CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT
MANATEE COUNTY, FLORIDA FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA

TABLE OF CONTENTS

	  Page		
INDEPENDENT AUDITOR’S REPORT	1-2	
MANAGEMENT’S DISCUSSION AND ANALYSIS	3-6	
BASIC FINANCIAL STATEMENTS		
Government-Wide Financial Statements:		
Statement of Net Position	7	
Statement of Activities	8	
Fund Financial Statements:		
Balance Sheet – Governmental Funds	9	
Reconciliation of the Balance Sheet – Governmental Funds		
to the Statement of Net Position	10	
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds	
11	
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities	
12	
Notes to Financial Statements	13-22	
REQUIRED SUPPLEMENTARY INFORMATION		
Schedule of Revenues, Expenditures and Changes in Fund Balance –
Budget and Actual – General Fund	
23	
Notes to Required Supplementary Information	24	
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	

25-26	
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10)
OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	

27	
MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA	
28-30	

INDEPENDENT AUDITOR’S REPORT
To the Board of Supervisors
Cross Creek Community Development District Manatee County, Florida

Report on the Financial Statements

951 Yamato Road ▪ Suite 280 Boca Raton, Florida 33431
(561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

We have audited the accompanying financial statements of the governmental activities and each major fund of Cross Creek Community Development District, Manatee County, Florida (“District”) as of and for the fiscal year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 opinions.

The District’s management was unable to provide sufficient competent evidential matter for certain expenditures of the general and debt service funds. The financial information of the general and debt service funds are part of the governmental activities and are considered major funds of the District.

Opinions

In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had the District been able to provide sufficient competent evidential matter for the selected expenditures of the general and debt service funds, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District as of September 30, 2017, and the respective changes in financial position, thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2018, 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, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Report on Other Legal and Regulatory Requirements

We have also issued our report dated December 4, 2018, on our consideration of the District’s compliance with the requirements of Section 218.415, Florida Statutes, as required by Rule 10.556(10) of the Auditor General of the State of Florida. The purpose of that report is to provide an opinion based on our examination conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.
December 4, 2018

MANAGEMENT’S DISCUSSION AND ANALYSIS
Our discussion and analysis of Cross Creek Community Development District, Manatee County, Florida (“District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2017. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.
FINANCIAL HIGHLIGHTS

The liabilities of the District exceeded its assets at the close of the most recent fiscal year resulting in a net position deficit balance of ($2,507,810).

The change in the District’s total net position in comparison with the prior fiscal year was ($1,688,528), a decrease. The key components of the District’s net position and change in net position are reflected in the table in the government-wide financial analysis section.
At September 30, 2017, the District’s governmental funds reported a combined ending fund balance of $2,998,364, an increase of $6,662,117 in comparison with the fiscal year. The fund balance is non- spendable for prepaid items, restricted for debt service and capital projects, and the remainder is unassigned deficit fund balance in the general fund.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as the introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the residual amount being reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.
The government-wide financial statements include all governmental activities that are principally supported by special assessment and Developer contributions. The District does not have any business-type activities. The governmental activities of the District include the general government (management) and maintenance functions.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category: governmental funds.

OVERVIEW OF FINANCIAL STATEMENTS (Continued)
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflow of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The District maintains three individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund and capital projects fund, which are all considered major funds.
The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. In the case of the District, liabilities exceeded assets at the close of the most recent fiscal year.
Key components of the District’s net position are reflected in the following table:

NET POSITION SEPTEMBER 30,
2017	2016	
Current and other assets	$	3,015,989	$	2,625,733	
Capital assets, net of depreciation	8,716,525	19,285,716	
Total assets	11,732,514	21,911,449	
Current liabilities	385,324	13,840,731	
Long-term liabilities	13,855,000	8,890,000	
Total liabilities	14,240,324	22,730,731	
Net Position
Net investment in capital assets	
(5,138,162)	
3,215,716	
Restricted	2,639,367	1,899,940	
Unrestricted	(9,015)	(5,934,938)	
Total net position	$  (2,507,810)	$	(819,282)	

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)
The District’s net position reflects its investment in capital assets (e.g. land, land improvements, and infrastructure); less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to residents; consequently, these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
The restricted portion of the District’s net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the District’s other obligations.
The District’s net position decreased during the most recent fiscal year. The majority of the decrease is due to the conveyance of infrastructure which occurred in the current fiscal year.
Key elements of the change in net position are reflected in the following table:

CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
2017	2016
Revenues:
Program revenues
Charges for services	
$	3,573,669	
$	88,043	
Operating grants and contributions	27,630	-	
Capital grants and contributions	501,063	-	
General revenues	4,065	80,108	
Total revenues	4,106,427	168,151	
Expenses:
General government	
192,686	
59,814	
Maintenance and operations	435,703	893	
Interest	810,904	996,386	
Bond issuance costs	252,827	-	
Conveyances of infrastructure	10,288,453	-	
Total expenses	11,980,573	1,057,093	
Special item - Restructuring Gain	6,185,618	-	
Change in net position	(1,688,528)	(888,942)	
Net position - beginning	(819,282)	69,660	
Net position - ending	$  (2,507,810)	$	(819,282)	

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2017 was $11,980,573. The costs of the District’s activities were primarily funded by program revenues. Program revenues, comprised primarily of assessments, increased during the current fiscal year as a result of an increase in prepayment revenue. Expenditures increased during the current fiscal year primarily as a result of conveyances of infrastructure which occurred during the current fiscal year.
GENERAL BUDGETING HIGHLIGHTS
An operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures for the fiscal year ended September 30, 2017 exceeded appropriations by $62,155.

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At September 30, 2017, the District had $9,117,605 invested in capital assets for its governmental activities. In the government-wide financial statements depreciation of $401,080 has been taken, which resulted in a net book value of $8,716,525. More detailed information about the District’s capital assets is presented in the notes of the financial statements.
Capital Debt
At September 30, 2017, the District had $13,855,000 in Bonds outstanding. More detailed information about the District’s capital debt is presented in the notes of the financial statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND OTHER EVENTS
The District does not anticipate any major projects or significant changes to its infrastructure maintenance program for the subsequent fiscal year. In addition, it is anticipated that the general operations of the District will remain fairly constant.
CONTACTING THE DISTRICTS FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, land owners, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Cross Creek Community Development District’s Finance Department at 12051 Corporate Blvd., Orlando, FL 32817.

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
STATEMENT OF NET POSITION SEPTEMBER 30, 2017

	Governmental
	Activities		
ASSETS		
Cash	$	4,409	
Accrued interest receivable	603	
Assessments receivable	352	
Prepaids and other	5,000	
Restricted assets:		
Investments	3,005,625	
Capital assets		
Nondepreciable	1,096,000	
Depreciable, net		7,620,525 	
Total assets		11,732,514 	
LIABILITIES		
Accounts payable	14,969	
Accrued interest payable	367,699	
Due to Bondholders:		
Interest	2,656	
Non-current liabilities:		
Due within one year	2,760,000	
Due in more than one year		11,095,000 	
Total liabilities		14,240,324 	
NET POSITION		
Net investment in capital assets	(5,138,162)	
Restricted for debt service	2,639,367	
Unrestricted		(9,015)	
Total net position	 $	(2,507,810)	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

Program Revenues
Charges	Operating	Capital

Net (Expense) Revenue and Changes in Net Position

for		Grants and		Grants and	Governmental Functions/Programs		Expenses	Services	Contributions	Contributions		Activities	 Primary government:
Governmental activities:
General government	$	192,686	$	36,603	$	25,035	$	-	$	(131,048)	
Maintenance and operations	435,703	-	-	501,063	65,360	
Interest on long-term debt	810,904	3,537,066	2,595	-	2,728,757	
Bond issuance costs					252,827		-		-		-			(252,827) Conveyances of infrastructure				10,288,453		-		-		-		(10,288,453) Total governmental activities			11,980,573	3,573,669	27,630	501,063	(7,878,211)

General revenues:		
Miscellaneous		4,065 	
Total general revenues		4,065 	
Special item - Restructuring Gain		6,185,618 	
Change in net position	(1,688,528)	
Net position - beginning		(819,282)	
Net position - ending	 $	(2,507,810)	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2017

	Major Funds		Total

Debt	Capital
General	Service	Projects

Governmental Funds

ASSETS		
Cash	$	4,409	$	-	$	-	$	4,409	
Investments	-	3,005,312	313	3,005,625	
Due from other funds	-	3,807	-	3,807	
Assessments receivable	352	-	-	352	
Accrued interest receivable	-	603	-	603	
Prepaids and other	5,000	-	-	5,000	
Total assets	$	9,761	$	3,009,722	$	313	$	3,019,796	

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable	$	14,969	$	-	$	-	$	14,969	
Due to other funds
Due to Bondholders:	3,807	-	-	3,807	
Interest	-	2,656	-	2,656	
Total liabilities	18,776	2,656	-	21,432	

Fund balances: Nonspendable:		

5,000		

-		

-		

5,000	
Restricted for:
Debt service		
-		
3,007,066		
-		
3,007,066	
Capital projects		-		-		313		313	
Unassigned		(14,015)		-		-		(14,015)	
Total fund balances		(9,015)		3,007,066		313		2,998,364	

Total liabilities, deferred inflows of resources and fund balances	

$	

9,761	

$	

3,009,722	

$	

313	

$	

3,019,796	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2017

Amounts reported for governmental activities in the statement of net position are different because:
Fund balances - governmental funds	$
Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds. The statement of net position includes those capital assets, net of accumulated depreciation, in the assets of the government as a whole.
Cost of capital assets	9,117,605

2,998,364

Accumulated depreciation		(401,080)	8,716,525
Liabilities not due and payable from current available resources are not reported as liabilities in the governmental fund statements.
Accrued interest payable	(367,699)	
Bonds payable *		(13,855,000)	(14,222,699)	
Net position of governmental activities	 $	(2,507,810)	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

	Major Funds		Total

REVENUES

Debt	Capital
General	Service	Projects

Governmental Funds

Assessments	$	36,603	$	3,537,066	$	-	$	3,573,669	
Developer contributions	25,000	-	500,047	525,047	
Interest	35	2,595	1,016	3,646	
Miscellaneous revenue	4,065	-	-	4,065	
Total revenues	65,703	3,539,661	501,063	4,106,427	

EXPENDITURES
Current:
General government	133,794	58,892	-	192,686	
Maintenance and operations	34,623	-	-	34,623	
Debt Service:
Principal	
-	
16,275,000	
-	
16,275,000	
Interest	-	814,450	-	814,450	
Bond issuance costs	-	-	252,827	252,827	
Capital outlay	-	-	120,342	120,342	
Total expenditures	168,417	17,148,342	373,169	17,689,928	

Excess (deficiency) of revenues
over (under) expenditures	(102,714)	

(13,608,681)	

127,894	

(13,583,501)	

OTHER FINANCING SOURCES
Transfer in (out)	

20,399	

2,007,122	

(2,027,521)	

-	
Bond proceeds	-	14,060,000	-	14,060,000	
Gain on restructuring	-	6,185,618	-	6,185,618	
Total other financing sources	20,399	22,252,740	(2,027,521)	20,245,618	

Net change in fund balances	
(82,315)	
8,644,059	
(1,899,627)	
6,662,117	
Fund balances - beginning	73,300	(5,636,993)	1,899,940	(3,663,753)	

Fund balances - ending	
$	(9,015)	
$	3,007,066	
$	313	
$	2,998,364	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

Net change in fund balances - total governmental funds	$ Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report the face amount of Bonds issued as financial resources when debt is first issued, whereas these amounts are eliminated in the statement of activities and recognized as long-term

6,662,117

liabilities in the statement of net position.	(14,060,000)	
Governmental funds report capital outlays as expenditures; however, the cost of capital assets is eliminated in the statement of activities and		
capitalized in the statement of net position.	120,342	
Depreciation of capital assets is not recognized in the governmental fund financial statements, but is reported as an expense in the statement of activities.	

(401,080)	
Repayment of long-term liabilities are reported as expenditures in the governmental fund statement but such repayments reduce liabilities in the		
statement of net position and are eliminated in the statement of activities.	16,275,000	
Conveyances of infrastructure improvements to other governments of previously capitalized capital assets is recorded as an expense in the statement of activities.	

(10,288,453)	
The change in accrued interest on long-term liabilities between the current and prior fiscal years is recorded in the statement of activities, but not in the governmental fund financial statements.	

	3,546 	
Change in net position of governmental activities	 $	(1,688,528)	

See notes to the financial statements

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY
Cross Creek Community Development District ("the District") was created on January 24, 2006 pursuant to Ordinance 06-21 enacted by the Board of County Commissioners of the Manatee County, Florida, under the "Uniform Community Development District Act of 1980", otherwise known as Chapter 190, Florida Statutes. The Act provides among other things, the power to manage basic services for community development, power to borrow money and issue Bonds, and to levy and assess non-ad valorem assessments for the financing and delivery of capital infrastructure.
The District was established for the purposes of financing and managing the acquisition, construction, maintenance and operation of a portion of the infrastructure necessary for community development within the District.
The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected by the owners of the property within the District. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2017, there are two vacant seats on the Board. The remaining Board members are affiliated with WHC at Gamble Creek LLC (“major landowner”).
The Board has the final 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.
Financing improvements.
The financial statements were prepared in accordance with Governmental Accounting Standards Board (“GASB”) Statements. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Government-Wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements.
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; operating-type special assessments for maintenance and debt service are treated as charges for services and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not included among program revenues are reported instead as general revenues.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and similar items are to be recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.
Assessments
Assessments are non-ad valorem assessments on certain land and all platted lots within the District. Assessments are levied each November 1 on property of record as of the previous January. The fiscal year for which annual assessments are levied begins on October 1 with discounts available for payments through February 28 and become delinquent on April 1. For debt service assessments, amounts collected as advance payments are used to prepay a portion of the Bonds outstanding. Otherwise, assessments are collected annually to provide funds for the debt service on the portion of the Bonds which are not paid with prepaid assessments.
Assessments and interest associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period.

The District reports the following major governmental funds:

General Fund
The general fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund.

Debt Service Fund
The debt service fund is used to account for the accumulation of resources for the annual payment of principal and interest on long-term debt.
Capital Projects Fund
This fund accounts for the financial resources to be used for the acquisition or construction of major infrastructure within the District.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.
When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed.

Assets, Liabilities and Net Position or Equity
Restricted Assets
These assets represent cash and investments set aside pursuant to Bond covenants or other contractual restrictions.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Assets, Liabilities and Net Position or Equity (Continued)
Deposits and Investments
The District’s cash and cash equivalents are considered to be cash on hand and demand deposits (interest and non-interest bearing).
The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section
218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following:
The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Inter-local Cooperation Act;
Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency;
Interest bearing time deposits or savings accounts in qualified public depositories;
Direct obligations of the U.S. Treasury.
Securities listed in paragraph c and d shall be invested to provide sufficient liquidity to pay obligations as they come due. In addition, surplus funds may be deposited into certificates of deposit which are insured and any unspent Bond proceeds are required to be held in investments as specified in the Bond Indenture.
The District records all interest revenue related to investment activities in the respective funds. Investments are measured at amortized cost or reported at fair value as required by generally accepted accounting principles.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, sidewalks and similar items) are reported in the government activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives:

Assets	Years	
Infrastructure	20	
Amenity center	20	

In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are reported as fund expenditures. Depreciation expense is not reported in the governmental fund financial statements.

Unearned Revenue
Governmental funds report unearned revenue in connection with resources that have been received, but not yet earned.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Assets, Liabilities and Net Position or Equity (Continued)

Long-Term Obligations
In the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized ratably over the life of the Bonds. Bonds payable are reported net of applicable premiums or discounts. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Deferred Outflows/Inflows of Resources
Deferred outflows of resources represent a consumption of net position that applies to future reporting period(s). For example, the District would record deferred outflows of resources on the statement of net position related to debit amounts resulting from current and advance refundings resulting in the defeasance of debt (i.e. when there are differences between the reacquisition price and the net carrying amount of the old debt).
Deferred inflows of resources represent an acquisition of net position that applies to future reporting period(s). For example, when an asset is recorded in the governmental fund financial statements, but the revenue is unavailable, the District reports a deferred inflow of resources on the balance sheet until such time as the revenue becomes available.
Fund Equity/Net Position
In the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change.
The District can establish limitations on the use of fund balance as follows:
Committed fund balance – Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category.
Assigned fund balance – Includes spendable fund balance amounts established by the Board of Supervisors that are intended to be used for specific purposes that are neither considered restricted nor committed. The Board may also assign fund balance as it does when appropriating fund balance to cover differences in estimated revenue and appropriations in the subsequent year’s appropriated budget. Assignments are generally temporary and normally the same formal action need not be taken to remove the assignment.
The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.
Net position is the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position in the government-wide financial statements are categorized as net investment in capital assets, restricted or unrestricted. Net investment in capital assets represents net position related to infrastructure and property, plant and equipment. Restricted net position represents the assets restricted by the District’s Bond covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Other Disclosures
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires 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 financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

NOTE 3 – BUDGETARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual appropriations lapse at fiscal year-end.
The District follows these procedures in establishing the budgetary data reflected in the financial statements.
Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.
Public hearings are conducted to obtain public comments.
Prior to October 1, the budget is legally adopted by the District Board.
All budget changes must be approved by the District Board.
The budgets are adopted on a basis consistent with generally accepted accounting principles.
Unused appropriation for annually budgeted funds lapse at the end of the year.

NOTE 4 – DEPOSITS AND INVESTMENTS

Deposits
The District’s cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Florida Statutes Chapter 280, "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.
Investments
The District’s investments were held as follows at September 30, 2017:
Amortized cost	Maturities	Credit Risk

Fidelity Govt Portfolio Cl III First American Government

$	206,801

Not available	Not available Weighted average of

Obligation Fund Cl Y	2,798,824	the fund portfolio: 23	S&P AAAm
Total	$	3,005,625

Credit risk – For investments, credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Investment ratings by investment type are included in the preceding summary of investments.
Concentration risk – The District places no limit on the amount the District may invest in any one issuer.
Interest rate risk – The District does not have a formal policy that limits investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates.
However, the Bond Indenture limits the type of investments held using unspent proceeds.

NOTE 4 – DEPOSITS AND INVESTMENTS (Continued)

Investments (Continued)
Fair Value Measurement – When applicable, the District measures and records its investments using fair value measurement guidelines established in accordance with GASB Statements. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques.
These guidelines recognize a three-tiered fair value hierarchy, in order of highest priority, as follows:
Level 1: Investments whose values are based on unadjusted quoted prices for identical investments in active markets that the District has the ability to access;
Level 2: Investments whose inputs - other than quoted market prices - are observable either directly or indirectly; and,
Level 3: Investments whose inputs are unobservable.
The fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the entire fair value measurement. Valuation techniques used should maximize the use of observable inputs and minimize the use of unobservable inputs.
Money market investments that have a maturity at the time of purchase of one year or less and are held by governments other than external investment pools should be measured at amortized cost. Accordingly, the District’s investments have been reported at amortized cost above.

NOTE 5 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

Interfund receivables and payables at September 30, 2017 were as follows:

	Receivable	Payable	
General
Debt service		$	-
3,807	$	3,807
-	
Total		$	3,807	$	3,807	

The outstanding balances between funds result primarily from the time lag between the dates that transactions are recorded in the accounting system and payments between funds are made. In the case of the District, the balances between the general fund and the debt service fund relate to assessments collected in the general fund that have not yet been transferred to the debt service fund.
Interfund transfers for the fiscal year ended September 30, 2017 were as follows:

	Transfer in	Transfer out	
General		$	20,399	$	-	
Debt service
Capital projects		2,007,122
-	-
2,027,521	
Total		$  2,027,521	$  2,027,521	

Transfers are used to move revenues from the fund where collection occurs to the fund where funds have been reallocated for use. In the case of the District, all transfers were made in accordance with the Bond Indentures.

NOTE 6 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2017 was as follows:

Beginning
Balance	Additions	Reductions

Ending Balance

Governmental activities
Capital assets, not being depreciated		
Land and land improvements	$ 1,096,000	$	-	$	-	$ 1,096,000	
Infrastructure under construction	18,189,716	120,342	18,310,058	-	
Total capital assets, not being depreciated	19,285,716	120,342	18,310,058	1,096,000	

Capital assets, being depreciated Infrastructure	

-	

3,939,782	

-	

3,939,782	
Amenity center	-	4,081,823	-	4,081,823	
Total capital assets, being depreciated	-	8,021,605	-	8,021,605	

Less accumulated depreciation for: Infrastructure	

-	

196,989	

-	

196,989	
Amenity center	-	204,091	-	204,091	
Total accumulated depreciation	-	401,080	-	401,080	

Total capital assets, being depreciated, net	
-	
7,620,525	
-	
7,620,525	

Governmental activities capital assets	
$19,285,716	
$ 7,740,867	
$18,310,058	
$ 8,716,525	

During the current fiscal year, the project was completed as assets were placed in service. In addition, there were conveyances totaling $10,288,453 made to other entities.
Depreciation expense was charged to the maintenance and operations function.

NOTE 7 - LONG TERM LIABILITIES

Series 2007
During fiscal year 2007, the District issued $10,105,000 of Special Assessment Revenue Bonds, Series 2007 consisting of $10,205,000 Term Bonds Series 2007A due on May 1, 2039 with a fixed interest rate of 5.6% and $28,385,000 Term Bonds Series 2007B due on May 1, 2017 with a fixed interest rate of 5.5%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1. Principal on the 2007A Bonds is to be paid serially commencing May 1, 2009 through May 1, 2039.
The Series 2007A Bonds are subject to redemption at the option of the District prior to maturity in whole or in part on any interest payment date on or after May 1, 2017. The Series 2007B Bonds are not subject to redemption at the option of the District prior to maturity. The Series 2007A and 2007B 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 Bond Indenture. See Note – 13 Subsequent Events for extraordinary redemption amounts subsequent to year end.
On October 30, 2009, the District tendered a portion of their outstanding Bonds through a tender offer program with the consent and approval of the majority of the bondholders. With this program, the District has purchased at a discount and then cancelled $21,200,000 of Series 2007B Bonds outstanding. The tender offer resulted in a gain on the retirement of long-term debt of $10,081,934. The funds used for the tender offer became available due to a change in the scope of the 2007 project.
The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and 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. The District was in compliance with the requirements at September 30, 2017.

NOTE 7 - LONG TERM LIABILITIES (Continued)

Series 2007 (Continued)
During the prior and current fiscal years, the Developer failed to make payment on the special assessments which ultimately secure the Bonds. As a result, certain scheduled debt service payments were made, in part, by draws on the Debt Service Reserve Account and certain payments were not made. The failure by the District to pay its debt service is considered an event of default. The default was cured in the current fiscal year as the District restructured the defaulted Bonds by issuing the Series 2016 Bonds in order to exchange the Bonds; see Note 7 - Series 2016 for further details on restructuring.
Series 2016
On December 22, 2016, the District issued $14,060,000 of Special Assessment Revenue Bonds, Series 2016 which are comprised of $4,465,000 of the Series 2016A Bonds due May 1, 2037 with a fixed interest rate of 5.6% and $9,595,000 of the Series 2016B Bonds due November 1, 2021 with a fixed interest rate of 6.75%. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Series 2016A Bonds is to be paid serially commencing May 1, 2017 through May 1, 2037 and principal on the Series 2016B Bonds is to be paid serially commencing November 1, 2017 through November 1, 2021.
The Bonds were issued to restructure and exchange the defaulted Series 2007A and 2007B Bonds (the “Exchanged Bonds”) and pay certain costs associated with the issuance of the Bonds. In the course of the restructuring and exchange, the District exchanged all but $155,000 of the outstanding Series 2007A Bonds and $95,000 of the outstanding Series 2007B Bonds. The District used funds on hand from the Series 2007 trust accounts in order to pay off $2,250,000 of delinquent interest, and the remaining delinquent principal and interest amounts were forgiven. This resulted in a restructuring gain of $ 6,185,618 being recognized.
The Series 2016 Bonds are subject to redemption at the option of the District prior to maturity. The Series 2016 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 Bond Indenture. For the Series 2016 Bonds, this occurred during the current fiscal year as the District collected prepaid assessments and prepaid
$405,000 of the Bonds. In addition, see Note – 13 Subsequent Events for extraordinary redemption amounts subsequent to year end.
The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally 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. The District was in compliance with the requirements at September 30, 2017.
Long-term Debt Activity
Changes in long-term liability activity for the fiscal year ended September 30, 2017 were as follows:

	Beginning
Balance	
Additions	
Reductions	Ending
Balance	Due Within
One Year	
Governmental activities Series 2007A	
$10,070,000	
$	-	
$ 9,920,000	
$	150,000	
$	5,000	
Series 2007B	6,990,000	-	6,895,000	95,000	95,000	
Series 2016A	-	4,465,000	125,000	4,340,000	125,000	
Series 2016B	-	9,595,000	325,000	9,270,000	2,535,000	
Total	$17,060,000	$14,060,000	$17,265,000	$13,855,000	$ 2,760,000	

NOTE 7 - LONG TERM LIABILITIES (Continued)

Long-term Debt Activity (Continued)
At September 30, 2017, the scheduled debt service requirements on the long-term debt were as follows:
Governmental Activities
Year ending
September 30:	
Principal	
Interest	
Total	
2018	$	2,760,000	$	796,834	$	3,556,834	
2019	2,670,000	613,216	3,283,216	
2020	1,230,000	483,481	1,713,481	
2021	1,235,000	402,124	1,637,124	
2022	2,185,000	288,593	2,473,593	
2023-2027	925,000	959,000	1,884,000	
2028-2032	1,215,000	670,040	1,885,040	
2033-2037	1,615,000	286,720	1,901,720	
2038-2039	20,000	1,680	21,680	
Total	$ 13,855,000	$	4,501,688	$ 18,356,688	

NOTE 8 – DEFICIT FUND EQUITY

The general fund had a deficit fund balance of ($9,015) at September 30, 2017. The deficit will be covered by assessments collected in the subsequent period.

NOTE 9 – RELATED PARTY TRANSACTIONS
The major landowner owns a portion of land within the District; therefore, assessment revenues in the general and debt service funds include the assessments levied on those lots owned by the major landowner.
The major landowner has agreed to fund the general operations of the District. In connection with that agreement, major landowner contributions to the general fund were $25,000.
The major landowner made a contribution in the amount of $500,047 during the restructuring of the default Series 2007 Bonds which has been recorded in the capital projects fund.

NOTE 10 – CONCENTRATION
The District’s activity is dependent upon the continued involvement of the major landowner, the loss of which could have a material adverse effect on the District’s operations.

NOTE 11 - MANAGEMENT COMPANY
The District has contracted with a management company to perform management services, which include financial and accounting services. Certain employees of the management company also serve as officers of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer and other administrative costs.

NOTE 12 - 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. The District has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. There were no settled claims during the past three years.

NOTE 13 - CONTINGENCY

In a prior fiscal year, the District entered a lawsuit against the former management company alleging that the former management company misappropriated funds totaling approximately $130,000. Subsequent to fiscal year end, a settlement agreement was reached whereby the former management company agreed to pay the District $5,000.

NOTE 14 - SUBSEQUENT EVENTS

Series 2007B Bonds Paid Off
In May 2018, the District paid off the remaining Series 2007B Bonds in the amount of $95,000 thus fully extinguishing them. In addition, the District also paid off $2,656 of delinquent interest on those Bonds at the time of extinguishment.

Bond Payments
Subsequent to fiscal year end, the District prepaid a total of $45,000 of the Series 2007A Bonds, $510,000 of the Series 2016A Bonds, and $780,000 of the Series 2016B Bonds. The prepayments were considered extraordinary mandatory redemptions as outlined in the Bond Indenture.

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2017

Budgeted		Variance
with Final	
		Amounts	
Original &	
Actual	Budget -
Positive	
	Final	Amounts	(Negative)	
REVENUES
Assessments	
$	106,262	
$	36,603	
$	(69,659)	
Developer contributions	-	25,000	25,000	
Interest	-	35	35	
Miscellaneous revenue	-	4,065	4,065	
Total revenues	106,262	65,703	(40,559)	

EXPENDITURES
Current:
General government	82,287	133,794	(51,507)	
Maintenance and operations	23,975	34,623	(10,648)	
Total expenditures	106,262	168,417	(62,155)	
Excess (deficiency) of revenues over (under) expenditures	

-	

(102,714)	

(102,714)	

OTHER FINANCING SOURCES (USES)
Transfer in (out)	-	20,399	20,399	
Total other financing sources (uses)	-	20,399	20,399	

Net change in fund balances	
 $	-		
(82,315)  $	(82,315)	
Fund balance - beginning			73,300 	
Fund balance - ending		 $	(9,015)	

See notes to required supplementary information

CROSS CREEK COMMUNITY DEVELOPMENT DISTRICT MANATEE COUNTY, FLORIDA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget for the general fund. The District’s budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The budget approximates a basis consistent with accounting principles generally accepted in the United States of America (generally accepted accounting principles).
The legal level of budgetary control, the level at which expenditures may not exceed budget, is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. Actual general fund expenditures for the fiscal year ended September 30, 2017 exceeded appropriations by $62,155.

951 Yamato Road ▪ Suite 280 Boca Raton, Florida 33431
(561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

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
Cross Creek Community Development District Manatee 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 the governmental activities and each major fund of Cross Creek Community Development District, Manatee County, Florida (“District”) as of and for the fiscal year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our opinion thereon dated December 4, 2018, which includes an explanatory paragraph regarding the modified opinions for the general and debt service funds due to the lack of sufficient competent evidential matter.
Internal Control Over Financial Reporting

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

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. As discussed in the accompanying report to management dated December 4, 2018, we considered findings 2017-01 and 2017-02 to be material weaknesses in internal controls over financial reporting.
Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and 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.

We noted certain matters that we reported to management of the District in a separate letter dated December 4, 2018.

The District's responses to the findings identified in our audit are described in the accompanying Management Letter. We did not audit the District's responses and, accordingly, we express no opinion on them.
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.

December 4, 2018

951 Yamato Road ▪ Suite 280 Boca Raton, Florida 33431
(561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE REQUIREMENTS OF SECTION 218.415, FLORIDA STATUTES, REQUIRED BY RULE 10.556(10) OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

To the Board of Supervisors
Cross Creek Community Development District Manatee County, Florida

We have examined Cross Creek Community Development District, Manatee County, Florida’s (“District”) compliance with the requirements of Section 218.415, Florida Statutes, in accordance with Rule 10.556(10) of the Auditor General of the State of Florida during the fiscal year ended September 30, 2017. Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the District complied, in all material respects, with the specified requirements referenced in Section 218.415, Florida Statutes. An examination involves performing procedures to obtain evidence about whether the District complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the District’s compliance with specified requirements.
In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2017.
This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, management, and the Board of Supervisors of Cross Creek Community Development District, Manatee County, Florida and is not intended to be and should not be used by anyone other than these specified parties.

December 4, 2018

951 Yamato Road ▪ Suite 280 Boca Raton, Florida 33431
(561) 994-9299 ▪ (800) 299-4728
Fax (561) 994-5823
www.graucpa.com

MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL FOR THE STATE OF FLORIDA

To the Board of Supervisors
Cross Creek Community Development District Manatee County, Florida

Report on the Financial Statements
We have audited the accompanying basic financial statements of Cross Creek Community Development District, Manatee County, Florida ("District") as of and for the fiscal year ended September 30, 2017, and have issued our report thereon dated December 4, 2018, which includes an explanatory paragraph regarding the modified opinions for the general and debt service funds due to the lack of sufficient competent evidential matter.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.

Other 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 the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Auditor’s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated December 4, 2018, should be considered in conjunction with this management letter.
Purpose of this Letter
The purpose of this letter is to comment on those matters required by Chapter 10.550 of the Rules of the Auditor General for the State of Florida. Accordingly, in connection with our audit of the financial statements of the District, as described in the first paragraph, we report the following:
Current year findings and recommendations.
Status of prior year findings and recommendations.
Compliance with the Provisions of the Auditor General of the State of Florida.
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, as applicable, management, and the Board of Supervisors of Cross Creek Community Development District, Manatee County, Florida and is not intended to be and should not be used by anyone other than these specified parties.
We wish to thank Cross Creek Community Development District, Manatee County, Florida and the personnel associated with it, for the opportunity to be of service to them in this endeavor as well as future engagements, and the courtesies extended to us.

December 4, 2018

REPORT TO MANAGEMENT

CURRENT YEAR FINDINGS AND RECOMMENDATIONS

Material Weaknesses

2017-01 Adjusting Journal Entries
Observation: During the course of conducting procedures for the audit of the fiscal year ended September 30, 2017, we proposed numerous adjusting journal entries to correct bookkeeping errors and to make adjustments to various revenue, expenditure, and liability accounts that should have been reconciled prior to the start of the audit.
Recommendation: We believe that stricter oversight of the review process and a closer evaluation by management of transactions recorded by accounting personnel would help ensure that proper monthly and year end closing procedures are being performed and that transactions have been recorded correctly. This should be evidenced by a sign-off as support of the review process.
Management Response: The district has implemented internal control to correct bookkeeping errors and help ensure proper monthly and year end closing.

2017-02 Supporting Documentation and Explanations
Observation: During the course of conducting procedures for the audit of the fiscal year ended September 30, 2017, management was unable to provide us with proper documentation for certain recorded balances and transactions pertaining to the general and debt service funds. In addition, upon our inquiries, management was unable to provide explanations for certain noted variances and recorded transactions.
Recommendation: Management should keep proper supporting documentation for all recorded balances, journal entries, and transactions.
Management Response: Management was not provided all documentation from prior management company.

Other Findings

2017-03 Audit Report and Annual Financial Report Filing

Observation: Florida Statutes require governmental entities to file an annual financial report and a copy of the financial audit with the State within 9 months of the end of the fiscal year. Both the annual financial report and the annual audit report for the fiscal year ended September 30, 2017 were not filed by June 30, 2017.
Recommendation: We recommend that the District take the necessary steps to comply with the Florida Statutes and file both reports within the statutory time frames.
Management Response: The district intends to follow the recommendation, subject to receipt of sufficient funding.

2017-04 Budget:

Observation: Actual expenditures exceeded appropriations in the general fund for the fiscal year ended September 30, 2017.
Recommendation: The District should amend the budget during the fiscal year or within statutory guidelines to ensure that all expenditures are properly budgeted.
Management Response: The district intends to follow the recommendation, subject to receipt of sufficient funding.

REPORT TO MANAGEMENT (Continued)

PRIOR YEAR FINDINGS AND RECOMMENDATIONS

2011-02, 2012-02, 2013-02, 2014-01, 2015-01, 2016-01 Financial Condition Assessment
Current Status: Finding has been resolved.

2011-03, 2012-03, 2013-03, 2014-02, 2015-02, 2016-02 Audit Report and Annual Financial Report Filing
Current Status: See finding no. 2017-03 above.

2011-04, 2012-04, 2013-04, 2014-03, 2015-03, 2016-03 Reserve Requirement
Current Status: Finding has been resolved.

2014-04, 2015-04, 2016-04 Supporting Documentation
Current Status: See finding no. 2017-02 above.

COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA
Unless otherwise required to be reported in the auditor’s report on compliance and internal controls, the management letter shall include, but not be limited to the following:

A statement as to whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report.

There were no significant findings and recommendations made in the preceding annual financial audit report for the fiscal year ended September 30, 2016, except as noted above.
Any recommendations to improve the local governmental entity's financial management.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported for the fiscal year ended September 30, 2017, except as noted above.
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.
There were no such matters discovered by, or that came to the attention of, the auditor, to be reported, for the fiscal year ended September 30, 2017, except as noted above.
The name or official title and legal authority of the District are disclosed in the notes to the financial statements.
The financial report filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes agrees with the September 30, 2017 financial audit report.

The District has not met one or more of the financial emergency conditions described in Section 218.503(1), Florida Statutes.

We applied financial condition assessment procedures and no deteriorating financial conditions were noted as of September 30, 2017. It is management’s responsibility to monitor financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same.