CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, 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 the Financial Statements 13-21 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 22 Notes to Required Supplementary Information 23 OTHER INFORMATION Data Elements required by FL Statute 218.39 (3) (c) 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 REQUIRED BY CHAPTER 10.550 OF THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 28-29 INDEPENDENT AUDITOR’S REPORT To the Board of Supervisors Canopy Community Development District City of Tallahassee, Florida Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities and each major fund of Canopy Community Development District, City of Tallahassee, Florida (“District”) as of and for the fiscal year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, 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, 2023, and the respective changes in financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. 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 is the responsibility of management and, 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 Information Included in the Financial Report Management is responsible for the other information included in the financial report. The other information comprises the information for compliance with FL Statute 218.39 (3) (c) but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 17, 2024, 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 solely 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 the effectiveness of the District’s 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. June 17, 2024 MANAGEMENT’S DISCUSSION AND ANALYSIS Our discussion and analysis of Canopy Community Development District, City of Tallahassee, Florida (“District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2023. 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 assets of the District exceeded its liabilities at the close of the most recent fiscal year resulting in a net position balance of $14,694,998. • The change in the District’s total net position in comparison with the prior fiscal year was $1,233,991, an increase. 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, 2023, the District’s governmental funds reported combined ending fund balances of $355,707, a decrease of ($248,116) in comparison with the prior fiscal year. The total fund balance is non-spendable for prepaid items and deposits, 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 are intended to serve as the introduction to the District’s 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 revenues and Developer contributions. The District does not have any business-type activities. The governmental activities of the District include the general government (management), recreation 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 outflows 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 balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains three governmental funds for external reporting. 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, all of which are 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, assets exceeded liabilities at the close of the most recent fiscal year. Key components of the District’s net position are reflected in the following table: 20232022Current and other assets362,962$ 1,085,936$ Capital assets, net of depreciation22,546,273 22,337,017 Total assets22,909,235 23,422,953 Current liabilities209,237 856,946 Long-term liabilities8,005,000 9,105,000 Total liabilities8,214,237 9,961,946 Net positionNet investment in capital assets14,541,273 12,853,026 Restricted 124,708 353,617 Unrestricted29,017 254,364 Total net position 14,694,998$ 13,461,007$ NET POSITIONSEPTEMBER 30, 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 increased during the most recent fiscal year. The majority of the increase represents the extent to which ongoing program revenues exceeded the cost of operations. Key elements of the change in net position are reflected in the following table: 20232022Revenues: Program revenuesCharges for services1,627,541$ 1,839,795$ Operating grants and contributions70,002 285 Capital grants and contributions413,066 53,505 General revenuesMiscellaneous175 9,490,204 Total revenues2,110,784 11,383,789 Expenses: General government110,608 143,723 Physical environment153,242 119,200 Parks and recreation92,728 58,895 Interest520,215 589,066 Total expenses876,793 910,884 Change in net position1,233,991 10,472,905 Net position - beginning13,461,007 2,988,102 Net position - ending14,694,998$ 13,461,007$ CHANGES IN NET POSITIONFOR THE FISCAL YEAR ENDED SEPTEMBER 30, As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2023 was $876,793. The majority of the costs of the District’s activities were paid by program revenues. Program revenues are comprised primarily of assessments and Developer contributions. Revenues decreased due a significant amount of intergovernmental revenue related to infrastructure in the prior fiscal year. Expenses decreased mainly as a result of a decrease in interest expenses. 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 did not exceed appropriations for the fiscal year ended September 30, 2023. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At September 30, 2023, the District had $22,546,273 invested in capital assets for its governmental activities. No depreciation has been taken in the current fiscal year as the District’s infrastructure and other capital assets are under construction. More detailed information about the District’s capital assets is presented in the notes of the financial statements. Capital Debt At September 30, 2023, the District had $8,005,000 in Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes of the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS The District does not anticipate any major projects or significant changes to its infrastructure maintenance program for the subsequent fiscal year. In addition, it is anticipated that the general operations of the District will remain fairly constant. CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, land owners, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Canopy Community Development District’s Finance Department at 393 Palm Coast Pkwy SW #4, Palm Coast, FL 32137. CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2023 ASSETSCash5,071$ Investments10,469 Assessments receivable121 Prepaid items and deposits20,611 Restricted assets: Investments326,690 Capital assets: Depreciable, net 22,546,273 Total assets22,909,235 LIABILITIESAccounts payable 7,255 Accrued interest payable201,982 Non-current liabilities: Due within one year125,000 Due in more than one year7,880,000 Total liabilities8,214,237 NET POSITIONNet investment in capital assets14,541,273 Restricted for debt service124,708 Unrestricted29,017 Total net position 14,694,998$ Governmental Activities See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 Functions/ProgramsExpensesPrimary government: Governmental activities: General government110,608$ 110,608$ 52,640$ -$ 52,640$ Physical environment153,242 215,967 - 412,893 475,618 Culture and recreation92,728 - - - (92,728) Interest on long-term debt520,215 1,300,966 17,362 173 798,286 Total governmental activities876,793 1,627,541 70,002 413,066 1,233,816 General revenues: Miscellaneous175 Total general revenues175 Change in net position1,233,991 Net position - beginning13,461,007 Net position - ending 14,694,998$ Program RevenuesNet (Expense) Revenue and Changes in Net PositionCharges for ServicesOperating Grants and ContributionsCapital Grants and ContributionsGovernmental Activities See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2023 GeneralASSETSCash3,250$ -$ 1,821$ 5,071$ Investments- 326,690 10,469 337,159 Assessments receivable121 - - 121 Prepaid items and deposits20,611 - - 20,611 Total assets23,982$ 326,690$ 12,290$ 362,962$ LIABILITIES AND FUND BALANCESLiabilities: Accounts payable7,255$ - - 7,255$ Total liabilities7,255 - - 7,255 Fund balances: Nonspendable: Prepaid items and deposits20,611 - - 20,611 Restricted for: Debt service- 326,690 - 326,690 Capital projects - - 12,290 12,290 Unassigned(3,884) - - (3,884) Total fund balances 16,727 326,690 12,290 355,707 Total liabilities and fund balances 23,982$ 326,690$ 12,290$ 362,962$ Total Governmental FundsMajor FundsDebt ServiceCapital Projects See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2023 Fund balance - governmental funds $ 355,707 Amounts reported for governmental activities in the statement of net position are different because: Cost of capital assets 22,546,273 Accumulated depreciation - 22,546,273 Accrued interest payable (201,982) Bonds payable (8,005,000) (8,206,982) Net position of governmental activities $ 14,694,998 Capitalassetsusedingovernmentalactivitiesarenotfinancialresourcesand,therefore,arenotreportedasassetsinthegovernmentalfunds.Thestatementofnetpositionincludesthosecapitalassets,netofanyaccumulateddepreciation,inthe net position of the government as a whole. Liabilitiesnotdueandpayablefromcurrentavailableresourcesarenotreportedasliabilitiesinthegovernmentalfundstatements.Allliabilities,bothcurrentandlong-term,arereported in the government-wide financial statements. See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 GeneralREVENUESAssessments326,575$ 1,300,966$ -$ 1,627,541$ Developer contributions52,640 - 412,893465,533 Miscellaneous175 - - 175 Interest earnings- 17,362 173 17,535 Total revenues379,390 1,318,328 413,066 2,110,784 EXPENDITURESCurrent: General government110,608 - - 110,608 Physical environment153,242- - 153,242 Culture and recreation92,728- - 92,728 Debt service: Principal- 1,240,000 - 1,240,000 Interest- 553,066 - 553,066 Capital outlay- - 209,256 209,256 Total expenditures356,578 1,793,066 209,256 2,358,900 Excess (deficiency) of revenuesover (under) expenditures22,812 (474,738) 203,810 (248,116) OTHER FINANCING SOURCES (USES) Transfers in- - 6,5706,570 Transfers out- (6,570) - (6,570) Total other financing sources (uses)- (6,570) 6,570 - Net change in fund balances22,812 (481,308) 210,380 (248,116) Fund balances - beginning(6,085) 807,998 (198,090) 603,823 Fund balances - ending16,727$ 326,690$ 12,290$ 355,707$ Major FundsTotal Governmental FundsDebt ServiceCapital Projects See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, 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, 2023 Net change in fund balances - total governmental funds $ (248,116) Amounts reported for governmental activities in the statement of activities are different because: 209,256 1,240,000 32,851 Change in net position of governmental activities $ 1,233,991 Repaymentoflong-termliabilitiesarereportedasexpendituresinthegovernmentalfundfinancialstatements,butsuchrepaymentsreduceliabilitiesinthestatementofnetpositionandareeliminatedinthestatement of activities. Thechangeinaccruedinterestonlong-termliabilitiesbetweenthecurrentandpriorfiscalyearisrecordedinthestatementofactivitiesbutnotinthegovernmental fund financial statements. Governmentalfundsreportcapitaloutlaysasexpenditures;however,thecostofcapitalassetsiseliminatedinthestatementofactivitiesandcapitalized in the statement of net position. See notes to the financial statements CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA NOTES TO FINANCIAL STATEMENTS NOTE 1 - NATURE OF ORGANIZATION AND REPORTING ENTITY Canopy Community Development District (the "District") was established by the City Commission of the City of Tallahassee Ordinance 17-O-08 effective on May 24, 2017 pursuant to 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 purpose of financing and managing the acquisition, construction, maintenance and operations of the infrastructure within the District. The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected on an at large basis by registered voters residing within the District. The Board exercises all powers granted to the District pursuant to Chapter 190, Florida Statutes. At September 30, 2023, two Board members are affiliated with Ox Bottom Mortgage Holdings, LLC (“Developer”). The Board has the responsibility for: 1. Allocating and levying assessments. 2. Approving budgets. 3. Exercising control over facilities and properties. 4. Controlling the use of funds generated by the District. 5. Approving the hiring and firing of key personnel. 6. 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 residents and non-residents of the District 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 benefited property within the District. Operating and maintenance assessments are based upon the adopted budget and levied annually at a public hearing of the District. Debt service assessments are levied when Bonds are issued and certified for collection on an annual basis. The District may collect assessments directly or utilize the uniform method of collection under 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 the 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 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. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position or Equity Restricted Assets These assets represent cash and investments set aside pursuant to Note covenants or other contractual restrictions. 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: a) The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act; b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; c) Interest bearing time deposits or savings accounts in qualified public depositories; d) 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. 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 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 acquisition 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. No depreciation has been taken in the current fiscal year as the District’s infrastructure and other capital assets are under construction. 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. Note premiums and discounts are deferred and amortized over the life of the Notes. Notes payable are reported net of applicable premiums or discounts. Note 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 In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Fund Equity/Net Position In the fund financial statements, governmental funds report nonspendable 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 difference 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 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position or Equity (Continued) 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 Note covenants or other contractual restrictions. Unrestricted net position consists of the net position not meeting the definition of either of the other two components. 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. The District follows these procedures in establishing the budgetary data reflected in the financial statements. a) Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1. b) Public hearings are conducted to obtain comments. c) Prior to October 1, the budget is legally adopted by the District Board. d) All budget changes must be approved by the District Board. e) The budgets are adopted on a basis consistent with generally accepted accounting principles. f) Unused appropriations 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, 2023: Amortized CostCredit RiskMaturitiesUS Bank Money Market Fund337,159$ N/AN/A337,159$ NOTE 4 - DEPOSITS AND INVESTMENTS (Continued) Investments (Continued) 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. 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 TRANSFERS Interfund transfers for the fiscal year ended September 30, 2023 were as follows: FundTransfer in Transfer outDebt service-$ 6,570$ Capital projects6,570 - Total 6,570$ 6,570$ 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, transfers from the debt service fund to the capital projects fund were made in accordance with the Bond Indentures. NOTE 6 – CAPITAL ASSETS Capital asset activity for the fiscal year ended September 30, 2023 was as follows: AdditionsReductionsGovernmental activitiesCapital assets, not being depreciatedInfrastructure under construction22,337,017$ 209,256$ -$ 22,546,273$ Total capital assets, not being depreciated22,337,017 209,256 - 22,546,273 Governmental activities capital assets, net22,337,017$ 209,256$ -$ 22,546,273$ Beginning Balance Ending Balance The District encompasses approximately 414 acres. The Development plan for the proposed lands within the District includes approximately 900 single family residential units to be constructed in approximately seven phases. In addition to the single family residential units, the project plans to include parks and a central amenity center in the form of a clubhouse. The estimated cost of the project is $90.9 million. Developer contributions to the capital projects fund for the current fiscal year were $412,893. NOTE 7 - LONG TERM LIABILITIES Series 2018 In October 2018, the District issued $11,405,000 of Special Assessment Bonds, consisting of $2,225,000 of Series 2018 A-1 Bonds, $5,480,000 of Series 2018 A-2 Bonds, $2,735,000 of Series 2018 A-3 Bonds, and $965,000 of Series 2018 A-4 Bonds with interest rates ranging from 5% to 6.25%. The Bonds were issued to finance the acquisition and construction of the 2019 project. Interest is to be paid semiannually on each May 1 and November 1. Principal on the Bonds is to be paid serially commencing May 1, 2020 through May 1, 2049. The Series 2018 Bonds are subject to redemption at the option of the District prior to maturity. The Series 2018 Bonds are subject to extraordinary mandatory redemption prior to maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture. In addition, see Note – 12 Subsequent Events for extraordinary redemption amounts subsequent to fiscal year end. The Bond Indenture established a debt service reserve requirement as well as other restrictions and requirements relating principally to the use of proceeds to pay for the infrastructure improvements and the procedures to be followed by the District on assessments to property owners. The District agrees to levy special assessments in annual amounts adequate to provide payment of debt service and to meet the reserve requirements. The District was in compliance with the requirements at September 30, 2023. NOTE 7 - LONG TERM LIABILITIES (Continued) Long-term Debt Activity Changes in long-term liability activity for the fiscal year ended September 30, 2023 were as follows: AdditionsReductionsGovernmental activitiesBonds payable: Series 2018A-12,185,000$ -$ 80,000$ 2,105,000$ 35,000$ Series 2018A-23,440,000 - 1,105,000 2,335,000 35,000 Series 2018A-32,700,000 - 40,000 2,660,000 40,000 Series 2018A-4920,000 - 15,000 905,000 15,000 Total9,245,000$ -$ 1,240,000$ 8,005,000$ 125,000$ Beginning BalanceEnding BalanceDue Within One Year NOTE 7 - LONG TERM LIABILITIES (Continued) At September 30, 2023, the scheduled debt service requirements on the long-term debt were as follows: PrincipalInterestTotal2024125,000$ 609,756$ 734,756$ 2025140,000 616,946 756,946 2026150,000 618,574 768,574 2027155,000 614,588 769,588 2028170,000 620,296 790,296 2029-2033990,000 3,078,800 4,068,800 2034-20381,365,000 3,111,980 4,476,980 2039-20431,835,000 3,117,382 4,952,382 2044-20482,485,000 3,136,890 5,621,890 2049590,000 625,884 1,215,884 8,005,000$ 16,151,096$ 24,156,096$ Governmental ActivitiesYear ending September 30: NOTE 8 – DEVELOPER TRANSACTIONS AND CONCENTRATION The Developer 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 Developer. 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. NOTE 9 - MANAGEMENT COMPANY The District has contracted with a management company to perform services which include financial and accounting advisory 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 10 - 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 11 - INTERGOVERNMENTAL REVENUE In March 2019, the District entered into an interlocal agreement with the City of Tallahassee and Leon County-City of Tallahassee Blueprint Intergovernmental Agency. This agreement was amended and restated in September 2020. The District has agreed to construct part of segment 3 of Welaunee Boulevard and the accompanying sidewalks and multipurpose trails, along with the turn lane portion of segment 2 (the “Project”). The Agency has included Welaunee Boulevard as part of the Blueprint 2020 Infrastructure project 25, Northeast Gateway: Welaunee Critical Area Plan Regional Infrastructure Phase In accordance with the agreement, the City will reimburse actual construction costs of the Project incurred by the District subject to (a) completion of an entire phase of the Project; (b) acceptance of completed phases of the Project by the City, subject to compliance with all approved plans and specifications and permitting conditions, which acceptance will not be unreasonably withheld by the City; (c) dedication of the completed phase or phases of the Project to the City; and (d) submission and acceptance by the City of the Project documentation. No payment shall be due from the City to the District prior to October 1, 2019. The District shall complete construction of the Project, and all roadway constituting the Project, shall be dedicated and accepted by the City, by or before December 31, 2022. The City and Agency funding for the Project will not exceed $5,813,124. In August 2019, the District entered into a construction funding agreement with the Developer. The Developer agreed to provide the funding to the District necessary to complete the Project as discussed in the interlocal agreement above. The funds provided by the Developer are expected to be reimbursed from the City of Tallahassee through the District up to $7.05 million, within 90 days of final completion of the Project and acceptance by the City, as provided for in the interlocal agreement. Within 45 days of receipt of funds by the District from the City, the District shall reimburse the Developer until full reimbursement is made or until all funds received from the City are exhausted; provided, however, that the Developer recognizes the Project may exceed the amount of the City reimbursed funds and the District shall not be required to reimburse the Developer for any amounts above those reimbursed by the City to the District for the Project. In November 2020, the District entered into an escrow agreement with the Developer, Capital City Bank, and Ausley & McMullen, P.A. (“Escrow Agent”). The parties agreed that the reimbursement funds remitted to the District pursuant to the interlocal agreement should be paid directly to Capital City Bank in order to repay the Developer’s loan from this bank in the amount of $4 million. This loan was obtained by the Developer in order to meet its funding obligations under the construction funding agreement as provided above. The reimbursement funds have been placed in a designated escrow account. During the fiscal year ended September 30, 2022, approximately $3.9 million was reimbursed to the Developer from the City for this Project. In April 2023, the Developer received an additional reimbursement totaling approximately $1.8 million. NOTE 12 – SUBSEQUENT EVENTS Bond Payments Subsequent to fiscal year end, the District prepaid a total of $10,000 of the Series 2018-2 Bonds. The prepayments were considered extraordinary mandatory redemptions as outlined in the Bond Indenture. CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 Original & FinalREVENUESAssessments296,775$ 326,575$ 29,800$ Developer contributions296,100 52,640 52,640 Miscellaneous1,000 175 (825) Total revenues593,875 379,390 81,615 EXPENDITURESCurrent: General government129,713 110,608 19,105 Physical environment189,650 153,242 36,408 Culture and recreation216,100 92,728 123,372 Capital outlay58,412 - - Total expenditures593,875 356,578 178,885 Net change in fund balances-$ 22,812 260,500$ Fund balance - beginning(6,085) Fund balance - ending16,727$ Variance with Final Budget - Positive (Negative) Budgeted AmountsActual Amounts See notes to required supplementary information CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, 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 did not exceed appropriations for the fiscal year ended September 30, 2023. CANOPY COMMUNITY DEVELOPMENT DISTRICT CITY OF TALLAHASSEE, FLORIDA OTHER INFORMATION – DATA ELEMENTS REQUIRED BY FL STATUTE 218.39(3)(C) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 UNAUDITED ElementCommentsNumber of District employees compensated in the last pay period of the District’s fiscal year being reported.0Number of independent contractors compensated to whom nonemployee compensation was paid in the last month of the District’s fiscal year being reported. 13Employee compensation0Independent contractor compensation $ 560,118.69 Construction projects to begin on or after October 1; ($65K)Not applicableBudget variance reportSee the Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General FundAd Valorem taxes;Not applicableNon ad valorem special assessments; Special assessment rateOperations and maintenance - $821Debt service - 2018A-4(AA1) $650 - $850Debt service - 2018A-1(AA2) $450 - $1,000Debt service - 2018A-2(AA2) $0Debt service - 2018A-3 $450 - $1,000Special assessments collected$1,627,541 Outstanding Bonds: Debt Service 2018A-4(AA1) Mat Date: 5/1/2049 $ 905,000.00 Debt Service 2018 A-1(AA2) Mat Date: 5/1/2049 $ 2,105,000.00 Debt Service 2018A-2(AA2) Mat Date: 5/1/2049 $ 2,335,000.00 Debt Service 2018A-3 Mat Date: 5/1/2049 $ 2,660,000.00 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 Canopy Community Development District City of Tallahassee, 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 Canopy Community Development District, City of Tallahassee, Florida (“District”) as of and for the fiscal year ended September 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our opinion thereon dated June 17, 2024. Report on 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 or significant deficiencies may exist that were not identified. Report on 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. 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. June 17, 2024 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 Canopy Community Development District City of Tallahassee, Florida We have examined Canopy Community Development District, City of Tallahassee, 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, 2023. Management is responsible for District’s compliance with those requirements. Our responsibility is to express an opinion on 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. We are required to be independent and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to the examination engagement. We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the examination engagement. In our opinion, the District complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2023. 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 Canopy Community Development District, City of Tallahassee, Florida and is not intended to be and should not be used by anyone other than these specified parties. June 17, 2024 MANAGEMENT LETTER PURSUANT TO THE RULES OF THE AUDITOR GENERAL FOR THE STATE OF FLORIDA To the Board of Supervisors Canopy Community Development District City of Tallahassee, Florida Report on the Financial Statements We have audited the accompanying basic financial statements of Canopy Community Development District, City of Tallahassee, Florida ("District") as of and for the fiscal year ended September 30, 2023, and have issued our report thereon dated June 17, 2024. 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 June 17, 2024, 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: I. Current year findings and recommendations. II. Status of prior year findings and recommendations. III. 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 Canopy Community Development District, City of Tallahassee, Florida and is not intended to be and should not be used by anyone other than these specified parties We wish to thank Canopy Community Development District, City of Tallahassee, 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. June 17, 2024 REPORT TO MANAGEMENT I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS None II. PRIOR YEAR FINDINGS AND RECOMMENDATIONS IC 2022-001: Financial Statement Close Current Status: Recommendation has been implemented. III. 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: 1. 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, 2022. 2. 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, 2023. 3. 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, 2023. 4. The name or official title and legal authority of the District are disclosed in the notes to the financial statements. 5. The District has not met one or more of the financial emergency conditions described in Section 218.503(1), Florida Statutes. 6. We applied financial condition assessment procedures and no deteriorating financial conditions were noted as of September 30, 2023. 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. 7. Management has provided the specific information required by Section 218.39(3)(c) in the Other Information section of the financial statements on page 24.