HANDOUT 1 CFO MEMO NO. 02 ( ) October 3, 2012 CHIEF FINANCIAL OFFICER MEMORANDUM NO. 02 ( )

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1 HANDOUT 1 CFO MEMO NO. 02 ( ) October 3, 2012 CHIEF FINANCIAL OFFICER MEMORANDUM NO. 02 ( ) SUBJECT: CONTRACT AND GRANT REVIEWS AND RELATED PAYMENT PROCESSING REQUIREMENTS This memorandum supersedes the following Chief Financial Officer Memoranda: No. 01 ( ), No. 03 ( ), No. 05 ( ), and No. 06 ( ). CONTRACT DOCUMENT REQUIREMENTS Section , Florida Statutes (F.S.), was amended in 2010, establishing new provisions related to scope of work and deliverables in order to improve accountability for contractual service agreements entered into by state agencies. Contractual service agreements executed on or after July 1, 2010, must be in compliance with the requirements of Section , F.S. These contractual service agreements must include: A scope of work that clearly establishes all of the specific tasks the contractor is required to perform. Documentation required to be maintained by the contractor to evidence the completion of the tasks. Specific deliverables that must be provided and accepted prior to payment. Deliverables must be quantifiable, measurable and verifiable. Each deliverable must be directly related to a task specified in the scope of work and must identify the minimum level of service to be performed. Agencies should not confuse reports with deliverables. Reports usually are not deliverables. Rather, a report is the means to attest to the tasks performed during a given period of time. Specified criteria that will be used to determine the contractor s successful performance. Financial consequences that the agency must apply if the contractor fails to perform in accordance with contract. A state agency must apply financial consequences if the contractor fails to meet the minimum level of service identified in the agreement or other contract terms. CONTRACT AND GRANT REVIEWS Contractual service (including purchase orders) and grant agreements will be submitted to the Bureau of Auditing (Bureau) for review. For contracts that are effective July 1, 2012 or later, required documentation must be submitted no later than when the next payment request is submitted to the Bureau. For contracts executed after the date of this memorandum, documentation must be submitted upon execution of the agreement. Agencies must submit documentation including the contractual service agreement, purchase order, grant agreement, along with any required special approvals (Attorney General, advance payment, etc.), and procurement documentation (bid tabulation, proposal evaluation, price/cost analysis, etc.). 1

2 HANDOUT 1 CFO MEMO NO. 02 ( ) Agencies will submit documentation related to contractual service agreements, grant agreements, and purchase orders, if the value of the agreement is, or has been amended to, $750,000 or more. Agencies will submit documentation related to contractual service agreements and purchase orders, that are based upon state term contracts, if the value of the agreement is $500,000 or more. The Bureau may also review, on a sample basis, agreements below these thresholds. The Bureau has determined that the types of agreements listed below are exempt from this requirement: Building Construction Architect/Engineers Legal Services (including Court Reporting) Courier Services Service Level Agreements between agencies and the Shared Resource Centers Agencies may make a written request for additional exemptions. The Bureau will focus its review on the agreement s scope of work, deliverables, compliance with the state term contract (if applicable) and the payment terms, as well as the compliance requirements for state and federal financial assistance, as established by Chief Financial Officer Memorandum No. 4 ( ). The Bureau will complete the review and provide its conclusions to the submitting agency. Payments may be delayed on agreements that do not meet statutory requirements (scope of work, deliverables, financial consequences, etc.). AGREEMENTS FUNDED BY STATE AND/OR FEDERAL FINANCIAL ASSISTANCE Section , F.S., requires agreements that are funded by state and/or federal financial assistance include provisions related to scope of work and deliverables. Agreements executed on or after July 1, 2010, are required to include: A scope of work that clearly establishes all of the specific tasks the recipient/subrecipient is required to perform Documentation required to be maintained by the recipient/subrecipient to evidence the completion of the tasks Specific deliverables that must be provided and accepted prior to payment. Deliverables must be quantifiable, measurable and verifiable. Each deliverable must be directly related to a task specified in the scope of work and must identify the minimum level of service to be performed. Agencies should not confuse reports with deliverables. Reports usually are not deliverables. Rather, a report is the means to attest to the tasks performed during a given period of time. Specified criteria that will be used to determine the recipient/subrecipient s successful performance. The requirements of Chief Financial Officer Memorandum No. 4 ( ), relating to these agreements, continue to be in effect. 2

3 HANDOUT 1 CFO MEMO NO. 02 ( ) COST ANALYSIS REQUIRED BY SECTION FLORIDA STATUTES Section , F.S., requires agencies to maintain records to support a cost analysis for service agreements, executed on or after July 1, 2010, which were awarded on a noncompetitive basis. Detailed budgets are required to be submitted by the person or entity awarded funding in excess of Category II and must be reviewed by the agency. The attached Cost Analysis form and instructions are to be used to document an agency s review of the detailed budget. If an agency already has an existing form which it desires to use, the form must be submitted to the Bureau for review and approval. The completed cost analysis is to be maintained in the contract manager s contract file. The cost analysis form is required to be submitted to the Bureau when submitting agreements with a value of $750,000 or more. Contact the Bureau of Auditing at (850) for questions regarding this memorandum. 3

4 HANDOUT 1 CFO MEMO NO. 02 ( ) COST ANALYSIS FOR NON-COMPETITIVELY PROCURED AGREEMENTS IN EXCESS OF CATEGORY II Line Item Budget Category Salaries Fringe Benefits Equipment Utilities Travel Miscellaneous Amount % Allocated to this Agreement Allowable Reasonable Necessary Indirect cost/overhead TOTAL CERTIFICATION: I certify that the cost for each line item budget category has been evaluated and determined to be allowable, reasonable, and necessary as required by Section , F.S. Documentation is on file evidencing the methodology used and the conclusions reached. Name Signature Title Date 4

5 HANDOUT 1 CFO MEMO NO. 02 ( ) COST ANALYSIS INSTRUCTIONS FOR NON-COMPETIVELY PROCURED AGREEEMENTS IN EXCESS OF CATEGORY II 1. Agencies must complete a cost analysis worksheet for the original contract and any amendment that affects the amount of compensation and/or the level of services provided. 2. Each separate line item must be evaluated to determine whether the cost is allowable, reasonable and necessary. Each miscellaneous cost must be specifically identified. 3. To be allocated to a program, a cost must be related to the services provided. If the cost benefits more than one program, a determination must be made that the cost is distributed in a reasonable and consistent manner across all benefiting programs. 4. To be allowable, a cost must be allowable pursuant to state and federal expenditure laws, rules and regulations and authorized by the agreement between the state and the provider. 5. To be reasonable, a cost must be evaluated to determine that the amount does not exceed what a prudent person would incur given the specific circumstances. 6. To be necessary, a cost must be essential to the successful completion of the program. 7. Indirect costs/overhead should be evaluated to determine that the rate is reasonable. 8. Agencies must retain documentation in agency files to support the conclusions reached as shown on the Cost Analysis for Non-Competitively Procured Agreements in Excess of Category II form. 5

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7 HANDOUT 2 PROVIDER ON-BOARDING CHECKLIST Use this checklist to conduct the provider on-boarding meeting. Section/Items On-Boarding Preparation Establish date/time/location of meeting Prepare agenda Notify all participants On-Boarding Meeting Topics Scope of the contract. Contract terms and conditions, particularly any special contract provisions. Technical and reporting requirements of the contract. Applicable contract administration procedures, including contract monitoring and progress measurement. The rights and obligations of both parties and the provider performance evaluation procedures. Potential contract/grant problem areas and their possible solutions. Invoicing requirements and payment procedures. Liquidated damages (if any) and performance bonds (if any) including conditions for enforcement. Explain limits of state agency personnel authority and obtain the same information regarding provider personnel. Post On-Boarding Prepare and distribute summary of meeting, including: areas requiring resolution a list of participants a list of action items, including individual(s) responsible and due date 7

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9 HANDOUT 3 CFO MEMO NO. 01 ( ) July 26, 2012 CHIEF FINANCIAL OFFICER MEMORANDUM NO. 01 ( ) SUBJECT: CONTRACT SUMMARY FORM This memorandum supersedes Chief Financial Officer Memoranda No. 02 ( ) and No. 7 ( ). The purpose of this memorandum is to clarify how and when the Contract Summary Form is to be used. FLAIR PAYMENTS For all contract and grant agreements that are recorded in the Florida Accountability Contract Tracking System (FACTS) and for which payments are processed in FLAIR, each agency will utilize the Contract Summary Form that is found in FACTS. Agency contract managers should print, complete, and sign the FACTS Contract Summary Form, certifying that services were satisfactorily received. The signed Contract Summary Form will be sent to the Agency s accounting office and included in the FLAIR payment voucher. The Bureau of Auditing (Bureau) will return, to the Agency, any FLAIR payment voucher that does not include a completed and signed FACTS Contract Summary Form. Federal and state grant agreements are not currently required to be recorded in FACTS; however payments for grant agreements processed in FLAIR will also need to be supported by a properly completed and signed Contract Summary Form, which can be found on the DFS website at MFMP PAYMENTS For all contracts that are recorded in FACTS, but for which payments are processed through MFMP, agencies must print the FACTS Contract Summary Form and attach it to the Purchase Requisition (PR) or Contract Request (CR). The Contract Manager will provide the following certification statement in the comment section field on the PR or the CR: I <insert name> certify by evidence of the attached Contract Summary Form, that I am the Contract Manager and the information on this form is true and correct. For every change to a FACTS agreement, an updated FACTS Contract Summary Form must be attached along with the required contract manager certification statement. For all MFMP service payments, the Contract Manager must provide on the Invoice Reconciliation (IR) the following certification statement: I <insert name> certify that I am the Contract Manager and the provided information is true and correct; the goods and services have been satisfactorily received and payment is now due. I understand that the office of the State Chief Financial Officer reserves the right to require additional documentation and/or to conduct periodic post-audits of any agreements. In lieu of the contract manager providing the certification statement on the IR, the FACTS Contract Summary Form or the Contract Summary Form, as applicable, may be completed, signed and attached. The Contract Summary Form may be found at 9

10 The Bureau has previously determined that the agreements for certain service types listed below are exempted from the Contract Summary Form requirements. However, an acknowledgement of satisfactory receipt and approval of services or a receiving report, as applicable, must be provided. Utility payments Property and Equipment Leases Phone Services Building Construction Commodity purchases HANDOUT 3 CFO MEMO NO. 01 ( ) The requirements of this memorandum are effective for contractual service and grant payments submitted by agencies on or after August 1, Please contact Laura Anderson at , Laura.Anderson@myfloridacfo.com or Cheri Greene at , Cheri.Greene@myfloridacfo.com if you have questions regarding this memorandum. 10

11 HANDOUT 3 CFO MEMO NO. 01 ( ) SUMMARY OF CONTRACTUAL SERVICES AGREEMENT/PURCHASE ORDER OLO/Department: Agency Contact: FLAIR Contract #: Telephone #: Agency Contract #: PO #: Contractor/Vendor/ Payee: Original Contract Amount: Total Contract Amount: Contract Type: Contract Start Date: Contract Last Signed Date: Advance Funded YES NO Contract End Date: METHOD OF PROCUREMENT: AGENCY REFERENCE #: Invoice Number: Invoice Period: Total Amount of Previous Payments: CONTRACT MANAGER CERTIFICATION: I certify, by evidence of my signature below, the information on this form is true and correct; the goods and services have been satisfactorily received and payment is now due. I understand that the office of the State Chief Financial Officer reserves the right to require additional documentation and/or to conduct periodic post-audits of any agreements. Contract Manager Name printed: Contract Manager Signature: Date: Amendments/Renewals/Extensions CHANGE TYPE: Contract Last Signed Date: Amendment Amount: CHANGE DESCRIPTION: Agency Amendment Reference: New Ending Date: CHANGE TYPE: Contract Last Signed Date: Amendment Amount: CHANGE DESCRIPTION: Agency Amendment Reference: New Ending Date: CHANGE TYPE: Contract Last Signed Date: Amendment Amount: CHANGE DESCRIPTION: Agency Amendment Reference: New Ending Date: 11

12 HANDOUT 3 CFO MEMO NO. 01 ( ) OLO/Department: FLAIR Contract #: Agency Contract #: PO #: Deliverables Deliverables as stated in the Contract Minimum Performance Levels Payment Amount Type of Services Method of Payment 12

13 HANDOUT 3 CFO MEMO NO. 01 ( ) Instructions to complete the Summary of Contractual Services Agreement/Purchase Order Form: This form should be completed in its entirety, signed and dated by the appropriate agency personnel and submitted with each payment request. Please ensure each field on the form is completed according to the guidance provided. OLO/Department: Agency Contact: Telephone #: FLAIR Contract #: Agency Contract #: PO #: Contractor/Vendor/Payee: Original Contract Amount: Total Contract Amount: Agency s numeric identifier (i.e /Department of Health). Agency designated personnel to answer questions regarding payment. Designated personnel phone number. Identify FLAIR ID number assigned to agreement. Identify the agency number assigned to the agreement. Identify the agency number assigned to the purchase order. Identify Vendor/Payee (including d/b/a if applicable). Provide the original contract amount when executed. Provide the contract amount; amount must equal the total amount of the contract; including amendments/renewals/extension. Contract Type: Contract Start Date: Contract End Date: Contract Last Signed Date: Advance Funded: Method of Procurement: Agency Reference #: Invoice Number: Invoice Period: Provide the FACTS contract type. Manuals/10FACTSUserGuide-January dj.pdf Identify date contract begins. Identify date contract ends. Identify date of execution. Identify if the payment for which certification is provided is an advance payment. Identify the appropriate competitive or non-competitive method of procurement. Identify specific ITB, RFP or ITN number. If first payment is being submitted on a competitively procured agreement, provide documentation evidencing procurement (e.g. bid tab). If the procurement was non-competitive provide the specific exemption, statute, CSFA, CFDA or GAA line item. Identify the invoice number associated with this payment request. Identify the invoice period this payment request covers. Total Amount of Previous Payments: Provide the cumulative total of the payments to date, excluding current invoice amount(s). 13

14 HANDOUT 3 CFO MEMO NO. 01 ( ) Contract Manager Certification: Contract Manager Name printed: Contract Manager Signature: Date: This section is to be completed by the employee designated by the agency to function as the contract manager to certify the information provided on this form is true and accurately reflects the terms and conditions in the executed contract document and approve the identified invoice for payment based on direct knowledge of satisfactory receipt of the goods or services. If the individual completing this section is not the designated contract manager, please provide justification or delegation of authority for the individual to sign this form. Print name of the appropriate agency personnel. Signature of the appropriate agency personnel. Enter the date signed by appropriate agency personnel. AMENDMENTS/RENEWAL/EXTENSIONS: Change Type: Change Description: Contract Last Signed Date: Agency Amendment Reference: Amendment Amount: New Ending Date: Identify the type of change-amendment, renewal or extension. Brief statement describing the changes that have occurred. Identify date of execution. Identify the agency amendment, renewal or extension number, as applicable. Provide the amendment, renewal or extension amount, as applicable. Provide the new ending date, if applicable. If the end date changed the contract end date on page 1 should be updated to reflect the new date. DELIVERABLES: Deliverables as stated in the contract: Minimum Performance Levels: Payment Amount: Type of Services: Method of Payment: Identify the deliverables as stated in the contract. Identify the minimum levels of service to be completed as stated in the contract. Identify the compensation amount for each deliverable. Provide a brief description of the services being provided. Identify the payment method for each deliverable. For example, fixed-price, fixed-rate, cost reimbursement. 14

15 HANDOUT 4 DELIVERABLE TRACKER Use this table to track receipt of deliverables. The contract manager should prepare this schedule as soon as the contract is assigned to him/her and keep it in the contract file. As deliverables are received and approved, this schedule should be updated. Deliverable Performance Standard Date Due Date Received Date Accepted Payment Amount 15

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17 HANDOUT 5 DELIVERABLE ACCEPTANCE FORM Use this memo to document written certification of acceptance of deliverables. Each time this memo is used to document receipt of a deliverable, it should be kept as part of the contract file. Project Identification Contract/Grant Number: Contract/Grant Title: Deliverable Provider Name: Date Received: Deliverable Name: Deliverable Description: This memo acknowledges receipt and acceptance of the deliverable listed above. In the opinion of the contract manager, this deliverable meets the performance standards and terms and conditions as stated in the contract/grant. Contract Manager: [Type Name] Date: 17

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19 HANDOUT 6 SAMPLE INVOICE Attachment A: Scope of Work L. Payment Structure 1. Payment on this contract is based on the structure established by OMS IT State Term Contract # , Project Area #4, Staff Augmentation for Job No. 1620, Quality Assurance Analyst, Expert Level and Attachment K to this contract. 2. The Consultant(s) shall only be paid based on actual hours worked, not to exceed 40 hours per week without prior written approval from the SSP Process Manager and/or CSE Contract Manager 3. Daily work hours shall be arranged with the SSP Process Manager or designated team lead. 4. The holiday schedule shall follow the approved State Holiday schedule. 5. Authorization to work overtime, weekends, and/or holidays, must be obtained in advance and in writing (i.e., through or other correspondence) from the SSP Process Manager or designated SSP team lead. 6. It is expected that the Consultant(s) will work approximately 2080 hours per year. Authorization to work more than this number in each year must be obtained in advance and in writing from the SSP Process Manager and the CSE Contract Manager and will result in the need for an amendment to the contract. 7. Consultants authorized to work overtime, weekends, and/or holidays, shall be paid the same contract hourly rate provided for the normal 40-hour work week. No additional rate shall be authorized for overtime, weekends, holidays, or hours worked exceeding an 8 hour work day or 40 hour work week. 8. Consultants shall complete a Department provided monthly timesheet and shall obtain signature on the timesheet from either the SSP Process Manager or a designated SSP team lead. The Consultant(s) will sign and submit the monthly timesheet to the Provider. 9. Provider shall submit an invoice to the CSE Contract Manager by the 10th calendar day of each month for the time worked during the previous month. The consultant(s)' signed timesheet must be attached to the invoice. Failure to include the timesheet(s) will result in either rejection of the invoice or a delay in processing while the required documentation is obtained. 10. The invoice must be on company letterhead and at a minimum, include the following information: a. Date of invoice b. CSE Contract Manager's name and address (see section III.G.4. of the contract) c. Contract name (FLORIDA/CAMS Technical Assistance-SSP) d. CSE contract number (C3CAP) e. Service period (such as April1-April 30, 2010) f. The name of the consultant(s), their number of hours worked, total contracted hours remaining, hourly rate, payment amount, amount paid to date g. Total payment amount requested h. Authorized signature of Provider i. Date of signature j. Provider s address and complete payment information including the name, phone number and address of a person to contact for questions regarding the invoice. 11. Written approval of any overtime, holiday, or weekend work claimed must be attached to the invoice. Failure to provide the written approval will result in either rejection of the invoice or a delay in processing while the required documentation is obtained. 12. The State of Florida encourages all providers to use Electronic Funds Transfer (EFT) for increased efficiency and effectiveness in prompt payment. An EFT application may be obtained from the CSE Contract Manager or from the Florida Department of Financial Services 19

20 HANDOUT 6 SAMPLE INVOICE ( vendor.pdf.) If EFT is used, please include the EFT information on the invoice. 13. The Department prefers electronic submission of invoices, supporting documentation and communications using the addresses provided in Section I.C.3. of the contract. 14. The final invoice must be submitted within thirty (30) calendar days of contract end, without good cause. Failure to do so may result in the forfeiture of any payment due. 20

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29 HANDOUT 7 APPLYING FINANCIAL CONSEQUENCES Scenario As contract manager, you have received the June 2013 Service Level Expectations Details Report for contract number DMS 11/ For this activity, perform the following tasks. 1. Review the vendor s performance report to ensure compliance with performance expectations. 2. Identify any performance issues and determine the applicability of financial consequences based on the June 2013 Service Level Expectations Details Report. 3. If needed: a. calculate any financial consequences b. draft a correspondence to the vendor relaying any performance issues. 4. This vendor is paid $879,000 each month. 29

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35 HANDOUT 8 CONTRACT CLOSEOUT CHECKLIST Use this checklist to complete the closeout activities for all contracts/grants. Once completed, place this checklist in the contract/grant file to document that closeout activities were performed. Closeout Action Programmatic Closeout All deliverables and services have been delivered and accepted in writing. All reports (including Financial Status Report) have been received and accepted in writing. Performance standards have been met. All contract terms and conditions have been met. Any instances of non-performance have been documented and all appropriate remedies for noncompliance have been applied. The contract file is complete, clearly organized, and labeled for storage and retention purposes. Fiscal Closeout Invoices have been properly documented and paid. Advances and/or interest earned on advances have been recovered or applied against what is owed. If applicable, financial consequences have been assessed and collected for nonperformance/noncompliance. Disallowed costs and/or unused grant funds have been recovered. Final payment to provider has been made only after all programmatic and fiscal steps have been completed. Acquired non-expendable property (having a unit value in excess of $1,000 and a useful life of greater than one year) has been returned to the state. Match requirements have been met (if required). Financial Status Report has been reviewed and approved in writing. Cost audit has been performed. 35

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