Mark Escoffery, P.A.

INDEPENDENT AUDITOR’S REPORT

To The Board of Directors

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, 2022 and 2021, and the related Statements of Activities, Functional Expenses and Cash Flows for the year 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, 2022 and 2021 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 17, 2023, 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 17, 2023

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF FINANCIAL POSITION

SEPTEMBER 30, 2022 AND 2021

Without DonorWith Donor2022 RestrictionsRestrictionsTotal2021

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF ACTIVITIES FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021

Without DonorWith Donor

PALM BEACH COUNTY SPORTS COMMISSION, INC.

STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021

See Accompanying Notes to Financial Statements

PALM BEACH COUNTY SPORTS COMMISSION, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021

Supporting Services

See Accompanying Notes to Financial Statements

PALM BEACH COUNTY SPORTS COMMISSION, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022, AND 2021

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities

The Palm Beach County Sports Commission, Inc. ("the Commission") is a Florida based not-for-profit 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 “noncontract” support) promotes youth sports in the County. Both “contract” and “non-contract” 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, 2021, from which the summarized information was derived. Certain 2021 amounts may be reclassified to conform to 2022 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 YEAR ENDED SEPTEMBER 30, 2022, AND 2021

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, 2022, totaled $500,000. 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, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022, AND 2021

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 tax- exempt 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, 2021, 2020, and 2019 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 year ended September 30, 2022, the Commission incurred approximately $63,939 in advertising costs, which are reported as advertising in the Statement of Functional Expenses.