Stoneybrook South at ChampionsGate Community Development District

ANNUAL FINANCIAL REPORT

September 30, 2018

Stoneybrook South at ChampionsGate Community Development District ANNUAL FINANCIAL REPORT
September 30, 2018

TABLE OF CONTENTS

Page Number
REPORT OF INDEPENDENT AUDITORS	1-2
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-8
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements:
Statement of Net Position	9
Statement of Activities	10
Fund Financial Statements:
Balance Sheet – Governmental Funds	11
Reconciliation of Total Governmental Fund Balances to Net
Position of Governmental Activities	12
Statement of Revenues, Expenditures and Changes in Fund
Balances – Governmental Funds	13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities	14
Statement of Revenues, Expenditures and Changes in Fund
Balances – Budget and Actual – General Fund	15
Notes to Financial Statements	16-29
INDEPENDENT AUDITOR'S 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	30-31
MANAGEMENT LETTER	32-33
INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE
WITH SECTION 218.415, FLORIDA STATUTES	34

r�tt Berger, Toombs, Elam, CO:, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120 // 461-1155
FAX: 772/468-9278

REPORT OF INDEPENDENT AUDITORS

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District Osceola County, Florida

Report on the Financial Statements
We have audited the accompanying financial statements of Stoneybrook South at ChampionsGate Community Development District as of and for the year ended September 30, 2018, and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the  financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Member AICPA

Fort Pierce / Stuart
- 1 -
Member AICPA Division For CPA Firms
Private Companies Practice Section

Member FICPA

��tt Berger, Toombs, Elam,
,OJ Gaines & Frank
CertifiedPublicAccountants PL

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District

Opinion
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, and each major fund of Stoneybrook South at ChampionsGate Community Development District as of September 30, 2018, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Other Matters
Management’s Discussion and Analysis
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economical or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted principally of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with the sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated June 26, 2019 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations and contracts.

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Stoneybrook South at ChampionsGate Community Development District’s internal control over financial reporting and compliance.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 26, 2019

Management’s discussion and analysis of Stoneybrook South at ChampionsGate Community Development District (the “District”) financial performance provides an objective and easily readable analysis of the District’s financial activities. The analysis provides summary financial information for the District and should be read in conjunction with the District’s financial statements.

OVERVIEW OF THE FINANCIAL STATEMENTS

The District’s basic financial statements comprise three components; 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to financial statements. The Government-wide financial statements present an overall picture of the District’s financial position and results of operations. The Fund financial statements present financial information for the District’s major funds. The Notes to financial statements provide additional information concerning the District’s finances.

The Government-wide financial statements are the statement of net position and the statement of activities. These statements use accounting methods similar to those used by private-sector companies. Emphasis is placed on the net position of governmental activities  and the change in net position. Governmental activities are primarily supported by special assessments.

The statement of net position presents information on all assets and liabilities of the District, with the difference between assets and liabilities reported as net position. Net position is reported in three categories; 1) net investment in capital assets, 2) restricted, and 3) unrestricted. Assets, liabilities, and net position are reported for all Governmental activities.

The statement of activities presents information on all revenues and expenses of the District and the change in net position. Expenses are reported by major function and program revenues relating to those functions are reported, providing the net cost of all functions provided by the District. To assist in understanding the District’s operations, expenses have been reported as governmental activities. Governmental activities financed by the District include general government, physical environment and debt service.

Fund financial statements present financial information for governmental funds. These statements provide financial information for the major funds of the District. Governmental fund financial statements provide information on the current assets and liabilities of the funds, changes in current financial resources (revenues and expenditures), and current available resources.

Fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all governmental funds. A statement of revenues, expenditures, and changes in fund balances – budget and actual is provided for the District’s General Fund. Fund financial statements provide more detailed information about the District’s activities. Individual funds are established by the District to track revenues that are restricted to certain uses or to comply with legal requirements.

The government-wide financial statements and the fund financial statements provide different pictures of the District. The government-wide financial statements provide an overall picture of the District’s financial standing. These statements are comparable to private-sector companies and give a good understanding of the District’s overall financial health and how the District paid for the various activities, or functions, provided by the District. All assets of  the District, including land, buildings and improvements, and infrastructure are reported in the statement of net position. All liabilities, including principal outstanding on bonds are included. The statement of activities includes depreciation on all long-lived assets of the District, but transactions between the different functions of the District have been eliminated in order to avoid “doubling up” the revenues and expenses. The fund financial statements provide  a picture of the major funds of the District. In the case of governmental activities, outlays for long lived assets are reported as expenditures and long-term liabilities, such as general obligation bonds, are not included in the fund financial statements. To provide a link from the fund  financial statements to the government-wide financial statements, a reconciliation is provided from the fund financial statements to the government-wide financial statements.

Notes to financial statements provide additional detail concerning the financial activities and financial balances of the District. Additional information about the accounting practices of the District, investments of the District, capital assets and long-term debt are some of the items included in the notes to financial statements.

Financial Highlights

The following are the highlights of financial activity for the year ended September 30, 2018.

The District’s total liabilities exceeded total assets by $(190,996) (net position). Unrestricted net position for Governmental Activities was $(265,762). Restricted net position was $74,766.

Governmental activities revenues totaled $437,837 while governmental activities expenses totaled $640,334.

Financial Analysis of the District

The following schedule provides a summary of the assets, liabilities and net position of the District and is presented by category for comparison purposes.

Net Position	
		Governmental Activities 2018	2017	
Current assets	$	202,298	$	21,788	
Restricted assets		152,640	-	
Capital assets		4,326,320	-	
Total Assets		4,681,258	21,788	
Current liabilities		173,162	10,287	
Non-current liabilities		4,699,092	-	
Total Liabilities		4,872,254	10,287	
Restricted debt service		74,766	-	
Net position - unrestricted		(265,762)	11,501	
Total Net Position	$	(190,996)	$	11,501	

The increase in current assets is related to an assessment receivable for debt service in the current year.

The increase in restricted assets, capital assets and non-current liabilities is related to the issuance of long-term debt for a capital project.

The decrease in net position is primarily related to the payment of bond costs in the current year.

Financial Analysis of the District (Continued)

The following schedule provides a summary of the changes in net position of the District and is presented by category for comparison purposes.

Change In Net Position	
	 	Government
 	2018		al Activities	
 	2017		
Program Revenues			
Charges for services	$	298,731	$	-	
Operating contributions	134,856	74,010	
General Revenues			
Investment earnings	 	4,250 	 	- 	
Total Revenues	 	437,837 	 	74,010 	
Expenses			
General government	80,799	62,509	
Physical environment	53,746	-	
Interest and other charges Total Expenses

Change in Net Position	 	505,789 
 	640,334 	 	- 
 	62,509 	
	(202,497)	11,501	
Net Position - Beginning of Year	 	11,501 	 	- 	
Net Position - End of Year	  $	(190,996)	  $	11,501 	

The increase in charges for services is related to debt service requirements related to the issuance of the bond in the current year.

The increase in developer contributions is related to the increase in the physical environment expenses in the current year.

The increase in interest and other charges is related to bond issuance costs and interest on the new bonds issued in the current year.

Capital Assets Activity

The following schedule provides a summary of the District’s capital assets as of September 30, 2018 and 2017.

Governmental Activities
 	Description			2018		2017	
Construction in progress		  $	4,326,320 		  $	- 	

The activity for the year consisted of $4,326,320 in construction in progress additions.

General Fund Budgetary Highlights

Actual governmental expenditures were less than final budgeted amounts primarily due to lower legal and legal advertising expenditures than were anticipated in the budget.

The 2018 budget was amended for physical environment expenditures that were not anticipated in the original budget.

Debt Management

Governmental Activities debt includes the following:

In October 2017, the District issued $4,710,000 Special Assessment Bonds, Series 2017. The Bonds were issued to fund the acquisition and construction costs associated with the public infrastructure allocated to Parcel K Assessment Area (the “2017 Project”). The balance outstanding at September 30, 2018 was $4,710,000.

Economic Factors and Next Year’s Budget

The District has issued additional debt and anticipates to continue the construction of capital improvements in fiscal year 2019.

Request for Information

The financial report is designed to provide a general overview of Stoneybrook South at ChampionsGate Community Development District finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Stoneybrook South at ChampionsGate Community Development District, Governmental Management Services, 9145 Narcoossee Road, Suite A206, Orlando, FL 32827.

	Governmental
Activities	
ASSETS
Current Assets		
Cash	$	4,662	
Assessments receivable	163,325	
Due from developer	27,563	
Prepaid items	 	6,748 	
Total Current Assets	 	202,298 	
Non-current Assets Restricted assets
Investments	152,640
Capital assets, not being depreciated
Construction in progress	 	4,326,320 	
Total Non-current Assets	 	4,478,960 	
Total Assets	 	4,681,258 	

LIABILITIES
Current Liabilities
Accounts payable and accrued expenses	21,143	
Unearned revenues	6,748	
Accrued interest	90,271	
Bonds payable - current portion	 	55,000 	
Total Current Liabilities	 	173,162 	

Non-current Liabilities Bonds payable
Total Liabilities

 	4,699,092 
 	4,872,254 

NET POSITION		
Restricted debt service	74,766	
Unrestricted	 	(265,762)	
Total Net Position	  $	(190,996)	

See accompanying notes.

Stoneybrook South at ChampionsGate Community Development District STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018

Program Revenues
Operating

Net (Expense) Revenues and Changes in Net Position

Functions/Programs	
Expenses		Charges for
Services		Grants and
Contributions		Governmental
Activities	
Governmental Activities
General government	
$	(80,799)		
$	-		
$	80,986		
$	187	
Physical environment	(53,746)		-		53,870		124	
Interest on long-term debt	(505,789)		298,731		-		(207,058)	
Total Governmental Activities	  $	(640,334)		  $	298,731 		  $	134,856 		(206,747)	

General revenues:
Investment earnings

Change in Net Position

 	4,250 

(202,497)

Net Position - October 1, 2017
Net Position - September 30, 2018

 	11,501 
  $	(190,996)

BALANCE SHEET – GOVERNMENTAL FUNDS
September 30, 2018

								Total	
				Debt		Capital		Governmental	
ASSETS

Cash	General

$	4,662		

$	Service

-		Projects

$	-		Funds

$	4,662	
Assessments receivable	-			163,325		-		163,325	
Due from developer	27,563			-		-		27,563	
Prepaid items	6,748			-		-		6,748	
Restricted assets									
Investments, at fair value	-			151,800		840		152,640

$	354,938	
Total Assets	$ 38,973		$	315,125		$	840			

LIABILITIES AND FUND BALANCES									
LIABILITIES									
Accounts payable and accrued expenses	$ 20,413		$	-		$	730		$	21,143	
Unearned revenues	6,748			-				6,748

27,891	
Total Liabilities	27,161			-		730			

FUND BALANCES									
Nonspendable									
Prepaid items	6,748			-		-		6,748	
Restricted									
Debt service	-			315,125		-		315,125	
Capital projects	-			-		110		110	
Unassigned

Total Fund Balances

Total Liabilities and Fund Balances	

  $ 	5,064

11,812

38,973 		

  $		- 315,125
315,125 		

   $		- 110
840 		

  $		5,064

327,047

354,938 	

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
September 30, 2018

Total Governmental Fund Balances	$	327,047	
Amounts reported for governmental activities in the Statement of Net Position			
are different because:			
Capital assets consisting construction in progress used in governmental			
activities are not current financial resources and, therefore, are not reported			
at the fund level.		4,326,320	
Long-term liabilities, $(4,710,000) net of bond premium, net, $44,092, are not due and	
payable in the current period and, therefore, are not reported at the fund level.		(4,754,092)	
Accrued interest expense for long-term debt is not a current financial use			
and, therefore, is not reported at the fund level.		(90,271)	

Net Position of Governmental Activities	
  $		
(190,996)	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
For the Year Ended September 30, 2018

							Total	
			Debt		Capital		Governmental	
	General		Service		Projects		Funds	
Revenues								
Special assessments	$	-		$ 298,731		$	-		$	298,731	
Developer contributions	134,856		-		-		134,856	
Investment earnings	-		299		3,951		4,250	
Total Revenues	134,856		299,030		3,951		437,837	

Expenditures								
Current								
General government	80,799		-		-		80,799	
Physical environment	53,746		-		-		53,746	
Capital outlay	-		-		4,326,320		4,326,320	
Debt service								
Interest	-		135,406		-		135,406	
Other debt service	 	- 		 	- 		 	281,496 		 	281,496 	
Total Expenditures	134,545		135,406		4,607,816		4,877,767	

Excess of revenues over/(under) expenditures	
311		
163,624		
(4,603,865)		
(4,439,930)	

Other Financing Sources/(Uses)								
Transfers in	-		601		-		601	
Transfers out	-		-		(601)		(601)	
Issuance of long-term debt	-		150,900		4,559,100		4,710,000	
Bond premium	-		-		45,476		45,476	
Total Other Financing Sources/(Uses)	-		151,501		4,603,975		4,755,476	

Net change in fund balances	
311		
315,125		
110		
315,546	
Fund Balances - October 1, 2017	11,501		-		-		11,501	

Fund Balances - September 30, 2018	
$	11,812		
$ 315,125		
$	110		
$	327,047	

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30, 2018

Net Change in Fund Balances - Total Governmental Funds	$	315,546	
Amounts reported for governmental activities in the Statement of Activities are different because:			
Governmental funds report capital outlays as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation. This is the amount of capital outlay in the current period.		

4,326,320	
Bond premium is amortized over the life of the loan at the government-wide level.
This is the amount of current-year amortization.		
1,384	
In the Statement of Activities, interest is accrued on outstanding bonds; whereas in governmental funds, interest expenditures are reported when due. This is the net amount between the prior year and the current year accruals.		

(90,271)	
The issuance of long-term debt along with bond premium, is an an other
financing source at the fund level, but the proceeds increase long-term liabilities at the government-wide level.	

 	(	

4,755,476)	
Change in Net Position of Governmental Activities	  $		(202,497)	

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
For the Year Ended September 30, 2018

								Variance	
	Original		Final					Favorable	
	    Budget			    Budget			 		Actual			 (Unfavorable)	
Revenues									
Developer contributions	$	87,365		$ 147,365		$	134,856		$	(12,509)	

Expenditures									
Current									
General government	87,365		92,865			80,799		12,066	
Physical environment Total Expenditures
Net change in fund balances Fund Balances - October 1, 2017	- 87,365

-

-		54,500

147,365

-

-			53,746
134,545

311

11,501		

   $		754
12,820

311

11,501

11,812 	

Fund Balances - September 30, 2018	
  $		
- 		
  $		
- 		
   $		
11,812 				

See accompanying notes.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of Stoneybrook South at ChampionsGate Community Development District (the “District”) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The District's more significant accounting policies are described below.

Reporting Entity

The District was established on August 15, 2016 by Osceola County, Florida, Ordinance 20016-70 under the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the "Act"), as a Community Development District.  The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of the infrastructure necessary for community development within its jurisdiction. The District is governed by a five-member Board of Supervisors, who are elected for terms of four years. The District operates within the criteria established by Chapter 190. The Board has the responsibility for assessing and levying assessments, approving budgets, exercising control over facilities and properties, controlling the use of funds generated by the District, approving the hiring and firing of key personnel, and financing improvements.

The reporting entity for the District includes all functions of government in which the District’s Board exercises oversight responsibility. Oversight responsibility includes, but is not limited to, financial interdependency, designation of management, significant ability to influence operations and accountability for fiscal matters. As required by GAAP, these financial statements present the Stoneybrook South at ChampionsGate Community Development District (the primary government) as a stand-alone government.

Based upon the application of the above-mentioned criteria as set forth by the Governmental Accounting Standards Board, the District has identified no component units.

Measurement Focus and Basis of Accounting

The basic financial statements of the District are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to financial statements

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

Government-wide Financial Statements

Government-wide financial statements report all non-fiduciary information about the reporting government as a whole. These statements include the governmental activities of the primary government. The effect of interfund activity has been removed from these statements.

Governmental activities are supported by special assessments, miscellaneous revenues and interest. Program revenues include charges for services, and payments made by parties outside of the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program.

Amounts paid to acquire capital assets are capitalized as assets, rather than reported as an expenditure. Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source.

Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.

Fund Financial Statements

The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds
The District has implemented the Governmental Accounting Standards Board Statement 54 – Fund Balance Reporting and Governmental Fund Type Definitions. The Statement requires the fund balance for governmental funds to be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.

The District has various policies governing the fund balance classifications.

Nonspendable Fund Balance – This classification consists of amounts that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact.

Restricted Fund Balance – This classification includes amounts that can be spent only for specific purposes stipulated by the state constitution, external resource providers, or through enabling legislation.

Assigned Fund Balance – This classification consists of the Board of Supervisors’ intent to be used for specific purposes, but are neither restricted nor committed. The assigned fund balances can also be assigned by the District’s management company.

Unassigned Fund Balance – This classification is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance is considered to be utilized first when expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

Fund Balance Spending Hierarchy – For all governmental funds except special revenue funds, when restricted, committed, assigned, and unassigned fund balances are combined in a fund, qualified expenditures are paid first from restricted or committed fund balance, as appropriate, then assigned and finally unassigned fund balances.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued)

b. Fund Financial Statements (Continued) Governmental Funds (Continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered to be available when they are collected within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest associated with the current fiscal period is considered to be an accrual item and so has been recognized as revenue of the current fiscal period.

Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported  fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability.

Debt service expenditures are recorded only when payment is due.

Basis of Presentation

Governmental Major Funds

General Fund – The General Fund is the District’s primary operating fund. It accounts  for all financial resources of the general government, except those required to be accounted for in another fund.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Presentation (Continued)

Governmental Major Funds (Continued)

Debt Service Fund – Accounts for debt service requirements to retire certain capital improvement revenue bonds which were used to finance the construction of District infrastructure improvements and finance certain additional improvements. The bond series is secured by a pledge of debt service special assessment revenues in any fiscal year related to the improvements. A lien is placed on all benefited land in relationship to the debt outstanding.

Capital Projects Fund – The Capital Project Fund accounts for construction of infrastructure improvements within the boundaries of the district.

Non-current Governmental Assets/Liabilities

GASB Statement 34 requires that non-current governmental assets, such as land and buildings, and non-current governmental liabilities, such as special assessment bonds, be reported in the governmental activities column in the government-wide statement of net position.

Assets, Liabilities and Net Position or Equity

Cash and Investments

Florida Statutes require state and local governmental units to deposit monies with financial institutions classified as "Qualified Public Depositories," a multiple financial institution pool whereby groups of securities pledged by the various financial institutions provide common collateral from their deposits of public funds. This pool is provided as additional insurance to the federal depository insurance and allows for additional assessments against the member institutions, providing full insurance for public deposits.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Assets, Liabilities and Net Position or Equity (Continued)

Cash and Investments (Continued)

The District is authorized to invest in those financial instruments as established by Section 218.415, Florida Statutes. The authorized investments consist of:

Direct obligations of the United States Treasury;

The Local Government Surplus Funds Trust or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperative Act of 1969;

Interest-bearing time deposits or savings accounts in authorized qualified public depositories;

Securities and Exchange Commission, registered money market funds with the highest credit quality rating from a nationally recognized rating agency.

Cash equivalents include time deposits and certificates of deposit with original maturities of three months or less and held in a qualified public depository as defined by Florida Statute 280.02.

Restricted Net Position

Certain net position of the District are classified as restricted on the statement of net position because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors. In a fund with  both restricted and unrestricted net position, qualified expenses are considered to be paid first from restricted net position and then from unrestricted net position.

Capital Assets

Capital assets, which include land, infrastructure, and improvements, are reported in the applicable governmental activities column.

The District defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. The valuation basis for all assets is historical cost.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4. Assets, Liabilities and Net Position or Equity (Continued)

Capital Assets (Continued)

Major outlays for capital assets and improvements are capitalized as projects are constructed.

Depreciation of capital assets is computed and recorded by utilizing the straight-line method.

Unamortized Bond Premiums

Bond premiums are presented on the government-wide financial statements. The costs are amortized over the life of the bonds using the method of accounting. For financial reporting, the unamortized bond discount is netted against the applicable long-term debt.

Budgets

Budgets are prepared and adopted after public hearings for the governmental funds, pursuant to Chapter 190, Florida Statutes. The District utilizes the same basis of accounting for budgets as it does for revenues and expenditures in its various funds. The legal level of budgetary control is at the fund level. All budgeted appropriations lapse at year end. Formal budgets are adopted for the general and debt service funds. As a result, deficits in the budget variance columns of the accompanying financial statements may occur.

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS

1. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position

“Total fund balances” of the District’s governmental funds, $327,047, differs from “net position” of governmental activities, $(190,996), reported in the Statement of Net Position. This difference primarily results from the long-term economic focus of the statement of net position versus the current financial resources focus of the governmental fund balance sheet. The effect of the differences is illustrated below.

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position (Continued)

Capital related items

When capital assets (property, plant and equipment that are to be used in governmental activities) are purchased or constructed, the cost of those assets is reported as expenditures in governmental funds. However, the Statement of Net Position included those capital assets among the assets of the District as a whole.

Construction in progress	$	4,326,320

Long-term debt transactions

Long-term liabilities and bond discount applicable to the District’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position.

Bonds payable	$	(4,710,000)	
Bond premium, net	 	(44,092)	
Bonds payable, net	$	(4,754,092)	

Accrued interest

Accrued liabilities in the Statement of Net Position differ from the amount reported in governmental funds due to accrued interest on bonds.

Accrued interest on bonds payable	$	(90,271)

NOTE	B	–		RECONCILIATION	OF	GOVERNMENT-WIDE	AND	FUND	FINANCIAL STATEMENTS (CONTINUED)

Explanation of Differences Between the Governmental Fund Operating Statements and the Statement of Activities

The “net change in fund balances” for government funds, $315,546, differs from the “change in net position” for governmental activities, $(202,497), reported in the Statement of Activities. The differences arise primarily from the long-term economic focus of the Statement of Activities versus the current financial resources focus of the governmental funds. The effect of the differences is illustrated below.

Capital related items

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation. As a result, fund balances decrease by the amount of financial resources expended, whereas net position decrease by the amount of depreciation charged for the year.

Capital outlay	$	4,326,320

Long-term debt transactions

The proceeds from long-term debt and bond premium are reflected as an other financing source at the fund level, however these proceed increase liabilities at the government-wide level.

Issuance of long-term debt	$	(4,710,000)	
Bond premium	 	(45,476)	
Total	$	(4,755,476)	

Some expenses reported in the Statement of Activities do not require the use of current financial resources, therefore, are not reported as expenditures in governmental funds.

Net change in accrued interest payable	$	(90,271)

Amortization of bond premium	$	1,384

NOTE C – CASH AND INVESTMENTS

All deposits are held in qualified public depositories and are included on the accompanying balance sheet as cash and investments.

Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not have a formal deposit policy for custodial credit risk; however, they follow the provisions of Chapter 280, Florida Statutes regarding deposits and investments.  As of September 30, 2018, the District's bank balance and the carrying value  were $4,662. Exposure to custodial credit risk was as follows. The District maintains  all deposits in a qualified public depository in accordance with the provisions of Chapter 280, Florida Statutes, which means that all deposits are fully insured by Federal Depositors Insurance or collateralized under Chapter 280, Florida Statutes.

As of September 30, 2018, the District had the following investments and maturities:

Investment		Maturities		Fair Value	
Managed Money Market		N/A		$	152,640	

The District categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The District uses a market approach in measuring fair value that uses prices and other relevant information generated by market transactions involving identical or similar assets, liabilities, or groups of assets and liabilities.

Assets or liabilities are classified into one of three levels. Level 1 is the most realizable and is based on quoted price for identical assets, or liabilities, in an active market. Level 2 uses significant other observable inputs when obtained quoted prices for identical or similar assets, or liabilities, in markets that are not active. Level 3 is the least reliable and uses significant unobservable inputs that uses the best information available under the circumstances which includes the District's own data in measuring unobservable inputs.

Based on the criteria in the preceding paragraph, the investment in Managed Money Market is a Level 1 asset.

NOTE C – CASH AND INVESTMENTS (CONTINUED)

Investments
The District’s investment policy allows management to invest funds in investments permitted under Section 218.415, Florida Statutes.
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The District's investments are limited by state statutory requirements and bond compliance.  The District has no investment policy that would further limit its investment choices.
Concentration of Credit Risk
The District places no limit on the amount it may invest in any one fund. The investments in Managed Money Market is 100% of the District’s total investments.
The types of deposits and investments and their level of risk exposure as of September 30, 2018 were typical of these items during the fiscal year then ended. The District considers any decline in fair value for certain investments to be temporary.

NOTE D – SPECIAL ASSESSMENT REVENUES
Assessments are non-ad valorem assessments on benefitted property within the District. Operating and Maintenance Assessments are based upon adopted budget and levied annually. Debt Service Assessments are levied when bonds are issued and collected annually. The District may collect assessments directly or utilize the uniform method of collection (Chapter 197.3632, Florida Statutes). Direct collected assessments are due as determined by annual assessment resolution adopted by the Board of Supervisors. Assessments collected under the uniform method are mailed by County Tax Collector on November 1 and due on or before March 31 of each year. Property owners may prepay a portion or all of the Debt Service Assessments on their property subject to various provisions in the bond documents.

Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.

NOTE E – CAPITAL ASSETS

Capital Asset activity for the year ended September 30, 2018 was as follows:

	Beginning			Ending	
	 	Balance		 	Additions		   Deletions 	 	Balance		
Governmental Activities:					
Capital assets, not being depreciated:	
Construction in progress	  $	- 	  $ 4,326,320 	  $	- 	  $ 4,326,320 	

NOTE F – LONG-TERM DEBT		
The following is a summary of activity for long-term debt September 30, 2018:	of	the	District for the year ended	
Long-term debt at October 1, 2017			$	-	
Issuance of long-term debt			 	4,710,000	
Long-term debt at September 30, 2018			$	4,710,000	
Special Assessment Revenue Bonds				
Long-term debt is comprised of the following:				
$4,710,000 Series 2017 Special Assessment Bonds due in				
annual principal installments beginning December 2018 and				
maturing December 2047. Interest is due semi-annually on				
June 15 and December 15, at various interest rates ranging				
between 3.500% and 5.000%. Current portion is $55,000.			$	4,710,000	
Bond premium, net			 	44,092	
Bonds Payable, Net			$	4,754,092	

NOTE F – LONG-TERM DEBT (CONTINUED)

The annual requirements to amortize the principal and interest of bonded debt outstanding as of September 30, 2018 are as follows:

Year Ending						
   September 30, 
2019	 	Principal	
$	55,000	 	Interest		 	Total		
		$	215,688	$	270,688	
2020	85,000		213,238		298,238	
2021	90,000		210,175		300,175	
2022	90,000		207,025		297,025	
2023	95,000		203,787		298,787	
2024-2028	525,000		962,263		1,487,263	
2029-2033	650,000		838,531		1,488,531	
2034-2038	805,000		671,828		1,476,828	
2039-2043	1,020,000		455,903		1,475,903	
2044-2048
Totals	 	1,295,000 
  $	4,710,000 	
  $		 	168,125 
4,146,563 	
  $		 	1,463,125 
8,856,563 	

Summary of Significant Bonds Resolution Terms and Covenants

Special Assessment Bonds, Series 2017
The Series 2017 Bonds are subject to redemption at the option of the District prior to their maturity, in whole or in part, at any time on or after December 15, 2028, at a redemption price equal to the principal amount of the Series 2017 Bonds to be redeemed, together with accrued interest to the date of redemption. The Series 2017 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Trust Indenture.

The Trust Indenture established certain amounts be maintained in a reserve account. In addition, the Trust Indenture has certain restrictions and requirements relating to the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements.

NOTE F – LONG-TERM DEBT (CONTINUED)

Depository Funds

The bond resolution establishes certain funds and determines the order in which revenues are to be deposited into these funds. A description of the significant funds, including their purposes, is as follows:

Reserve Fund – The Series 2017 Reserve Account was funded from the proceeds of the Series 2017 Bonds in an amount equal to 50% of the maximum annual debt service on the Series 2017 Bonds at issuance. Monies held in the reserve account will be used only for the purposes established in the Trust Indenture.

The following is a schedule of required reserve deposits as of September 30, 2018:

Reserve	Reserve	
 	Balance		 Requirement Series 2017 Special Assessment Bonds	 $		150,900	 $	150,088 	

NOTE G – RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. There were no claims filed within the past three years.

NOTE H – ECONOMIC DEPENDENCY
The Developer owns a significant portion of land within the District. The District’s activity is dependent upon the continued involvement of the Developer, the loss of which could have a material adverse effect on the District’s operations. At September 30, 2018, all board members were affiliated with the Developer.

NOTE I – SUBSEQUENT EVENT
In April 2019, the District issued $14,735,000, Special Assessment Bonds, Series 2019 to fund the cost of acquiring and constructing all or a portion of the 2019 Project.

r�tt Berger, Toombs, Elam, CO:, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120 // 461-1155
FAX: 772/468-9278

INDEPENDENT AUDITOR'S 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

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District Osceola County, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Stoneybrook South at ChampionsGate Community Development District, as of and for the year ended September 30, 2018, and the related notes to the financial statements, and have issued our report thereon dated June 26, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Stoneybrook South at ChampionsGate Community Development District's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Stoneybrook South at ChampionsGate Community Development District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Stoneybrook South at ChampionsGate Community Development District's internal control over financial 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control 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 that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Member AICPA

Fort Pierce / Stuart
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Member AICPA Division For CPA Firms Private Companies Practice Section

Member FICPA

��tt Berger, Toombs, Elam,
,OJ Gaines & Frank
CertifiedPublicAccountants PL

Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Stoneybrook South at ChampionsGate Community Development District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

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

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants
Fort Pierce, Florida June 26, 2019

- 31 -

r�tt Berger, Toombs, Elam, CO:, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120 // 461-1155
FAX: 772/468-9278

MANAGEMENT LETTER

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District Osceola County, Florida
Report on the Financial Statements

We have audited the financial statements of the Stoneybrook South at ChampionsGate Community Development District as of and for the year ended September 30, 2018, and have issued our report thereon dated June 26, 2019.
Auditor’s Responsibility

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

We have issued our Independent Auditor’s 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 and our Independent Auditor’s Report on an examination conducted in accordance with AICPA Professionals Standards, AT-C Section 315 regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in that report, which is dated June 26, 2019, should be considered in conjunction with this management letter.
Prior Audit Findings

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

Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, requires us to apply appropriate procedures and communicate the results of our determination as to whether or not Stoneybrook South at ChampionsGate Community Development District has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and to identify the specific conditions met. In connection with our audit, we determined that the Stoneybrook South at ChampionsGate Community Development District did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

Member AICPA

Fort Pierce / Stuart
- 32 -
Member AICPA Division For CPA Firms
Private Companies Practice Section

Member FICPA

��tt Berger, Toombs, Elam,
,OJ Gaines & Frank
CertifiedPublicAccountants PL

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District

Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied financial conditions assessment procedures as of September 30, 2018 for Stoneybrook South at ChampionsGate Community Development District. It is management’s responsibility to monitor the Stoneybrook South at ChampionsGate Community Development District’s financial condition; our financial condition assessment was based in part on the representations made by management and the review of the financial information provided by the same.

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations.

Additional Matters

Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not note any such findings.

Purpose of this Letter

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, the Board of Supervisors, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 26, 2019

- 33 -

r�tt Berger, Toombs, Elam, CO:, Gaines & Frank
Certified Public Accountants	PL
600 Citrus Avenue
Suite 200
Fort Pierce, Florida 34950
772/461-6120 // 461-1155
FAX: 772/468-9278

INDEPENDENT ACCOUNTANT’S REPORT/COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES

To the Board of Supervisors
Stoneybrook South at ChampionsGate Community Development District Osceola County, Florida

We have examined Stoneybrook South at ChampionsGate Community Development District's compliance with Section 218.415, Florida Statutes during the year ended September 30, 2018. Management is responsible for Stoneybrook South at ChampionsGate Community Development District’s compliance with those requirements. Our responsibility is to express an opinion on Stoneybrook South at ChampionsGate Community Development District’s compliance based on our examination.

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

In our opinion, Stoneybrook South at ChampionsGate Community Development District complied, in all material respects, with the aforementioned requirements during the year ended September 30, 2018.

Berger, Toombs, Elam, Gaines & Frank Certified Public Accountants PL
Fort Pierce, Florida June 26, 2019

Member AICPA

Fort Pierce / Stuart
- 34 -
Member AICPA Division For CPA Firms
Private Companies Practice Section

Member FICPA