President's Report September 30

Page 4

LETTER FROM ERIC WOLF, AUDIT COMMITTEE CHAIR

TO JONATHAN NELSON, TREASURER

As you will recall, at our Audit Committee meeting in August, we had detailed discussions with the team from RSM regarding the audit of the financial Statements for the year ended April 30, 2020. In addi- tion to this discussion, we asked RSM to provide us with a document summarizing their findings regarding the audit. Attached is the document they have given us. Pursuant to your request, I am happy to provide my comments regarding their findings, as well as comments regarding the work of RSM (and in addition, the Auditors for the Qualified Retirement Plan), and our internal Accounting Department. As to the RSM document, I would state that their findings are uniformly positive. The audit resulted in a clean, unmodified audit opinion. Their analysis of key financial statement metrics show the Club to perform better than similarly situated Clubs in Florida. Their work found no uncorrected misstatements, no disagreements with management, no unusual transactions, no difficulties in performing the audit, no man- agement letter comments noting internal issues, and no significant deficiencies or material weaknesses in internal control. Their findings regarding their analysis of various areas of "Audit Risk" report no noted issues in the evaluation of Cash, Accounts Receivable, Fixed Assets, Inventory, Accounts Payable and Expenses, Debt & Capital Leases, Revenue, Payroll, Dues and Fees collected in advance, Deferred Compensation, Equity, Legal, and Management Override of Controls. In my experience serving on Audit Committees, both with the Club and other entities, I believe this report is exemplary, and our in-person (via Zoom) discussions with the Auditors certainly re-enforced my view. At the start of the audit process, I think the Audit Committee had some concerns as to how things would go this year. While Covid-19 required all of us to adapt to a more "virtual" audit experience, we were pleased that this was very much a non-issue for the auditors and our finance group. Because we have relatively advanced internal financial systems, the auditors had access to all documentation and records remotely. This has been in place for several years, and both the Auditors and our staff found it to be a seamless process. We also were alert to risks that may have arisen due to staffing changes, both with the Auditors and our staff. The RSM partner who had handled our Audit for many years retired, and one of their experi- enced staff who had previously worked on our audit left RSM. In addition, our Controller left the Club just as the Audit was starting, and a new Controller was hired from outside. In my view, these matters turned out to be non-events. The RSM partner who took over is not only a very experienced partner, but also RSM's National Director of their Club and Hospitality practice. The ex- perienced staff member was replaced by two much more senior professionals from that same group. Our new Controller also performed at a high level. Each of them expressed to the Audit Commit- tee that there were no issues in the transition, and they believe they worked together very well. We had a similar experience this year with the audit of the Club's retirement plan. The auditors ex- pressed that everything thing went well, they noted no difficulties or deficiencies, and that our approach of utilizing our Third Party Administrator, Investment Advisors, and Fiduciary to work with our management team compared most favorably with other clients. I have heard from each member of the Audit Committee that they are pleased with the work done by our financial department and external auditors. Please let me know if you have any questions or comments.

Best regards, Eric Wolf