. This classification also includes net assets that must be maintained by the Organization in perpetuity. Net assets with donor restrictions in perpetuity increase when the Organization receives contributions for which donor-imposed restrictions limiting the Organization’s use of an asset or its economic benefits neither expire with the passage of time nor can be removed by the Organization meeting certain requirements. As of the years ended September 30, 2023 and 2022, the Organization had no net assets with donor restrictions.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies,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 assetsand liabilities at the date ofthefinancialstatementsandthereported amounts ofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

Fair Value of Financial Instruments

FASB ASC Topic 820-10, Fair Value Measurements, establishes a framework for measuring fair value. This frameworkprovidesa fairvalue hierarchythat prioritizesthe inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs(Level3measurement).

ThethreelevelsofthefairvaluehierarchyunderFASBASCTopic820-10aredescribedbelow:

Level 1 –

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Organization has theabilitytoaccess.

Level 2 – Inputstothevaluationmethodology include:

 Quotedpricesforsimilarassetsorliabilities inactivemarkets;

 Quoted prices for identical or similar assets or liabilities in inactive markets;

 Inputs other than quoted prices that are observable for the asset or liability;

 Inputs that are derived principally from or corroborated by observable marketdatabycorrelationorothermeans.

 If the asset or liability has a specified (contractual) term, the Level 2 input mustbeobservableforsubstantially thefulltermof theasset orliability.

Level 3 –

Inputs to the valuation methodology are unobservable and significant to thefairvaluemeasurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used needtomaximizetheuse of observableinputsandminimizetheuse of unobservableinputs.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies,continued

Fair Value of Financial Instruments, continued

The following methods and assumptions were used by the Organization in estimating the fair value of financialinstrumentsthatwere notdisclosedunder FASBASCTopic820.

 Cash and cash equivalents, reimbursement, receivables, accounts payable, and accrued liabilities – The carrying amount reported approximates their fair values due to their short-termnature.

Thefollowingmethods andassumptionswereusedbytheOrganization inestimatingthefairvalueof financialinstrumentsthataremeasuredatfairvalue onarecurring basisunder FASBASCTopic820.

 Investments in and obligations under deferred compensation plan – consists of balanced mutualfundsmeasuredat net asset value (NAV)quoted by thecustodianas of the close of business. Theseinvestmentsare allmeasuredaccordingtoLevel1.

Cash and Cash Equivalents

The Organization considers cash held inchecking and short-term investments with original maturities of threemonthsor lesstobecashequivalents.

Reimbursement due from Palm Beach County

The Organization records contract reimbursements due from Palm Beach County as allowable expenses areincurred,approved,andbilled.Allamountsaredeemedfullycollectibleandnoallowanceisconsidered necessary.

Membership and Other Receivables

Membership and other receivables consist of amounts charged to local hotels and other local businesses for participation in the Organization’s advertising programs, all of which arecarried at net realizable value. The Organization provides an allowance for uncollectible accounts that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of September 30,2023and2022, therewasnoallowance foruncollectibleaccounts.

Inventory

Inventory consists of promotional items (not for sale), and is stated at the lower of cost (first-in, first-out method)ormarket.

Prepaid expenses

Prepaid expenses consist of expenses (generally deposits) for operations, sales, and marketing activities scheduledtooccursubsequenttotheyear-end.

Accrued Expenses

Accruedexpensesconsistofaccruedpayroll,relatedpayrolltaxes,andemployeebenefits.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies,continued

Deferred Revenue

Deferred revenue consists of contract income received for expenses paid for operations, sales, and marketing activities scheduledto occur subsequent to year-end. This categoryalso includes three months of membership revenue collected and deferred in connection the membership period which runs on a calendaryear.

Deferred Compensation Plan

TheOrganizationprovidesadeferredcompensation planasmorefullydescribedinNote4.Inaccordance with the terms of such arrangements, the fair value of plan assets is reported as both an asset subject to theclaimsofcreditorsandasaliabilitytotheplanbeneficiary.

County Contract Advance

In connection with the Organization’s administrative services and agency contract (further described in Note 3), Palm Beach County advanced the Organization $5,500,000 for use in facilitating vendor paymentsandotherworkingcapitalneeds,pendingreimbursementofrequestedexpenses.

Revenues and Support

 Contract income –isreceivedfromtheCountyona cost-reimbursementbasis. Revenuesfromthe contract are deemed earned and recognized in the statements of activities when expenses are incurredandapprovedforthepurposesspecified.

 Membership income – Partner membership benefits include listings on the Organization’s website, listings in the Organization’s official publications, access to partner events, and opportunities to participateintradeshowsandevents.Membershipincome isrecognizedasrevenuewhenearned overthemembershipperiod,whichisgenerallyoverthecalendaryear.

 Special promotional activity income – is revenue received from other organizations and individuals in order to participate in promotional events with the Organization. Special promotional activity incomeisrecognizedasrevenuewhenthetradeshoworotherpromotionaleventoccurs.

Donated Services and In-Kind Contributions

In accordance with FASB ASC 958-605, Revenue Recognition, the Organization records the value of those donated services and in-kind contributions that require specialized skills and that would typically needtobepurchasedifnotprovidedbydonation.Donatedservicesandin-kindcontributionsincludethose that create or enhance the Organization’s efforts to provide certain tourism, marketing, and sales-related programs to promote Palm Beach County, Florida as a tourist destination. These services are reflected in the financial statements at the date of receipt at their estimated fair market value as in-kind income and expenseintheperiodrendered.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies,continued

Donated Services and In-Kind Contributions, continued

During the years ended September 30, 2023 and 2022, the Organization received donated services and in-kindcontributions, such asreceptionsandroom accommodationsfor clients andgroupsand other noncashcontributions,whicharerecordedasdonatedservicesandin-kindcontributionsattheirestimatedfair value at the date of donation. During the years ended September 30, 2023 and 2022, the total amount of in-kind contributions and donated services received amounted to approximately $3,388,000 and $2,716,000,respectively.SeeNote5formoredetails.

Expenses

Thecosts ofprovidingthevariousprogramsandotheractivitieshave been detailedinthestatements of functional expenses and summarized on a functional basis in the statements of activities. Expenses associated with a specific program are charged directly to that program. Expenses which benefit more thanoneprogramareallocated basedontherelative benefit provided.

Advertising

The Organization expenses the cost of advertising as incurred. During the years ended September 30, 2023 and 2022, the Organization incurred approximately $18,020,000 and $13,037,000, respectively, in advertising costs, which are reported as marketing - advertising in the statements of functional expenses. Ofsuchamounts,donatedservicesrepresentapproximately$3,207,000and$2,467,000,respectively.

Compensated Absences

The Organization has a policy to accumulate unused vacation up to a maximum of 192 hours on accrual earning levels. All accumulated vacation leave must be used in the following year with no carryover. Sick leave may be accumulated up to a maximum of 60 days (480 hours) and carried indefinitely, but is not paid out for other than sick time under any circumstances. Accumulated unpaid vacationbenefitsareaccruedasa liability and chargedto expense.

Reclassifications

Certain accounts in the prior year financial statements may have been reclassified in order to conform withthecurrent yearfinancialstatementpresentation.

Income Taxes

The Organization is exempt from federal and state income taxes under Section 501(c)(6) of the Internal Revenue Code of 1986 and Chapter 220.13 of Florida Statutes. However, income from certain activities not directly related to the Organization's tax-exempt purpose is subject to taxation as unrelated business income. Management does not believe that the Organization engaged in any unrelated business activities during the years ended September 30, 2023 and 2022, and accordingly there is no provision forincometaxesreflectedintheaccompanyingfinancialstatements.

FortheYearsEndedSeptember30,2023and2022

1. SummaryofSignificantAccountingPolicies,continued Income Taxes, continued

The Organization follows FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. This pronouncement seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. It prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position that an entity takes or expects to take in a tax return. An entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. The Organization assesses its income tax positions based on management’sevaluationofthefacts,circumstancesandinformationavailableatthereportingdate.

TheOrganizationusesthe prescribedmore likelythan notthreshold whenmaking itsassessment. Forthe years ended September 30, 2023 and 2022, the Organization did not accrue any interest expense or penaltiesrelatedtotaxpositions,andtherearenoopenFederalorStatetaxyearscurrentlyunderaudit.

Recently Adopted Accounting Pronouncements

As of October 1, 2021, the Organization adopted the provisions of FASB ASU 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. Thepurposeofthestandardistoclarifythepresentationanddisclosureofcontributednonfinancial assets with an intention to provide the reader of the financial statements a clearer understanding of what typeofnonfinancialassetswerereceivedandhowtheyareusedandrecognizedbythenot-for-profit.

Recent Accounting Policies

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their statement of financial position as “right of use assets” with corresponding liabilities. The Organization didnot haveanyleaseforthe yearsendingSeptember30, 2023 and2022.

2. LiquidityandAvailabilityofResources

Financial assets available for general expenditure within one year, that is, without donor restrictions or otherrestrictionslimitingtheirusecomprisethefollowing:

FortheYearsEndedSeptember30,2023and2022

2. LiquidityandAvailabilityofResources,continued

The Organization receives significant revenue from a Palm Beach County contract, which typically covers over 90% of its operating expenditures on a direct reimbursement basis. The Organization regularly monitors liquidity required to meet its operating needs and other contractual commitments. The related resources have been included in the quantitative information detailing the financial assets availabletomeet generalexpenditureswithin oneyear.

3. TransactionswithPalmBeachCountyandEconomicDependency

The Organization and the County entered into an agreement for administrative services commencing on October 1, 2022 and expiring on September 30, 2027. The contract provides that the Organization will perform or administer various functions such as advertising, public relations, tour package development, consumer and trade shows, destination reviews, foreign representation, and other projects and promotional services to assist the County in its tourism promotion effort. Expenses made by the Organization under the contract are subject to budgetary approval by the County and must be consistent with the County’s Tourist Development Plan. For the years ended September 30, 2023 and 2022, the contract budget was $14,397,527 and $13,535,896, which includes the County direct expenses (i.e., “inkind contributions”) totaling $180,437 and $248,896, respectively. The Organization has also received a CountyContractforfiscalyear2024intheamountofapproximately$27,212,286ofwhich$311,471willbe Countydirectexpense.

On behalf of the Organization, the County provided office space and directly paid communication and certain advertising expenses, which totaled approximately $180,000 and $249,000 for the years ended September 30, 2023 and 2022, respectively. This amount is included in Contract Income, Palm Beach County in the statements of activities and is reported according to natural and functional classifications in the statements of activities and statements of functional expenses. In addition, the County provides the Organizationwithallfurniture,fixtures,andequipmentnecessaryforitsoperations.

Management believes the Organization has sufficient planned revenues from the agreement with the Countytooperateandfulfillits mission. Therevenueprovided under contracts with PalmBeachCounty amounted to approximately $26,900,000 and $20,900,000, which represents 87% and 87% of the Organization’s total revenue, respectively, for the years ended September 30, 2023 and 2022. The loss of this agreement could have a negative impact upon the Organization. In addition, for the years ended September 30, 2023 and 2022, the County owed the Organization approximately $5,032,000 and $4,985,000, respectively, for costsrelatedtothiscontract.

In connection with the County contract, the Organization submits requests for reimbursement of allowable payments and expenditures and records the corresponding revenue as the request is approved and paid. Subsequent adjustments made in accordance with US GAAP to certain payments and expenditures may often create timing differences between the contract utilization according to the County and the amounts reported in these financial statements. The fiscal year-end amounts and relatedadjustmentsaresummarizedasfollows:

*Reconcilingitems include accrualbasistransactions.

FortheYearsEndedSeptember30,2023and2022

4. RetirementPlans

The Organization has a defined contribution plan, which provides retirement benefits for substantially all employeesmeeting certain eligibilityrequirements. Employeesareeligibleafter one year of service. There arenomatchingcontributionsfromtheOrganization.TheOrganizationmaymakecontributionstotheplan consisting of a 3% Safe Harbor contribution and a discretionary contribution not to exceed 9.17% of the employee’s actual salary. Employees are immediately vested in the Safe Harbor contribution and fully vested in any discretionary contributions after three years of service with the Organization. Contributions for the years ended September 30, 2023 and 2022 totaled approximately $481,000 and $386,000, respectively.

In addition, the Organization has a deferred compensation retirement plan, which provides retirement benefits for certain of its key employees. Under the plan, employees are allowed to defer amounts of compensation up to the maximum allowable IRS limits. There are no matching contributions from the Organization. The Organization may make discretionary contributions to the plan. During the years ended September30, 2023and2022,theOrganizationmadenodiscretionarycontributionstothisplan.Fundsof the plan are invested in mutual funds as directed by the employee. These funds had a fair value of approximately$246,400and$200,300atSeptember30,2023and2022,respectively.

FortheyearsendedSeptember30, 2023and2022,theOrganizationdidnotincuradministrativecostsfor eitherplan.

5. In-KindContributions

Contributedgoodsandservices arereflectedasdonatedservicesandin-kind contributionssupport and expenses in the accompanying financial statements. The products and professional services are recorded at their estimated fair value. On behalf of the Organization, the County directly paid approximately $145,700 and $145,700 of administrative expenses, $19,500 and $21,500 of inspector general expenses, and $15,200 and $19,200 of technology support expenses for the years ended September 30,2023and2022, respectively.

In addition, the Organization recognized approximately $3,207,500 and $2,467,000 of advertising, promotion, and consulting as donated services, for the years ended September 30, 2023 and 2022, respectively. These amounts primarily include co-op advertising with sports fundraisers and international airlines, and are recognized as support, under the caption of donated services in the statements of activities, and as marketing – advertising in the statement of functional expenses. Advertising and promotion are valued based on prices of advertising time and/or space. Consulting services are value basedonthepriceoftheservicesprovided.

6. ConcentrationofCreditRisk

The Organization maintains its cash and cash equivalents in one qualified public depository pursuant to Florida State Statute, Chapter 280, Florida Security for Public Deposits Act, and are covered by either federaldepositoryinsuranceorcollateralheldbytheChiefFinancialOfficerofFlorida.

Any lossesto publicdepositorsare covered by applicable deposit insurance, sale of securities pledged as collateral, and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. Management believes the Organization is not exposed to any significant credit riskonitsdeposits.

FortheYearsEndedSeptember30,2023and2022

7. Subsequent Events

Management has evaluated subsequent events through March 13, 2024, the date on which these financial statements were available to be issued, and determined that they were no further disclosures required in these financial statements.

DISCOVER PALM BEACH COUNTY, INC.

SCHEDULE OF FUNCTIONAL EXPENSESCONTRACT AND NON-CONTRACT

See accompanying notes to financial statements.

Cultural Council For Palm Beach County

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

To the Board of Directors and Management of Cultural Councilof Palm Beach County, Inc.

Lake Worth Beach, Florida

InplanningandperformingourauditofthefinancialstatementsofCulturalCouncilofPalmBeachCounty, Inc. (the “Organization”) as of and for the year ended September 30, 2023, in accordance with auditing standardsgenerally acceptedintheUnitedStatesofAmerica, weconsideredtheOrganization’sinternal 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 opinion on the financial statements, butnotforthepurposeofexpressinganopinionontheeffectivenessoftheOrganization’sinternalcontrol. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control.

Definitions Related to Internal Control Deficiencies

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 detectandcorrect,misstatementsonatimelybasis.A materialweakness isadeficiencyoracombination of deficiencies in internalcontrol,suchthat there is a reasonable possibility that amaterial misstatement of the Organization’s financial statements will not be prevented, or detected and corrected, on a timely basis.

Our Responsibilities

Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphandwas notdesignedtoidentifyalldeficienciesininternalcontrolthatmightbematerialweaknesses.Giventhese limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weakness may exist that have not been identified.

This communication is intended solely for the information and use of management, those charged with governance and others within the Organization, and is not intended to be and should not be used by anyone other than thesespecified parties.

Holyfield & Thomas, LLC

West Palm Beach, Florida

January 16, 2024

CULTURALCOUNCILOF PALMBEACHCOUNTY,INC.

REPORTONAUDITOF FINANCIALSTATEMENTS

FortheYearEndedSeptember30,2023 (withcomparabletotalsfor2022)

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

TotheBoardofDirectorsof CulturalCouncilofPalmBeachCounty,Inc.

LakeWorthBeach,Florida

ReportontheAuditoftheFinancialStatements

Opinion

We have audited the accompanying financial statements of Cultural Council of Palm Beach County, Inc., (a Florida nonprofit corporation), which comprise the statement of financial position as of September30,2023, andtherelatedstatementsofactivities,cashflows,andfunctionalexpensesfor theyearthenended,andtherelatednotestothefinancialstatements.

In our opinion, the financial statements present fairly, in allmaterial respects, the financial position of Cultural Council of Palm Beach County, Inc., as of September 30, 2023, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally acceptedintheUnitedStatesofAmerica.

BasisforOpinion

WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesof Americaandthestandardsapplicabletofinancialauditscontainedin Government Auditing Standards, issuedbytheComptrollerGeneralof theUnitedStates.Ourresponsibilitiesunderthosestandardsare furtherdescribedintheAuditor’sResponsibilitiesfortheAuditoftheFinancialStatementssectionofour report.WearerequiredtobeindependentofCulturalCouncilofPalmBeachCounty,Inc.andtomeetour otherethicalresponsibilities,inaccordancewiththerelevantethicalrequirementsrelatingtoouraudit.We believethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforour auditopinion.

Management’sResponsibilityfortheFinancialStatements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentationof financialstatementsthat arefreefrommaterialmisstatement, whetherduetofraudor error.

Inpreparingthefinancialstatements,managementisrequiredtoevaluatewhetherthereareconditions or events, considered in the aggregate, that raise substantial doubt about Cultural Council of Palm Beach County, Inc.’s ability to continue as a going concern within one year after the date that the financialstatementsareavailabletobeissued.

Auditor’sResponsibilityfortheAuditoftheFinancialStatements

Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawhole arefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthat includesouropinion.Reasonableassuranceisahighlevelofassurancebutisnotabsoluteassurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement whenitexists.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanfor one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,ortheoverrideofinternalcontrol.Misstatementsareconsideredmaterialifthereis asubstantiallikelihoodthat, individuallyor intheaggregate, theywouldinfluencethejudgmentmade byareasonableuserbasedonthefinancialstatements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards,we:

 Exerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.

 Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherdue to fraud or error, and design and perform audit procedures responsive to those risks. Such proceduresincludeexamining,onatestbasis,evidenceregardingtheamountsanddisclosures inthefinancialstatements.

 Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressingan opinion on the effectiveness of the Cultural Council of Palm Beach County, Inc.’s internal control.Accordingly,nosuchopinionisexpressed.

 Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofsignificant accountingestimatesmadebymanagement,aswellasevaluatetheoverallpresentationofthe financialstatements.

 Concludewhether,inourjudgment,thereareconditionsorevents,consideredintheaggregate, that raise substantial doubt about the Cultural Council of Palm Beach County, Inc.’s ability to continueasagoingconcernforareasonableperiodoftime.

Wearerequiredtocommunicatewiththosechargedwithgovernanceregarding,amongothermatters, theplannedscopeandtimingoftheaudit,significantauditfindings,andcertaininternalcontrolrelated mattersthatweidentifiedduringtheaudit.

OtherReportingRequiredby GovernmentAuditingStandards

Inaccordancewith Government Auditing Standards,wehavealsoissuedourreportdatedJanuary__, 2024, on our consideration of Cultural Council of Palm Beach County, Inc.’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,andgrantagreementsandothermatters.Thepurposeofthatreportistodescribethescope ofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting, andnottoprovideanopiniononinternalcontroloverfinancialreportingoroncompliance.Thatreport is an integral part of an audit performed in accordance with Government Auditing Standards in consideringCulturalCouncilofPalmBeachCounty,Inc.’sinternalcontroloverfinancialreportingand compliance.

ReportonSummarizedComparativeInformation

We have previously audited the Cultural Council of Palm Beach County, Inc.’s 2022 financial statements,andweexpressedanunmodifiedauditopinioninourreportdatedJanuary11,2023.Inour opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2022, isconsistent, inallmaterialrespects,withtheauditedfinancialstatementsfrom whichithasbeenderived.

Holyfield & Thomas, LLC

WestPalmBeach,Florida

January16,2024

CULTURAL COUNCIL OF PALM BEACH COUNTY, INC.

As of September 30, 2023

STATEMENT OF FINANCIAL POSITION

(with comparable totals for 2022)

Without DonorWith Donor20232022 RestrictionsRestrictionsTotalsTotals ASSETS

LIABILITIES AND NET ASSETS

See accompanying notes to financial statements.

CULTURAL COUNCIL OF PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2023

STATEMENT OF ACTIVITIES

(with comparable totals for 2022)

Without DonorWith Donor20232022

See accompanying notes to financial statements.

CULTURAL COUNCIL OF PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2023

STATEMENT OF CASH FLOWS

(with comparable totals for 2022) 20232022

See accompanying notes to financial statements.

CULTURAL COUNCIL OF PALM BEACH COUNTY, INC.

STATEMENT OF CASH FLOWS

(with comparable totals for 2022) 20232022

See accompanying notes to financial statements.

CULTURAL COUNCIL OF PALM BEACH COUNTY, INC. For

See accompanying notes to financial statements.

Supporting Services

STATEMENT OF FUNCTIONAL EXPENSES

(with comparable totals for 2022)

See accompanying notes to financial statements.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies Organization

Cultural Council of Palm Beach County, Inc. (the "Council") is anot-for-profit corporation whose main goalistopromotevisualandperformingartsandculturalactivitiesinPalmBeachCounty,Florida(the "County"). The Council commits its energies and resources to supporting the establishment of new cultural institutions, enhancing existing organizations, and encouraging opportunities for individual artists. The Council reviews applications for and monitors the use of certain funds provided by the TouristDevelopmentCouncil("TDC").

Basis of Presentation and Method of Accounting

The accompanying financial statements of the Council have been prepared on the accrual basis of accounting, whereby revenues and support are recognized when earned, and expenses when the corresponding liability is incurred. This basis of accounting conforms to accounting principles generally acceptedintheUnitedStatesofAmerica.

Financial Statements Presentation

The accompanying financial statements have been prepared on the accrual basis of accounting in conformity with the disclosure and display requirements of the Financial Accounting Standards Board (FASB) as set forthunder FASB Accounting Standards Codification (FASB ASC)958-205 Not-for-Profit Entities, Presentation of Financial Statements. Accordingly,thenetassetsoftheCouncilarereportedin eachofthefollowingclasses:

Net assets without donor restrictions –thisclassificationincludesthosenetassetswhoseuseis not restricted by donors, even though their use may be limited in other respects, such as by contract or by Board designation. Changes in net assets arising from exchange transactions (exceptincomeandgainsonassetsthatarerestrictedbydonorsorbylaw)areincludedinnet assetswithoutdonorrestrictions.TheCouncilreleasesanypurposerestrictionswhentheasset isplacedinservicefortheusestipulatedbythedonor.

Net assets with donor restrictions –thisclassification includesthosenetassetswhoseuse by theCouncilhasbeenlimitedbydonorstoeitheralaterperiodoftime,orafteraspecifieddate, orforaspecifiedpurpose. Thisclassificationalsoincludesnetassetsthatmustbemaintained bytheCouncilinperpetuity.Netassetswithdonorrestrictionsinperpetuityincreasewhenthe Councilreceivescontributionsforwhichdonor-imposedrestrictionslimitingtheCouncil’suseof anassetoritseconomicbenefitsneitherexpirewiththepassageoftimenorcanberemovedby theCouncilmeetingcertainrequirements.

Estimates

Management uses estimates and assumptions in preparing financial statements in conformity with accounting principles generally accepted in the United States of America. Those estimates and assumptionsaffectthereportedamountsofassetsandliabilities,thedisclosureofcontingentassetsand liabilities,andthereportedrevenueandexpenses.Actualresultscouldvaryfromtheestimatesthatwere used.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies,continued

Fair Value of Financial Instruments

The Council follows FASB ASC 820, Fair Value Measurement. This standard defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and requires expanded disclosures about fair value measurementsoffinancialinstruments.

The standard also establishes a hierarchyfor inputs used inmeasuringfair valuethat maximizes the use of observable inputs when available. Observable inputs are those that market participants would useinpricingtheassetorliabilitybasedonthebestinformationavailableinthecircumstances.

Thefairvaluehierarchygivesthehighestprioritytoquotedpricesinactivemarketsforidenticalassets orliabilities(Level1)andlowestprioritytounobservableinputs(Level3).Ifinputsusedtomeasurethe financial instruments fall within different levels of the hierarchy, the categorization is based on the lowestlevelofinputthatissignificanttothefairvaluemeasurementoftheinstrument.

Thethreelevelsofthefairvaluehierarchyaredescribedbelow:

Level1– Inputsthatutilizequotedprices(unadjusted)inactivemarketsforidenticalassetsor liabilitiesthattheCouncilhastheabilitytoaccess.

Level2– Inputsthatincludequotedpricesforsimilarassetsandliabilitiesinactivemarketsand inputs that are observable for the asset or liability, either directly or indirectly, for substantiallythefulltermofthefinancialinstrument.Fairvaluesfortheseinstruments areestimatedusingpricingmodelsorquotedpricesofassetsandliabilitiesofsimilar characteristics.

Level3– Inputsthatareunobservablefortheassetsorliabilities,whicharetypicallybasedon anentity’sownassumptions,asthereislittle,ifany,relatedmarketactivity.

Theasset’sorliability’sfairvaluemeasurementlevelwithinthefairvaluehierarchyisbasedonthelowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximizetheuseofobservableinputsandminimizetheuseofunobservableinputs.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of checking, and money market accounts at federally charteredbanks.Forpurposesofthestatementofcashflows,allhighlyliquidinvestmentswithamaturity ofthreemonthsorlesswhenpurchasedarealsoconsideredtobecashequivalents,exceptforcashand money market balances held within the investment portfolio and as reported as part of the investment category.CashequivalentsincludeBoarddesignatedcash.

Investments

Investmentsincludeindividualpubliclytradedequitiesandcashequivalents.TheCouncilcontractswith investmentmanagerstoperformongoinginvestmentfunctionsandinvestmentperformancemonitoring, andinvestsaccordingtotheguidelinesthatareestablishedbytheCouncil'sCommitteeandapproved bytheBoardofDirectors.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies,continued Investments, continued

Purchasesandsalesofinvestmentsarerecordedonatrade-datebasis.Interestincomeisrecordedon theaccrualbasis.Dividendsarerecordedontheex-dividenddate.Realizedgainsorlossesonthesale of marketable securities are calculated using the specific-identification method. Change in unrealized gains andlossesrepresentsthechangeinthefair valueof theindividualinvestmentsfortheyear,or since the acquisition date, if acquired during the year. Investments are stated at fair value based on quotedmarketpriceswithinactivemarkets.Investmentincomeandgainsarereportedasincreasesinnet assetswithoutdonorrestrictions.

Receivables

 Grants receivable –consistofgrantreimbursementsduefromPalmBeachCountyandtheTDC.

 Pledges receivable – consist of pledges (unconditional promises to give) from members of the Council's Board of Directorsandfrom donorsformajor Gifts, andotherprograms. Pledgesare recorded when the promise is made. Pledges expected to be collected within one year are recorded at their net realizable value. Pledges expected to be collected in future years are initially recorded at fair value using the present value of their estimated future cash flows. The discountsonthoseamountsarecomputedusinganinterestrateapplicabletotheyearsinwhich the promises are received (see Note 6), with the annual change in discount included in contributionincomeinthestatementofactivities.

An allowance for doubtful accounts is provided for receivables for which there is a question as to ultimatecollectability.Uncollectibleaccountsarereservedforwhenmanagementhasdeterminedthat theamountwillnotbecollected.AsofSeptember30,2023,noallowancewasdeemednecessary,as allreceivablesaredeemedcollectible.

Prepaid Expenses

Asapartofitsnormaloperations,theCouncilpayscertainexpensesincludinginsurance,postage,utility, anddepositspriortotheactualuseofthoseassets.Suchamountsarerecordedasprepaidexpensesin thestatementoffinancialpositionandarerecognizedasexpenseasthebenefitisrealized.

Property and Equipment

Property and equipment is stated at cost, at the date of purchase, or fair value at the date of the donation. All purchases with a cost of $2,500 or more and a useful life in excess of one year are capitalized.Depreciationiscomputedusingthestraight-linemethodovertheestimatedusefullivesof theassetsrangingbetween3-39years.

In 2010, the Council received a donation of land and building (i.e., Montgomery Building), valued at $1,350,000 for use as its primary location. The Council reports these donated assets as net assets withoutdonorrestrictionsbecausethedonatedassetswereappropriatelyplacedinserviceasspecified bythedonor.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies,continued

Accrued Expenses

AsofSeptember30,2023,theCouncil'saccruedexpensesincludecostsofaccruedemployeebenefits andvariousotherexpenses.

Contract Reserve

In connection with the Council’sadministrativeservices and agency contract (see Note 5), Palm Beach CountyadvancedtheCouncil$1,000,000foruseinfacilitatingvendorpaymentsandotherworkingcapital needs,pendingreimbursementofrequestedexpensesandreplenishmentofthereserveaccount.

Revenue Recognition

Contributions, including unconditional promises to give, are recognized as revenue when the donor's commitmentisreceived.TheCouncilfollowstheguidanceofFASBASC958-605, Revenue Recognition. Contributions received are recorded as with or without donor restrictions depending on the existence and/ornatureofanydonorrestrictions.Allcontributionsareconsideredavailablewithoutdonorrestriction useunlessspecificallyrestrictedbythedonor.

Under this standard, contributions that are initially restricted as to time or purpose are required to be reportedaswithdonorrestrictionssupportandarelaterreclassifiedtonetassetswithoutdonorrestrictions uponexpirationofthetimeorpurposerestriction.Iftherestrictionplaceduponacontributionismetwithin thesameaccountingperiodasthereceiptofthecontribution,thestandardpermitsthecontributiontobe reportedwithoutdonorrestrictions.

TheStateofFlorida–LocalArtsAgencyprovidestheCouncilwithprogramfundingthatistobe used for program and/or supporting services. The Council recognizes revenue from grants in the period in whichtheamountsareearned.

CountyContract–Countyincomeisonacostreimbursementbasis.RevenuefromtheCountycontract is deemed earned and recognized in the statement of activities when reimbursement invoices are submittedtotheCountyforspecifiedexpenditures.

Revenues from the State of Florida – Specialty License Plate Program are considered contributions that are recorded as net assets with donor restrictions. These contributions and expenditures were madeinaccordancewithFloridaStatutes§320.08056and§320.08058.AsofSeptember30,2023,the Council received approximately $36,100 of its revenue from the State of Florida – Specialty License PlateProgram.

Functional Allocation of Expenses

ThecostsofprovidingthevariousservicestheCounciloffershavebeensummarizedonafunctionalbasis in the statement of activities. Expenses directly attributableto a specificfunctionalarea arereported as expenses of those functional areas. Other expenses are allocated among programs and supporting servicesbasedoneithertherelativesalariesincurredorrelativesquarefootageoccupancyoftheprogram inrelationtothetotalsquarefootageofthebuilding.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies,continued In-Kind Contributions

 Contributed Property –Contributionsofpropertyarerecordedassupportattheirestimatedfair value at the date of donation. Such contributions are reported as support without donor restrictions unless the donor has restricted the use of the contributed asset to a specific purpose. Assets contributed with explicit restrictions regarding their use and contributions of cashthat must be usedto acquire propertyandequipment are reportedas restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Council reports expirations of donor restrictions when the contributed or acquired assets are placedinserviceasinstructedbythedonorandreclassifiesnetassetswithdonorrestrictionsto netassetswithoutdonorrestrictions.

 Contributed Services – The Council follows the guidance of FASB ASC 958-605, Revenue Recognition,fortheaccountingofcontributedservices.Inaccordancewiththisguidance,donated servicesarerecognizedascontributionsiftheservices(a)createorenhancenonfinancialassets or(b)requirespecializedskills,areperformedbypeoplewiththoseskills,andwouldotherwisebe purchasedbytheCouncil.Theseservicesarereflectedinthefinancialstatementattheirestimated fair market value on their date of receipt. Generally, contributed services that do not satisfy the criteriaandarenot recognized inthefinancialstatements. However, certain operating expenses arepaidonbehalfoftheCouncilasdescribedinNote13.

Store and Gallery Sales

The Councilmaintains aretailstoreto promotethe worksof localartistsandvendors. These itemsare heldonconsignmentandthereforearenotrecordedontheCouncil’sfinancialstatements.Salesderived fromthestoreandgalleryarerecognizedasrevenuewhensoldandtotaledapproximately$45,700forthe year ended September 30, 2023. Commissions tothe artists and related costs to cultural organizations amountedtoapproximately$33,000forthesamefiscalperiod.

Advertising

Advertising costs are expensed when incurred. Total advertising expense for the year ended September30,2023was$3,000,847andisreflectedunderagency,advertising,andmarketinginthe statementoffunctionalexpenses.

Tax Status

The Council is a Florida not-for-profit corporation, other than a private foundation, pursuant to Internal RevenueCodeSection501(c)(3)and,assuch,isnotrequiredtopayincometaxesonitsexemptfunction income.However,incomefromcertainactivitiesnotdirectlyrelatedtotheCouncil'stax-exemptpurposeis subjecttotaxationasunrelatedbusinessincome.FortheyearendedSeptember30,2023,management doesnotbelievetheCouncilhasanyliabilitywithrespecttounrelatedbusinessactivities,andthereforeno provisionforincometaxeshasbeenmade.

FortheYearEndedSeptember30,2023

1. BusinessandSummaryofSignificantAccountingPolicies,continued Tax Status, continued

The Council follows the guidance of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes, which seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. This standard prescribes a recognition threshold and measurementattributeforfinancialstatementrecognitionandmeasurementofataxpositionthatanentity takesorexpectstotakeinataxreturn.Anentitymayonlyrecognizeorcontinuetorecognizetaxpositions that meet a “more likely than not” threshold. The Council assesses its income tax positions based on management’s evaluation of the facts, circumstances, and information available at the reporting date. ManagementdoesnotbelievethattheCouncilhasanysignificantuncertaintaxpositionsthat wouldbe material to the financial statements. Furthermore, there are no Federal or State open-year tax returns underaudit.

Recently Adopted Accounting Policies

AsofOctober1,2022,theOrganizationadoptedthenewFASBAccountingStandardsUpdate(ASU) 2016-02, Leases (Topic 842), and ASU 2018-11, Leases (Topic 842) – Targeted Improvements. The new standards replaced existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. Under the new guidance, leases with termsof more than 12months arerequired tobe recognized inthe statement of financial position as liabilities,withacorresponding“right-of-use”asset.

Comparable Financial Information

Thefinancialstatementsincludecertainprioryearsummarizedcomparativeinformationintotalbutnotby net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, suchinformationshouldbereadinconjunctionwiththeCouncil’sfinancialstatementsfortheyearended September 30, 2022, fromwhich the summarized information wasderived. Certain 2022 amounts may have been reclassified to conform to 2023 classifications with no effect on the previously reported changeinnetassets.

2. LiquidityandAvailabilityofResources

Financialassetsavailableforgeneralexpenditurewithinoneyear,thatis,withoutdonorrestrictionsor otherrestrictionslimitingtheirusecomprisethefollowing:

FortheYearEndedSeptember30,2023

2. LiquidityandAvailabilityofResources,continued

The Council regularly monitors liquidity required to meet its operating needs and other contractual commitments. The Council has various sources of liquidity at its disposal, including cash and investmentsdesignatedbytheboardforcontingenciesplusa$250,000lineofcredit,allofwhichmay bedrawnuponintheeventofunanticipatedfinancialdistressoranimmediateliquidityneed.Partofthe Council’sliquiditymanagementplanistoinvestcashinexcessofthemonthlyrequirementsintoshortterminvestments.

The Council receives significant revenue from a contract with Palm Beach County which typically coversover75%ofitsoperatingexpendituresonadirectreimbursementbasis.Italsoreceivesgrants andotherprivatedonations,someofwhichhavedonorrestrictionstobeusedinaccordancewiththe purpose of the restrictions, typically program costs that fulfill the mission of the Council. Because a donor’s restriction requires resources to be used in a particular manner or in a future period, the Council must maintain sufficient resources to meet those responsibilities to its donors. Some of the Council’s net assets with donor restrictions are available for general expenditure within one year of September30,2023becausetherestrictionsonthenetassetsareexpectedtobemetbyconducting thenormalprogramactivitiesoftheCouncilinthecomingyear.Accordingly,therelatedresourceshave been included in the quantitative information detailing the financial assets available to meet general expenditureswithinoneyear.

3. FairValueMeasurements

ThefollowingmethodsandassumptionswereusedbytheCouncilinestimatingthefairvalueoffinancial instrumentsthatwerenotdisclosedunderFASBASCTopic820.

 Cash equivalents –Thecarryingamountreportedapproximatesfairvalue.

 Grants, contributions, and other receivable – The carrying amount approximates fair value duetotheshorttermofthereceivables.

 Pledges receivable –Valuedatthepresentvalueoftheestimatedfuturecashflowusingan approximatediscountrateof1.0%.

 Accounts payable, accrued expenses, and grants payable –Thecarrying amountreported approximatesfairvalueduetotheshort-termdurationoftheinstruments.

 Lease obligations – The recordedvalue approximatesfair value, astheapplicable interest rateapproximatescurrentmarketrates.

ThefollowingmethodsandassumptionswereusedbytheCouncilinestimatingthefairvalueofassets that aremeasured at fair valueon a recurring basis under FASBASC Topic 820. There have been no changesinthemethodologiesusedasofSeptember30,2023.

 Exchange traded funds (ETFs)- fixed income, US & international equity – valued at the quoted market price by the custodian as of the last business day of the year.

 Beneficial Interest in Trust –Valuedatlevel3basedontheCouncil’sshareofthefairvalueof theassetsthatareheldbythecustodian,whichprovidesaperpetualstreamofincometothe Council.

FortheYearEndedSeptember30,2023

3. FairValueMeasurements,continued

Thefollowingtablesetsforthbylevel,withinthefairvaluehierarchy,theCouncil’sassetsatfairvalue asofSeptember30,2023:

Level3GainsandLosses

The table below sets forth a summary of changes in the fair value of the Council’s Level 3 asset, beneficialinterestintrust,fortheyearendedSeptember30,2023.

FASBASC820-10requiresdisclosureofquantitativeinformationabouttheunobservableinputsusedto measureLevel3assetsandliabilities.ThefollowingtableprovidesinformationaboutLevel3assets:

4. Endowments

FASBASC958, Not-for-Profit Entities, Presentation of Financial Statements,providesguidanceonthe net asset classification of donor-restricted endowment funds for a not-for-profit organization that is subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA) and improves disclosures about an organization’s endowment funds (both donor-restricted endowmentfundsandBoard-designatedendowmentfunds),whetherornottheorganizationissubject toUPMIFA.

The State of Florida adopted the Florida Uniform Prudent Management of Institutional Funds Act (FUPMIFA),whichprovidesa)consistentinvestmentandspendingstandardstoallformsofcharitable funds,b)strengthenstheconceptofprudent investing,c)abandonshistoricdollarvalueasafloorfor expenditures and provides more flexibility to the organization in making decisions about whether to expendanyportionofanendowmentfund,andd)providesaprocessforthereleaseormodificationof restrictionsona gift instrument. The adoption bythe Councilofthe provisions ofthe newlaw didnot haveasignificantchangeinitsmanagementandinvestmentpoliciesofendowments.

FortheYearEndedSeptember30,2023

4. Endowments,continued

Asaresultofthisinterpretation,theCouncilclassifiesasnetassetsrestrictedinperpetuitybydonor(a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is addedtothefund.Theremainingportionofthedonor-restrictedendowmentfundthatisnotclassified as net assets restricted in perpetuity by donor is classified as net assets restricted for a specific purpose by donor until those amounts are appropriated for expenditure by the Council in a manner consistentwiththestandardofprudence.

Objectives

Generally,theendowmentfundsareusedtofurtherthemissionoftheCouncil.Endowmentfundsare usedtoprovidesufficientliquiditytosupportongoingoperationsoftheCouncil,providefundsforcapital expendituresasmayberequiredfromtimetotime,launchnewinitiatives,andbuildanendowmentthat willgenerateincomethatmaybeusedforgeneraloperationsandsupporttheprogramsoftheCouncil. Donorrestrictedendowmentfundswillbeusedforthepurposesdesignatedbythedonors’restrictions.

Investment Principles

Investments shall be made solely in the best interest of the Council. The endowment funds shall be investedwithcare,skill,prudenceanddiligenceunderprevailingcircumstances,thataprudentperson acting in like capacity and familiar with such matters would use in the investment of an organization similartotheCouncil.

The Investment Committee is responsible for the oversight and management of the Council’s endowment funds, adhering to the limitations established for each endowment. Investments of the endowment funds shall be diversified to minimize the risk of large losses resulting from overconcentration of funds in a specific maturity, issue or type/class of securities. In managing the endowmentfunds,theInvestmentCommitteewillconsiderthefollowingfactors,ifrelevant:

 Generaleconomicconditions;

 Possibleeffectofinflationordeflation;

 Roleofeachinvestmentwithintheoverallinvestmentportfolio;

 Expectedreturn(incomeand/orappreciation);

 TheCouncil’sotherresources;

 Needtomakedistributionsforoperatingfunds,needtopreservecapital;

 AnyspecialvalueanassetmayholdforbenefittotheCouncil;and

 Totheextentapplicable,anyexpectedtaxconsequencesofdecisionorstrategies.

The Council’s endowment net asset composition by type as of September 30, 2023 consisted of the following:

FortheYearEndedSeptember30,2023

4. Endowments,continued

ChangesintheendowmentnetassetsfortheyearendedSeptember30,2023,andthereconciliationto theCouncil’snetassetcategoriesispresentedasfollows:

Spending Policy

TheCouncil’sBoardshallannuallydeterminetheamount,ifany,offundstobeallocatedfromBoardDesignatedand/orDonorRestrictedEndowmentfundstoworkingcapitalorcapitalreserves,provided that any such allocation is consistent with endowment restrictions. During the year ended September 30,2023,therewerenodistributionsmadefromtheendowment.

5. ContractwithPalmBeachCounty

TheCouncilannuallyentersintoanadministrativeservicesandagencycontractwiththeCounty.The contractprovidesthattheCouncilwillperformandadministervariousprogramservicessuchasgrants administration, marketing administration, and marketing and advertising with funds provided by the TDC to promote cultural arts in the County. For the year ending September 30, 2023, Thefundingforthiscontractisprovidedby20.72%oftherevenuegeneratedfrom2nd,3rd,5th,and6th cent of the Palm Beach County 6.00% Tourist Development Tax (also referred to as the "Bed Tax"). ThecontractfortheyearendedSeptember30,2023wasforanamountnottoexceed$2,534,788(per modified budget). As of September 30, 2023, the Council had amounts receivable from Palm Beach Countytotalingapproximately$384,700relatingtoprogramservicereimbursements.

Inaddition,underthiscontracttheCouncilactsasanagentfortheCountybyreviewingapplicationsof cultural organizations and local artists and requesting funding on their behalf. These "Category B" monies(knowninternallyasCategoryBandCategoryC-II),whicharealsofundedby20.72%Tourist Development Tax, are requested by the Council from the County, and are to be paid directly to the grantee.ThesefundsarenotrecordedasrevenueorexpensesoftheCouncil.Duringtheyearended September 30, 2023, the Council, under the direction of the TDC, administered approximately $5,054,728of"CategoryB"grantmoniestoculturalorganizations.

The Council also entered into an agreement with the County to implement and administer a cultural development program, Category C-I, which provides grants to small and emerging non-profit cultural organizations. "Category C" monies (known internally as Category C-I), are funded by County’s ad valoremtaxesandtotaledapproximately$233,000fortheyearendedSeptember30,2023.Thefunds arerequestedfromtheCountybytheCouncilandarethendistributedtotheawardedgrantee.

FortheYearEndedSeptember30,2023

5. ContractwithPalmBeachCounty,continued

Additionally,aportionofthefunds,nottoexceed15%,maybeusedbytheCounciltoadministerthe program. As of September 30, 2023, the Council had grants receivable from Palm Beach County totaling approximately $49,300 and the Council had grants payable to the grantees of approximately $41,200relatingto"CategoryC”monies.

During the fiscal year 2023, in addition to the basic contract funding from Palm Beach County, the Council also received Marketing Stimulus Funding of approximately $1,957,700 designated to boost advertising post COVID-19 pandemic. Reimbursement of these stimulus expenses follows the same process as other County contract expenses. This amount may be recovered by the County through contract adjustments project to occur from 2024 to 2027. The Council had a receivable from Palm BeachCountytotaling$1,032,594relatingtostimulusandcontractexpensefunds.

Income Reconciling Expense

Recognized Items* Recognized

PalmBeachCountyContract $ 4,427,287 $ 8,334 $ 4,435,621

*Reconcilingitemsincludeprioryearprepaidexpensesof$8,334.

6. PledgesReceivable

Pledgesreceivableconsistofunconditionalpromisestogivefromindividuals.Pledgesthatareexpectedto becollectedwithinoneyeararerecordedattheirnetrealizablevalue,whilethosethatareexpectedtobe collected in future years are recorded at the present value of their estimated future cash flows. The discount on those amounts is computed using an interest rate applicable to the years in which the promises are received (1.0% as of the date of the major gift). Pledges receivable as of September 30, 2023,consistedofthefollowing:

Management believes that pledges receivable are fully collective and, therefore, no allowance for uncollectiblereceivableswasconsiderednecessary.

7. Investments

AsofSeptember30,2023,majorcategoriesofinvestmentswerecomprisedofthefollowing:

FortheYearEndedSeptember30,2023

7. Investments,continued

Investment income consists of dividends and interest, and is reported net of fees in the statement of activities. Investment management fees are paid quarterly based upon a percentage of assets under managementandamountedtoapproximately$2,500fortheyearendedSeptember30,2023.

8. BeneficialInterestinTrust

The Council is the income beneficiary of a perpetual trust, whose assets are held by the Community Foundation for Palm Beach and Martin Counties, Inc. (the “Foundation”) as an endowed component fund(“Fund”).UnderthetermsoftheFund,theFoundation’sBoardofDirectorshasavariancepower tomodifyanyrestrictionorconditiononthedistributionoffundsforanyspecificcharitablepurposeorto specified organizations, if in their sole judgement (without the approval of any trustee, custodian, or agent), such restriction or conditions becomes, in effect, unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the community or the area served by the Foundation. The FundissubjecttotheFoundation’sinvestmentandspendingpolicies.Therewasnodistributionduring theyearendedSeptember30,2023.

9. PropertyandEquipment

PropertyandequipmentasofSeptember30,2023,consistedofthefollowing:

ThroughMaryM.Montgomery’sFoundation,TheBMCCharitableFoundation,Inc.,theCouncilobtaineda buildinglocatedat601LakeAvenue,LakeWorth,Florida,valuedat$1,350,000.TheCouncilcontinuesto useandoperatethebuildingasitscorporateheadquartersandinsupportofeducationandpromotionof culturalartsinPalmBeachCounty.

10. LineofCredit

The Council received a commitment from a financial institution for a line of credit in the amount of $250,000securedbyequipment,fixtures,andgeneralintangibles.Interestisduemonthlyatthegreater oftheBank’sPrimeRateor9.87%asofSeptember30,2023.AsofSeptember30,2023,thereisno outstandingbalance.

FortheYearEndedSeptember30,2023

11. NetAssetswithDonorRestrictions

NetassetswithdonorrestrictionsasofSeptember30,2023,consistedofthefollowing:

12. PensionPlan

TheCouncilhasestablisheda401(k)definedcontributionplanforthebenefitofsubstantiallyalleligible employees. Employeeswho work 1,000 hoursor more areeligible toreceive afully vested employer contribution after one year of employment and are eligible to contribute to the plan after 90 days of employment. The Council currently contributes 6% (a mandatory 3% safe harbor contribution and an additional 3% discretionary contribution) of theemployee’s base salary, regardless of the employee’s contribution. The employee may contribute to the Plan up to the total deferral allowed by law. The Council’scontributiontothisplanwasapproximately$64,700fortheyearendedSeptember30,2023.

13. Contributions,In-Kind

Contributedgoodsandservicesarereflectedascontributionsin-kindsupport,andexpensesorassets intheaccompanyingfinancialstatements.Attimes,businessescontributeequipment,advertising,and otherprofessionalservices.Theproductsandprofessionalservicesarerecordedattheirestimatedfair value. On behalf of the Council, the County directly paid approximately $172,800 of tax collector commission expenses, $107,600 of administrative expenses, and $8,800 of inspector general expensesfortheyearendedSeptember30,2023.

The Council recognized $172,728 of advertising, promotion, and consulting as in-kind general administrative expenses, which are reflected in the statement of activities as part of in-kind administrationsupport.Theallocation oftheuseof thein-kindbytypeisincludedinthestatement of functional expenses. Advertising and promotion, $146,838 are valued based on prices of advertising time and/or space. Consulting services, $25,890 are valued based on the price of the services provided.

FortheYearEndedSeptember30,2023

14. BusinessandCreditConcentrations

TheCouncilreceivesgrantsfromtheCountyandtheTDCasreflectedinthestatementofactivities.Direct fundingbytheseagenciesrepresentapproximately80%oftheCouncil's2023totalrevenueandsupport, andrequiresthefulfillmentofcertainconditionsassetforthinthecontractdocuments.Failuretofulfillsuch obligationscouldresultinareductionoffuturefunding.Asignificantreductioninthelevelofthissupport couldhaveasubstantialeffectontheCouncil'sprogramsandactivities.Althoughthereisapossibilityof suchanoccurrence,management believesthiscontingencytoberemote,sincebyacceptingtheterms andconditionsofthecontracts,itwilloperateinaccordancewiththeagreements.

Atvarioustimesduringtheyear,theCouncilhasfundsondepositthatexceedthe$250,000insuredbythe Federal Deposit Insurance Corporation. The Council minimizes its risk by depositing cash in financial institutions with a high credit standing. The Council has not experienced any losses of such funds and managementbelievestheCouncilisnotexposedtosignificantriskoncash.AsofSeptember30,2023, theCouncilhadapproximately$526,318inexcessofinsuredlimits.

15. OperatingLeases

The Council leases office equipment (including service) under non-cancellable operating leases that expireatvariousdatesthroughJuly2026.

Operatingright-of-useassetsasofSeptember30,2023,consistedofthefollowing:

FortheYearEndedSeptember30,2023

15. OperatingLeases,continued

Discountfortheofficeequipmenthasbeencalculatedusinganinterestrateof3.5%,whichapproximate the incremental borrowing rates of the Council for the acquisition of the related assets at the time the leasesweresigned.

OperatingleaseexpensefortheyearendedSeptember30,2023,isincludedwithintheequipmentrental categoryinthestatementoffunctionalexpensesandconsistedofthefollowing:

16. SubsequentEvents

The Council’s management has evaluated subsequent eventsthrough January16, 2024, the date on which the financial statements were available to be issued, and determined the following additional eventswererequiredtobepresentedinthesefinancialstatements.

InNovember2023,theCouncilreceivedagrantof$2,120,000fromafoundation,ofwhich$1,070,000 was received in January, 2024, and the remaining $1,050,000 will be paid in January 2025. The purposeofthegrantisforthegrantprogramentitled“PooledFundstoIncreaseAccesstotheArts”.

In October 2023, the Council was also awarded a grant for $400,000 from another foundation. The grant is to be paid in 2024 in two installments. The purpose of the grant is to support Palm Beach Countyartists,providecapacitybuildingtothesector,andfundotherCouncilinitiatives.

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407

(561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

INDEPENDENTAUDITOR’SREPORTONINTERNALCONTROLOVERFINANCIAL REPORTINGANDONCOMPLIANCEANDOTHERMATTERSBASEDONANAUDIT OFFINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITH GOVERNMENTAUDITINGSTANDARDS

TotheBoardofDirectorsof

CulturalCouncilofPalmBeachCounty,Inc.

LakeWorth,Florida

Wehaveaudited,inaccordancewiththeauditingstandardsgenerallyacceptedintheUnitedStatesof Americaandthestandardsapplicabletofinancialauditscontainedin Government Auditing Standards issuedbytheComptrollerGeneraloftheUnitedStates,thefinancialstatementsofCulturalCouncilof Palm Beach County, Inc. (a not-for-profit corporation), which comprise the statement of financial position asof September 30, 2023, and therelated statements of activities, functional expenses, and cashflowsfortheyearthenended,andtherelatednotestothefinancialstatements,andhaveissued ourreportthereondatedJanuary16,2024.

ReportonInternalControlOverFinancialReporting

In planning and performing our audit of the financial statements, we considered Cultural Council of Palm Beach County, Inc.’s internal control over financial reporting (internal control) as a basis for designingauditproceduresthatareappropriateinthecircumstancesforthepurposeofexpressingour opinion on the financial statements, but not for the purpose of expressing an opinion on the effectivenessofCulturalCouncilofPalmBeachCounty,Inc.’sinternalcontrol.Accordingly,wedonot expressan opinion on the effectiveness of the Cultural Council of PalmBeach County, Inc.’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow managementoremployees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combinationofdeficiencies,ininternalcontrol,suchthatthereisareasonablepossibilitythatamaterial misstatementoftheentity’sfinancialstatementswillnotbeprevented,ordetectedandcorrectedona timelybasis.A significant deficiency isadeficiency,oracombinationofdeficiencies,ininternalcontrol thatislessseverethanamaterialweakness,yetimportantenoughtomeritattentionbythosecharged withgovernance.

Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphofthis section and was not designed to identify all deficiencies in internal control that might be material weaknessesorsignificantdeficiencies.Giventheselimitations,duringourauditwedidnotidentifyany deficiencies in internal control that we consider to be material weaknesses. However, material weaknessesorsignificantdeficienciesmayexistthatwerenotidentified.

ReportonComplianceandOtherMatters

AspartofobtainingreasonableassuranceaboutwhetherCulturalCouncilofPalmBeachCounty,Inc.’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 couldhaveadirect andmaterialeffect onthefinancialstatements. However, providinganopinionon compliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpress suchanopinion.Theresultsofourtestsdisclosednoinstancesofnoncomplianceorothermattersthat arerequiredtobereportedunder Government Auditing Standards

PurposeofthisReport

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 Cultural Council of Palm Beach County, Inc.’s internal control or on compliance. This report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the Cultural Council of Palm Beach County, Inc.’s internal control and compliance. Accordingly, this communicationisnotsuitableforanyotherpurpose.

Holyfield & Thomas, LLC

WestPalmBeach,Florida January16,2024

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561) 689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

To the Board of Directors and Management of Palm Beach County Film and Television Commission, Inc.

West Palm Beach, Florida

Ladies and Gentlemen:

In planning and performing our audit of the financial statements of Palm Beach County Film and Television Commission, Inc. (the “Organization”) as of and for the year ended September 30, 2023, in accordance with auditing standards generally accepted in the United States of America, we considered the Organization’s system of 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 opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control

DefinitionsRelatedtoInternalControlDeficiencies

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 Organization’s financial statements will not be prevented, or detected and corrected, on atimely basis.

OurResponsibilities

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. 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. **

This communication is intended solely for the information and use of management, those charged with governance and others within the Organization and is not intended to be and should not be used by anyone other than thesespecified parties.

Very truly yours,

Holyfield & Thomas, LLC

West Palm Beach, Florida

March 13, 2024

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407

(561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

We have audited the financial statements of Palm Beach County Film and Television Commission, Inc. (the “Organization”) for the year ended September 30, 2023, and expect to issue our report in March 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, 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 October 10, 2023. Professional standards also require that we communicate to you the following information related to ouraudit.

SignificantAuditMatters

QualitativeAspectsofAccountingPractices

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. As described in Note 1, the Organization adopted the new FASB Accounting Standards Update (ASU) 2016-02, Leases(Topic842). This new standard replaced existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. Under the new guidance, leases with terms of more than 12 months are required to be recognized in the statement of financial position as liabilities, with a corresponding “right-of-use” asset. The Organization also adopted the new FASB Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The purpose of the standard is to clarify the presentation and disclosure of contributed nonfinancial assets with an intention to provide the reader of the financial statements a clear understanding of what type of nonfinancial assets were received and how they are used and recognized by the not-for-profit. The application of the newstandards had no significant impact on the Organization’s financial statements. 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 inthe proper period.

Estimates

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 significant estimate for the current year financial statements is accrued vacation.

We evaluated the key factors and assumptions used to develop the estimated amounts in determining that they are reasonablein relation tothe financial statements taken as a whole.

Palm

Beach County Film and Television Commission, Inc.

February 22, 2024

Page 2 of 3

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements is related to the disclosure of Liquidity and Availability of Resources the guidance of FASB ASC 958, Presentation of Financial Statements as presented in Note 2 to the financial statements.

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.

Corrected and Uncorrected Adjustments

Professional standards require us to accumulate all misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Journal entry recorded by management is listed on page 4. There were no uncorrected misstatements.

Disagreements with Management

For purposes of this letter, a disagreement with management is a disagreement on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations

We will request certain representations from management that are included in the management representation letter to be dated upon issuance of the report.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Organization’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants

Other Audit Findings or Issues

We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Organization’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Palm

Beach County Film and Television Commission, Inc.

February 22, 2024

Page 3 of 3

Other Information in Documents Containing Audited Financial Statements

We are not aware of any documents that contain the audited financial statements. If such documents were to be published, we would have a responsibility to determine that such financial information was not materially inconsistent with the audited statements of the Organization.

Other Matters

Supplementary Information

With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with U.S. generally accepted accounting principles, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Closing

We are pleased to respond to any questions you have about the audit or the contents of this letter. We appreciate the opportunity to be of service to you with respect to your audit and accounting needs.

This information is intended solely for the use of Audit Committee and management of Palm Beach County Film and Television Commission, Inc. and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Holyfield & Thomas, LLC

West Palm Beach, Florida

PALMBEACHCOUNTY

REPORTONAUDITOF FINANCIALSTATEMENTS

ForTheYearEndedSeptember30,2023 (with comparable totals for 2022)

FILMANDTELEVISIONCOMMISSION,INC.

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Holyfield & Thomas, LLC

Certified Public Accountants & Advisors

125 Butler Street  West Palm Beach, FL 33407 (561)689-6000  Fax (561) 689-6001  www.holyfieldandthomas.com

TotheBoardofDirectorsof

Palm BeachCounty

Film andTelevision Commission,Inc.

WestPalmBeach,Florida

Opinion

We have audited the accompanying financial statements of Palm Beach County Film and Television Commission, Inc. (a nonprofit organization), which comprise the statement of financial position as of September 30, 2023, and the related statements of activities, functional expenses, and cash flows for theyearthenended,andtherelatednotestothefinancialstatements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Palm Beach County Film and Television Commission, Inc. as of September 30, 2023, and the changes in net assets and its cash flows for the year then ended in accordance with accounting principlesgenerallyacceptedinthe United States of America

BasisforOpinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 Palm Beach County Film and Television Commission, Inc. 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 opinion.

ResponsibilitiesofManagementfortheFinancialStatements

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 raisesubstantial doubt about Palm Beach County Film and Television Commission, Inc.'s ability to continue as a going concern within one year after the date that thefinancialstatementsareavailabletobeissued.

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 opinion. 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 generally accepted auditing standards 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 performinganaudit inaccordancewith generallyaccepted auditingstandards,we:

 Exercise professionaljudgmentandmaintain professionalskepticismthroughouttheaudit.

 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 inthefinancialstatements.

 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 Palm Beach County Film and Television Commission, Inc.'s internalcontrol.Accordingly, nosuchopinionisexpressed.

 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 financialstatements.

 Conclude whether, in ourjudgment, thereareconditions or events, considered inthe aggregate, that raise substantial doubt about Palm Beach County Film and Television Commission, Inc.'s ability tocontinueasagoing concernfor areasonableperiod oftime.

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 mattersthatwe identifiedduringtheaudit.

ReportonSummarizedComparativeInformation

We have previously audited the Palm Beach County Film and Television Commission, Inc.’s 2022 financial statements, and we expressed an unmodified audit opinion of those audited financial statements in our report dated March 2, 2023. In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2022 is consistent, in all material respects, with the auditedfinancialstatementsfromwhichithasbeenderived.

ReportonSupplementaryInformation

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses – contract and non-contract on page 16 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statementsasa whole.

Holyfield & Thomas, LLC

WestPalmBeach,Florida

March13,2024

PALM BEACH COUNTY FILM AND TELEVISION COMMISSION, INC.

STATEMENT OF FINANCIAL POSITION

(with comparable totals for 2022)

See accompanying notes to financial statements.

PALM BEACH COUNTY FILM AND TELEVISION COMMISSION, INC.

See accompanying notes to financial statements.

PALM BEACH COUNTY FILM AND TELEVISION COMMISSION, INC.

STATEMENT OF CASH FLOWS

(with comparable totals for 2022)

See accompanying notes to financial statements.

PALM BEACH COUNTY FILM AND TELEVISION COMMISSION, INC.

STATEMENT OF FUNCTIONAL EXPENSES

(with comparable totals for 2022)

See accompanying notes to financial statements.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies

Organization and Nature of Activities

Palm Beach County Film and Television Commission, Inc. (the "FTC") is a not-for-profit organization incorporated in 1989 in the State of Florida. The FTC’s mission is to generate a positive impact on business tourism and the economy in Palm Beach County (the “County”)through the growth of the film, television, digital media and still photography industry, by attracting on-location production and educating the local workforce and providing services to both the visiting and the indigenous production community.

In 2016, FTC added a new business strategy that actively pursues episodic TV shows/content that positively showcases the Palm Beach County tourism brand. The Tourism Branded Content Sponsorship Program stimulates the creation of carefully crafted, high quality programming with established distribution to brandThePalmBeaches within nichemarkets.Through theallocatedbudget line items Development and Sponsorships and Stimulus, the FTC can strategically leverage production coststogeneratemoretargetedproduction.

The FTC produces the Palm Beaches Students Showcase of Films, the largest statewide film competition and award show for Florida student filmmakers, graphic designers and digital media artists. The FTC provides scholarships and grants to students and schools through a contract with the Palm Beach County Department of Housing and Economic Sustainability (now known as the Department of Housing and Economic Development) (the “DHED”). Awards are determined through an annual competition, which isconsideredthecornerstoneoftheeducationoutreachinitiativeof theFTC.

Basis of Presentation and Method of Accounting

The accompanying financial statements of the FTC have been prepared on the accrual basis of accounting, whereby revenues and support are recognized when earned, and expenses when the corresponding liability is incurred. This basis of accounting conforms to accounting principles generally acceptedintheUnitedStatesofAmerica.

Financial Statements Presentation

The accompanying financial statements have been prepared on the accrual basis of accounting in conformity with the disclosure and display requirements of the Financial Accounting Standards Board (FASB) as set forth under FASB Accounting Standards Codification (FASB ASC) 958-205 Not-for-Profit Entities, Presentation of Financial Statements. Accordingly,thenetassetsofFTCarereportedasfollows:

Net assets without donor restrictions – this classification includes those net assets whose use is not restricted by donors, even though their use may be limited in other respects, such as by contract or by board designation. Changes in net assets arising from exchange transactions (except income and gains on assets that are restricted by donors or by law) are included in net assets without donor restrictions. The FTC releases any purpose restrictions to this classification when funds are used for their intended purpose and when assets are placed in servicefortheusestipulatedbythedonor.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies, continued

Net assets with donor restrictions – this classification includes those net assets whose use by the FTC has been limited by donors to either a later period of time, or after a specified date, or for a specified purpose. This classification also includes net assets that must be maintained by the FTC in perpetuity. Net assets with donor restrictions in perpetuity increase when the FTC receives contributions for which donor-imposed restrictions limiting the FTC’s use of an asset or its economic benefits neither expire with the passage of time nor can be removed by the FTC meeting certain requirements. As of September 30, 2023, FTC had no net assets with donor restrictions.

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 certain reportedamountsanddisclosures. Accordingly,actualresultscoulddifferfromthoseestimates.

Accounting and Use of Non-Tourist Tax Funds

The FTC is required to maintain policies and procedures that make provision for one or more separate accounts for receipt of non-tourist tax revenues received by the FTC, such as membership dues, participationfees, andcontributions, andforthe payment from suchaccountsofexpenses of the FTCthat arenotreimbursedpursuanttothePalmBeachCountyContract(asfurtherdescribedinNote4).TheFTC shall incur and pay only such expenses as are lawful, ordinary, and necessary administrative and operating expenses incurred in connection with the marketing and promotion of Palm Beach County tourism.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of checking accounts at a federally chartered bank. For purposes of the statement of cash flows, all highly liquid investments with a maturity of three months or lesswhenpurchasedarealsoconsideredtobecashequivalents.

Reimbursement due from Palm Beach County

FTC records contract reimbursements due from Palm Beach County as allowable expenses are incurred, approved,andbilled. Allamountsaredeemedfullycollectibleandnoallowanceisconsiderednecessary.

Prepaid Expenses

As a part of its normal operations, the FTC pays certain expenses including insurance, postage, and professionalmemberships priorto the actual use of those assets. Such amountsare recorded as prepaid expenses in the statement of financial position, and are recognized as expense as the benefit is realized. AsofSeptember30,2023,theFTChasaprepaidexpensesbalanceof$8,480.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies, continued Accrued Expenses

As of September 30, 2023, the FTC's accrued expenses include costs of accrued employee benefits of $18,328.

County Contract Advance

In connection with the FTC’s administrative services and agency contract (further described in Note 4), Palm Beach County advanced FTC $500,000 for use in facilitating vendor payments and other working capitalneeds, pendingreimbursementof requestedexpenses.

Revenues and Support

Incomegenerated bytheFTC can be classified aseither Revenuesor Support. Revenuesare generated through exchange transactions, while Support is generated through non-exchange transactions. The largest portion of the FTC’s income comes from grants and contracts, both of which are non-exchange transactionsandareconsideredSupport.

Grants and Contracts

Contract income from Palm Beach County and grant income from the DHED are recognized on a cost reimbursement basis. Revenue from contracts and grants are recognized when expenditures are made andrecognizedforthe purposesspecified.

Contributions

The FTC follows FASB ASC 958-065, Accounting for Contributions Received and Contributions Made In accordance with this standard, contributions received are recorded as with or without donor restrictions depending on the existence and/or nature of any such restrictions. Contributions that are initially restricted as to time or use are required to be reported as contributions with donor restrictions and are later reclassified to net assets without donor restrictions upon expiration of the time or use restriction. If the restriction placed upon a contribution is met within the same accounting period as the receipt of the contribution, FASB ASC 958-065 permitsthe contribution and the expense to be reported as net assets without donor restrictions. The FTC's donations from various sponsors are recorded as receivedandaregenerallywithoutdonorrestrictions.

Membership

Membershipincome consistsof duesassessed annuallytomembersof theFTC’sBoardofDirectors,and is recognized upon receipt. These assessments are used to fund expenses that are not reimbursable undercontractorgrantagreements.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies, continued Advertising

The FTC expenses advertising costs as incurred. Total expenditures for advertising costs for the year endedSeptember30,2023were$20,512.

Donated Services

The FTC follows FASB ASC Subtopic 958-605, Not-for-Profit Entities, Revenue Recognition for donated services from volunteers, board members, and other third parties who assist in fund-raising and education programs and from professionals who donate services. The value of the contributed services should be recognized when they (a) create or enhance a nonfinancial asset or (b) require specialized skills, are provided by entities or persons possessing those skills, and would need to be purchased if they were not donated. Generally, the value of volunteer services to the FTC does not satisfythesecriteriaandisthereforenot recognizedinthefinancialstatements.

Functional Allocation of Expenses

Costs of providingtheFTC’s variousprograms and other activities have been summarized ona functional basis in the statement of activities. Costs are allocated among film and television promotion, education, andmanagementandgeneralbasedonapercentageoftherelatedactivities.

Scholarships

TheFTCscholarshipsarepaidtoidentifiedrecipientsofThePalmBeachesStudentShowcaseofFilms.

Tax Status

The FTC is exempt from federal and state income taxes pursuant to Internal Revenue Code Section 501(c)(6) and Chapter 220.13 of the Florida Statues. Therefore, the financial statements do not reflect a provisionforincometaxes.

The FTC follows the guidance of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes, which seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. This standard prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position that an entity takes or expects to take in a tax return. An entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. The FTC assesses its income tax positions based on management’s evaluation of the facts, circumstances, and information available at the reporting date. Management does not believe that the FTC has any significant uncertain tax positions that would be material to the financial statements. Furthermore, there is no federal or state open-year tax return under audit.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies, continued Fair Value Measurement

The FTCfollows FASB ASC820, Fair Value Measurement. Thisstandarddefinesfairvalue,establishesa framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and requires expanded disclosures about fair value measurements of financial instruments.

The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs when available. Observable inputs are those that market participants would use in pricingtheassetorliabilitybasedonthebestinformationavailableinthecircumstances.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level1) and lowest prioritytounobservable inputs (Level3). If inputs used tomeasure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest levelofinputthatissignificanttothefairvaluemeasurement oftheinstrument.

Thethreelevelsofthefairvaluehierarchyaredescribedbelow:

Level1- Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilitiesthattheFTChastheabilitytoaccess.

Level2- Inputsthat include quoted prices for similar assets and liabilities in activemarkets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models or quoted prices of assets and liabilities of similar characteristics.

Level3- Inputs that are unobservable for the assets or liabilities, which are typically based on an entity’sown assumptions, asthereislittle,if any,relatedmarket activity.

The asset’sor liability’sfair valuemeasurement level within the fair value hierarchy isbasedonthe lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximizetheuseofobservableinputsandminimizetheuseofunobservableinputs.

Recent Accounting Policies

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their statement of financial position as “right of use assets” with corresponding liabilities. FTC did not have any leasefortheyearendingSeptember 30, 2023.

For the Year Ended September 30, 2023

1. Organization and Summary of Significant Accounting Policies, continued Comparable Financial Information

The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the FTC’s financial statements for the year ended September 30, 2022, from which the summarized information was derived. Certain 2022 amounts may have been reclassified to conform to 2023 classifications with no effect on the previously reported changein netassets.

2. Liquidity and Availability of Resources

Financial assets available for general expenditure within one year, that is, without donor restrictions or otherrestrictionslimitingtheirusecomprisethefollowing:

The FTC receives significant income from its Palm Beach County Contract (see Note 4), which covers the majority of its operating expenditures on a direct reimbursement basis. The Organization also receivesgrantsandother incomethat mayormay notberestrictedforusein a particularprogram.

3. Fair Value Measurement

The following methods and assumptions were used by the FTC in estimating the fair value of financial instrumentsthatwerenotdisclosedunderFASBASCTopic820.

 Cash equivalents –Thecarryingamountreported approximatesfair value.

 Reimbursement due from Palm Beach County – The carrying amount approximates fair value duetotheshortterm of theamounts due.

 Accounts payable, accrued expenses, and other liabilities – The carrying amount reported approximatesfairvalueduetotheshort-termduration of theinstruments.

The FTC has no assets or liabilities measured at fair value on a recurring basis under FASB ASC Topic 820,for2023. TherehavebeennochangesinthemethodologiesusedasofSeptember30,2023.

For the Year Ended September 30, 2023

4. Contract with Palm Beach County

The FTC annually enters into an administrative services and administrative agency contract with the County. The contract provides that the FTC will perform, administer and, in certain cases, provide financial sponsorship for various functions, such as attracting and permitting film and television production, advertising, public relations, production marketing and trade shows, incorporating diversity in programing and operations, familiarization tours, and other projects and services to promote the growth of the film, television, digital media and still photography industry in the County. For the year ending September 30, 2023, the funding for this contract is provided by revenue generated from the 2nd, 3rd, 5th, and 6th cents of the Palm Beach County 6.00% Tourist Development Tax (also referred to as the "Bed Tax"). The contract, as amended, for the year ended September 30, 2023 was for an amountnot toexceed$1,212,310.

In connection with the County contract, the FTC submits requests for reimbursement of allowable payments and expenditures and records the corresponding revenue as the request is approved and paid. Subsequent adjustments made in accordance with US GAAP to certain payments and expenditures may often create timing differences between the contract utilization according to the County and amounts reported in these financial statements. The fiscal year-end amounts and related adjustmentsaresummarized asfollows:

Income Reconciling Expense

Recognized Items* Recognized

Palm BeachCountyContract

$ 948,285 $ 4,357 $ 952,642

*Reconcilingitems include accrualbasistransactions.

In addition to the $948,285 in funding from the contract with Palm Beach County, the FTC received Stimulus funding of $644,990 to be used for marketing purposes and special projects. The reimbursement relating to these expenses follows the same process as other County contract expenses.

5. Grant Agreement

The FTC originally entered into a grant agreement with the DHED on March 11, 2003. The grant agreement has been renewed and extended through September 2023. The grant agreement provides the financial resources to support educational programs in the film and television industry in Palm Beach County and implement the Palm Beach County Film and TV Tech Prep Program in order to foster a stronger and more balanced economy in Palm Beach County. For the year ended September 30, 2023,theFTCreceivedatotalof$75,000associatedwiththisgrant.

6. Non-Contract Expenses

The FTC incurs certain expenses that are not reimbursed under the PBC contract or the DHED grant agreement. As of September 30, 2023 the total amount of non-contract and non-DHED expenses, less thein-kind, was$12,728.

For the Year Ended September 30, 2023

7. Pension Plan

FTC approved the implementation of a 401(k), Profit - Sharing Plan (“Plan”). Full time employees who have completed one year of service are eligible to participate in the Plan. During 2023, the employer contributions are 11.96% of an eligible employee’s compensation, and employees are fully vested after three years of service. During the year ending September 30, 2023, the FTC contributed $36,842 for this 401(k) program.

8. Contributions, In-Kind

Contributed services are reflected as in-kind support, and expenses or assets in the accompanying financial statements. On behalf of the FTC, the County directly paid $42,588 of administrative expenses, $1,914 of inspector general expenses, and $35,941 of tax collector commission expenses for the year ended September 30, 2023. The County also provided office space valued at $36,238 to FTC in exchange for no payment. Amounts recorded for these County-provided expenses and office space are based upon reports from the County, and the estimated fair value rent for similar space in this market. In addition, FTC Board members contributed $1,300 in promotional and other miscellaneous services in exchange for membership dues, and various organizations contributed services in connection with the Student Showcase of Films totaling $96,990. Such in-kind support is recorded at amounts the FTC estimated it would have paid for these services.

9. Business and Credit Concentrations

The FTC receives contract funding from the County as reflected in the statement of activities. Direct funding by the County represents approximately 84% of the FTC's 2023 total revenue and support, and requires the fulfillment of certain conditions as set forth in the contract documents. Failure to fulfill such obligations could result in a reduction of future funding. A significant reduction in the level of this support could have a substantial effect on the FTC's programs and activities. Although there is a possibility of such an occurrence, management believes this contingency to be remote, since by accepting the terms and conditions of the contracts, it will operate in accordance with the agreements. In addition, management continually monitors the funding resources allocated by the County and adjusts the budget as necessary for ongoing sponsorship commitments through the FTC’s Sponsorship Committee.

The FTC uses an FDIC insured financial institution to maintain its cash, which at times may exceed FDIC insured limit. The FTC has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on such cash. As of September 30, 2023, the FTC had approximately $81,000 in excess of insured limits.

10. Subsequent Events

The FTC has evaluated subsequent events through March 13, 2024, the date on which the financial statements were available to be issued, and determined that there were no further disclosures required to be presented in these financial statements.

SUPPLEMENTARYINFORMATION

SCHEDULE OF FUNCTIONAL EXPENSESCONTRACT AND NON-CONTRACT

PALM BEACH COUNTY FILM AND TELEVISION COMMISSION, INC.