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12/13/2018
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Advancing AccountabilityBEST PRACTICES IN CONTRACT AND GRANT MANAGEMENT
FLORIDA DEPARTMENT OF FINANCIAL SERVICES
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What to ExpectEnd by 4:30pm
Assessment (25 questions)
Evaluations
Class breaks
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Overview
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Objectives▪ Identify powers and responsibilities of the CFO
▪ Identify the mission of the Bureau of Auditing
▪ Identify audits the Bureau of Auditing performs
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Scope of CFO Authority➢ Settle all claims against the state
➢ Examine disbursements made out of the state treasury
§ 17.03 F.S.
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Scope of CFO Authority
§ 17.03 & 215.42 F.S. Comptrollers Memo #8 (2001-2002)
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Shared Responsibility
CFO
Division of Accounting
and Auditing
Bureau of Auditing
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BOA MissionProvide reasonable assurance to the taxpayers of Florida that funds disbursed from the state treasury are valid obligations of the State and are in general compliance with state statutes and rules.
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Bureau Functions
Bureau of Auditing
Payment Processing
Management Review
TrainingOther Post
Audits
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Type of Audits
Pre-Audits
Expanded Audits of Payment
Contract Reviews
Contract Management
Reviews
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Applicability of Information➢ Information applies to ▪ all agreement types
▪ all disbursements from the state treasury regardless of funding source
➢ The more restrictive guidance generally applies when discrepancies exist.
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Definitions
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Authorizing Documents
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State Financial AssistanceState resources, not including federal financial assistance and state matching on federal programs, provided to a non-state entity to carry out a state project.
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§ 215.97 F.S.
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Each Grant is Unique
Go to funding source for specific information
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§ 215.971 F.S.
Inclusive Term
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Agreement
Contracts
Grants
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Vendor or Recipient
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You May Have a Recipient IfProvider ◦ is making programmatic decisions◦ is receiving federal or state financial assistance◦ has a match requirement
See instructors about signing up for Florida Single Audit Act training
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Inclusive Term
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ProviderVendor
Recipient
Agreement Manager Duties
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Objectives▪ Identify legally required duties of contract and grant managers
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Agreement Manager Duties
§ 287.057 & 215.971 F.S.
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CFO memo #6 2011-12
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Additional Grant Manager Duties
Verify all funds received against funds expended
Recuperate unexpended/unobligated funds
Recover un-allowed expenditures
Produce final reconciliation report
§ 215.971 F.S.
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Training Requirements
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Planning
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Objectives▪Name the five steps of planning
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Planning- Considerations
✓ Business need/public purpose
✓ Agency/program authority
✓ Budget
✓ Time available for procurement
✓ Projected value of needed services
✓ Type of procurement needed
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Planning- 5 Steps
1. Define goals and objectives
2. Review prior information
3. Specify tasks
4. Identify funding source
5. Determine payment method
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1. Define Goals & ObjectivesConsider◦ Agency mission
◦ Program goals
◦ Current and long term needs
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2. Review Prior InformationSources◦ Similar contract for similar services◦ Another agency’s contract for similar services◦ Prior contracts with same vendor
Information to review◦ Quality of services received◦ Provider performance◦ Cost of services◦ Schedule of milestones
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3. Specify TasksIdentify the specific tasks to be achieved◦ Posted on solicitations
◦ Foundation of developing scope of work and
performance standards for the contract
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4. Identify Funding SourceQuestions to answer◦ Is there an appropriation for the purchase?
◦ What restrictions are tied to the use of the
funds?
◦ Are the funds state financial assistance?◦ What are allowable and unallowable activities?
◦ Will the provider be considered a vendor or recipient?
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Florida GAA365 SPECIAL CATEGORIES
GRANTS AND AIDS - CONTRACTED SERVICES
FROM GENERAL REVENUE FUND . . . . . 1,176,801
FROM FEDERAL GRANTS TRUST FUND . . . . . 11,708,995
FROM WELFARE TRANSITION TRUST FUND . . . . . 166,494
From the funds in Specific Appropriation 365, the nonrecurring sum of$100,000 from the General Revenue Fund is provided to the Comprehensive Emergency Services Center in Tallahassee for direct and preventative services to the homeless, or to those at-risk of becoming homeless.
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5. Determine Payment Methods
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Fixed Price
Single amount paid upon
completion of specified tasks
Fixed Rate
Cost per unit of commodity or
service
Cost Reimbursement
Reimburse for undetermined
final cost*Not-to-exceed limit
applies
A combination of multiple payment methods can be used when appropriate
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Procurement
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Objectives▪ Identify the types of purchases
▪ Describe the three methods of competitive procurement
▪ Define the difference between competitive and non-competitive awards
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Type of Purchases
Emergency
Exceptional
Competitive
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§ 287.057 F.S.
Competitive Procurements
Invi
tati
on
to
Bid
(IT
B)
Req
ues
t fo
r P
rop
osa
l (R
FP)
Invi
tati
on
to
Neg
oti
ate
(ITN
)
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§ 287.057 F.S.
Price & Quality
Price Best Value
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Noncompetitive AwardsSole source
Line item appropriation
Exempt services*
Grants not awarded via section 287.057, F.S.
ITB, RFP, ITN with only one responsive vendor
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*§ 287.057 F.S.
Cost Analysis
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Objectives▪ Recognize when to perform a cost analysis
▪ Identify the criteria for conducting a cost analysis
▪ Discuss the factors to consider when performing a cost analysis
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Cost Analysis
Review detailed budget
Make determinationsAllowableReasonableNecessaryAllocable
Maintain record of decisions and supporting documentation
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§ 216.3475, F.S.
CFO Memo #2 2012-13
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Cost Analysis
Performed before contract execution
Performed by the state agency
Completed on approved form
Supporting documentation, signed and filed
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Cost Analysis Triggers
LEGALLY REQUIRED
Non-competitive awarding of funds◦ Sole source◦ Exempt◦ Line item appropriations◦ Single response to a
competitive procurement
§ 216.3475, F.S.
BEST PRACTICE
Competitively procured agreements that◦ are with recipients
◦ reimburse costs
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CFO Memo #3 14-15
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Cost Analysis Factors
Allowable Necessary
Reasonable Allocation
Evaluation Criteria
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Cost Analysis Factors
Allowable Necessary
Reasonable Allocation
Evaluation Criteria
Authorized by state orfederal laws and rules
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Expressed or Implied Statutory AuthorityAttorney General Opinion 78-101
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Legal Authority
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State Level• Florida Statutes
• Florida Administrative Code
• Reference Guide for State Expenditures
• Catalog of State Financial Assistance
Federal Level• Catalog of Federal
Domestic Assistance
• 2 CFR part 200
Cost Analysis factors
Allowable Necessary
Reasonable Allocation
Evaluation Criteria
Required for program success
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Cost Analysis Factors
Allowable Necessary
Reasonable Allocation
Evaluation Criteria
What a prudent business would pay
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Cost Analysis Factors
Allowable Necessary
Reasonable Allocation
Evaluation Criteria
Obligation is proportionate to benefit
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Supporting Documentation ExamplesW2 forms
Payroll forms
Leasing agreements
Cost allocation plan
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Cost Analysis Activity
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Scenario
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Cost Analysis Triggers
LEGALLY REQUIRED
Non-competitive awarding of funds◦ Sole source◦ Exempt◦ Line item appropriations◦ Single response to a
competitive procurement
§ 216.3475, F.S.
BEST PRACTICE
Competitively procured agreements that◦ are with recipients
◦ reimburse costs
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CFO Memo #2 2012-13
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Transparency Initiative
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Objectives
▪ Identify legal requirements for using the FACTS system
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Purpose
Fulfills legislative mandateTrack state contracts/grantsPublic access
§ 215.985(14) F.S.
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ScopeEach state agency*All AgreementsOriginal and amendments
AA Memo No.26 ‘13-14*Unless exempted § 215.985(14)(i), F.S.
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Requirements
30 days to uploadMost up-to-date and accurate informationRedact confidential or exempt information
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Tour of Transparency Florida
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Agreements
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Objectives▪ Identify required elements in a contract and/or grant
▪ Identify requirements of contract amendments
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Agreement Purpose➢ Establish relationship
➢ Legal basis
➢ Set performance expectation
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Required Elements
Scope of Work
• All tasks and services to be completed by the provider
Deliverables
• Quantifiable, verifiable & measurable units of work completion required to trigger payment
Financial Consequences
• A reduction of payment for nonperformance or noncompliance
§ 287.058 & 215.971, F.S.
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Other Legal RequirementsCONTRACTS
Sufficient information to audit bills and fees
Travel to be in accordance with 112.061
Unilateral cancellation for refusal to allow public access to records
A specified final date for completion of services
Renewal language-3 years or original agreement term
The addressing of property rights
Any obligation to pay is contingent upon appropriation
§ 287.058, F.S.
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Other Legal RequirementsGRANTS
Any balance of unobligated funds must be refunded to the state
Any funds paid in excess of amount entitled to recipient must be refunded
Inclusion of standard audit language
§ 215.971, F.S.
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Changes to Agreement
Contract Amendment
Change Deliverables
Funding Changes
Service Location Change
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Changes to Agreement➢ No retroactive changes
➢ All parties must approve in writing/signatures
➢ Cannot change the scope of work
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Changes to Agreement• Longer of 3 years or original term
• Prohibited on single source and emergency
Renewals
• Up to 6 months
• Additional only if beyond provider’s control
Extension
• Only with prior agency approvalAssignment
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Compensation Changes
More tasks
More clients
More labor/ materials
Fewer
tasksFewer
clients
Fewer
labor/materials
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Payment Terms➢ Identify the specific information to be included on
each invoice.
➢ Identify the documentation required to accompany each invoice and the format in which it is to be submitted.
➢ Identify timelines for invoice submission and approval and deadline for final payment.
➢ Identify advanced payment guidelines.
Rule 69I-40.002, F.A.C.
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Reporting➢ Establish frequency requirements
➢ Include content requirements in the agreement
➢ Provide a format
➢ Require documentation to support information
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Setting Performance ExpectationTHE BIG THREE
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Objectives▪ Identify the elements of an effective scope of work
▪ Amend a scope of work task with qualitative and quantitative standards
▪ Identify the elements of a good deliverable
▪ Identify difference between a deliverable and documentation
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The Big Three
Financial Consequences
Deliverables
Scope of Work
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Scope of Work Answers…
What
Specific tasks/services
need to be completed
Documentation is required to be
maintained
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Scope of Work
Clear Specific CompleteEffective Language
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Vague ScopeCareer counseling will be provided.
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Scope of Work Answers…• Who is going to provide/receive
services?
• Identifies staffing levels, qualifications, responsibilities, and documentation requirements.
Who
• The manner in which activities will be performed
• Any applicable standards, procedures, laws and rules
How
Qualitative standards
Scope of Work Answers…
• When will services take place?
• Identifies agreement period.
• Identifies due dates. When
• Where will the services be performed?Where
Qualitative standards
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• How many people/clients need to be served?
• How much service is each client to receive?
How much/many?
• How frequently will services be provided?How often?
Quantitative standards are not always applicable
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Quantitative Standards
Documentation Specify documentation to be maintained◦ to evidence work completed
◦ to accompany deliverables
◦ for audits and monitoring
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Your TurnCareer counseling will be provided.
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Qualitative Standards
• Counseling USA, INC. All counselors must be certified (Attachment A) and employed by Counseling USA, INC.
• Eligible high school seniors attending XYZ High School in Leon County, Florida. (Attachment B)
Who
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Qualitative Standards
• One-on-one career counseling (Attachment A)
• Minimum of 45 minutes in length
• 1 session per student per grading period
How
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Qualitative Standards
•2016-17 school year during the school day
When
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Qualitative Standards
•In the guidance office of XYZ High School
Where
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DocumentationRequirement DocumentsCertified Counselors Counselor credentials &
background check
One-on-one 45 minute sessions at school guidance office
Sign in sheet (including date, start/end time, student and counselor names, location)
Career counseling Counselor case notes
Eligible XYZ High School seniors
School enrollment andparent release forms
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Improved Scope of WorkCounseling USA, Inc. will provide career counseling to high school seniors attending XYZ High School in Leon County, Florida. All counselors must be certified (Attachment A) and employed by Counseling USA, Inc.
Each eligible high school senior with prior parental permission (Attachment B) will be provided a one-on-one 45 minute session with a certified counselor each grading period during the school day of the September 2016 to May 2017 school year. Sessions must be held in the XYZ High School guidance office.
Counseling USA, Inc. is required to maintain and produce the following documentation upon request: sign-in sheets of students, parent permission forms; background checks and counselors’ case notes.
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Slippery Scopes
CausesAmbiguous languagePassive languageLack of detail
EffectsInability to enforce complianceIneffective monitoring
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Deliverables➢ Are quantifiable, measurable & verifiable
➢ Trigger payment
➢ Measure performance
➢ Track progress
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Measurable Units of Service
EachBundle
WeeklyMonthlyQuarterly
Yearly
MilestonesPhases
HourlyClient
Tasks Recurring Projects As Needed
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Deliverable Attributes➢ Related to Scope of Work
➢ Identifies
o tasks, services and/or milestones
o performance criteria
o records to be used for verification
o due date for completion
o payment amount
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Submission Requirements
Delivery address
Invoice requirementsRule 69I-40.002, F.A.C.
Submission deadline
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Deliverables vs. Documentation
DELIVERABLE
May be intangible
What we’re paying for
DOCUMENTATION
Tangible
Evidences what we’re paying for
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Detonating Deliverables
Performance requirements that do not coincide with payment period
Quantitative minimums beyond provider’s control
Progress reports as deliverables
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Deliverable Example
Measurable unit Each session
Required tasks A counseling session provided to an eligible XYZ High School senior in accordance with Scope of Work
Performance criteria 45 minute minimumOne-on-one ratioEligible XYZ High School seniorCertified counselorCareer counseling in accordance with Attachment A
Documentation Sign in sheets
Completion due date Last day of grading period
Payment amount $300 each session
Submission requirements Send to agency by 15th of the month following completion.Invoice must meet requirements of 69I-40.002, F.A.C.
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How Much Do We Pay?State
asked forState
received
Task 1
Task 2
Task 3
Task 1
Task 2
Task 3 State pays ?Task 1
Task 2 Task 3
Task 1
Task 2 Task 3
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How Much Do We Pay?State
asked forState
received
Task 1
Task 2
Task 3
Task 1
Task 2
Task 3 State pays $60,000Task 1
Task 2 Task 3
Task 1
Task 2 Task 3
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How Much Do We Pay?State
receivedState paid
$60,000 worth
of tasks$60,000
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How Much Do We Pay?State
asked forState
received
State pays ?
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How Much Do We Pay?State
asked forState
received
State pays?
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How Much Do We Pay?State
asked forState
received
State pays $25,000
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How Much Do We Pay?State
receivedState paid
$25,000 worth
of tasks$25,000
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Financial Consequences
$50
$25
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Financial Consequences➢ Allows state to pay for partially completed services
➢ Applicable for non-performance/compliance
➢ Not a termination clause
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Financial Consequence ExamplePayment will be reduced by $100 for each session less than 45 minutes in length. Payment will be reduced by $200 for each session less than 30 minutes in length. Payment will be reduced by $300 for each session lasting less than 15 minutes in length.
There will be no payment for any session that doesn’t provide the career counseling outlined in Attachment A
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Monitoring
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Objectives▪ Define programmatic and fiscal monitoring
▪ Name monitoring activities
▪ Identify elements of a monitoring plan
▪ Name possible risk assessment factors
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➢ Ensure provider performance
➢ Enforce terms and conditions
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Who’s Responsible?
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Where Can You Monitor?
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Monitoring
Programmatic
Fiscal
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Programmatic Monitoring➢ Compliance with all terms and conditions of the agreement, laws, and rules
➢ Completion of all services identified in the scope of work
➢ Achievement of deliverables
➢ Achievement of program goals
➢ Sufficient documentation of work completion
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Fiscal Monitoring
Proper ◦ accounting of funds
◦ documentation of expenditures
Allowable expenditures and use of funds
Compliance with budget
Compliance with match/cost sharing requirements
Cash management of advanced payment
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Monitoring Activities
Desk and/or Onsite
Provider Reports
File Reviews
Client SurveysAudit
Reports
Invoice Reviews
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Use source documentation for adequate verification
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Monitoring proceduresAgency ◦ may conduct periodic monitoring due to large
volume of agreements
◦ must document their procedure in writing
◦ activities must provide reasonable assurance that deliverables have been met
CFO Memo No.6 2011-12
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Risk AssessmentEvaluate agreements to determine risk
Potential Factors◦ Dollar amount
◦ Complexity of services
◦ Length of contract
◦ Funding source
◦ Provider experience
◦ Past performance
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Risk AssessmentContract #1 Contract #2
$10,000,000.00 $10,000.00
20 years 1 year
Federally funded General revenue
Medical services to seniors Moving furniture for the state
30 years experience 1st year provider
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Monitoring Plan➢ Type of monitoring (programmatic/fiscal)
➢ Monitoring activities
➢ Sampling procedures
➢ Required documentation
➢ How and to whom results will be communicated
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Monitoring Plan
Low Risk Medium Risk High Risk
• Annual desk monitoring
• Review monthly invoice processing with budget quarterly reports, and audit report
• Quarterly desk monitoring
• Selective deliverable review (with documentation to evidence work completed) audit report review
• Annual on-site review
• Selective deliverable review (with documentation to evidence work completed),
• Audit report review • Monthly
expenditures review
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Monitoring Tool➢ Formally documents the monitoring activity.
➢ Identifies the criteria used to assess the provider’s performance and compliance.
➢ Should include requirements that are critical to your project’s success.
➢ Is customized based on the agreement requirements.
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Criteria Criteria Met? Comments
Provider licensed yes / no
Performance bond current and on file yes / no
Annual inventory of equipment complete yes / no
Provider meets minimal educational requirements
yes / no
Background checks of staff complete yes / no
Provider holds general staff meetings bi-weekly
yes / no
Annual CPA audit complete and submitted to Department
yes / no
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DocumentationFor adequate verification review source documentation that is◦ Sufficient
◦ Reliable
◦ Relevant
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Record Results
Record communication with provider
Keep record of emails and all reports
File monitoring tool and supporting documentation
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Other Monitoring ConsiderationsSampling
Reporting results
Corrective action plan
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Contract File
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Contract FileOriginal signed contractRenewalsExtensionsAmendmentsBondsInsurance
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* For example purpose only
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Contract FileBudget authorizationInvoicesInvoice tracking sheetsContract Summary FormCopies of receiptsVerification documents
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* For example purpose only
Contract FileRisk assessmentMonitoring toolSupporting documentationCorrective action plan Provider reports
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* For example purpose only
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Contract File
EmailsLettersMeeting minutesSummary of phone conversations
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* For example purpose only
Payments
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Objectives▪ Identify invoice requirements
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Payment Process
Agency and provider enter into an executed agreement
Provider completes the work required in the deliverable
Provider submits invoice and supporting documentation
Agency receives, inspects and approves. Submits to CFO
DFS performs pre-audits
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Systems
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Payment Requirements➢ Authorizing document in FACTS
➢ Written certification
➢ Supporting documentation
➢ Accurate and complete invoice
➢ Contract Summary Form
➢ Advanced payment approval (if applicable)
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Rule 69I-40.002, F.A.C.
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Invoice Requirement➢ Dates✓ Invoice date
✓ Service dates
➢ Service description
➢ Vendor name and address
➢ Agency name and address
➢ Unit quantity and rate
➢ Total amount
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Rule 69I-40.002, F.A.C.
Payment Verification
➢Review invoices for accuracy and completeness
➢Verify that any required supporting documentation has been submitted
➢Review documentation to gain reasonable assurance that services have been satisfactorily provided
➢Approve invoice after all other steps have been satisfactorily completed
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Compare invoice with agreementVerify
oBilling unit, rate and price align with the agreement
oService description supports contracted activities
oExpenditures are allowable by the agreement
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Review Invoice
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Reason for Return of Payment FY 17-18
➢ Payment not in accordance with Agreement
➢ Other Supporting Documentation/Justification
➢ Agreement/CSF Not Submitted
➢ Invoice Not Submitted
➢ Incorrect Object Code
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Reason for Return of Payment FY 17-18
➢ Unit and or Unit Price not Shown
➢ Incorrect Invoice Amount
➢ Incorrect Voucher Schedule Amount
➢Insufficient Cash/Insufficient Budget release
➢ Advance Payment authority not cited
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Payment Verification Returned Payments FY 17-18
Total dollar amount of return payments:
Fiscal Year 2017-2018
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Closeouts
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Objectives▪ Identify close out activities
145
Ensure all requirements have been met
Account for all funds
Information for future agreements
Expiration of contractDepletion of fundingTermination of agreement
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Closeouts
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Closeouts
PROGRAMMATIC
Compliance requirements
Reports
Receipt of deliverables
Un-assessed financial consequences
Documentation
FISCAL
Cost reconciliation
Match requirements
Disposition of property
Paid to date
Stayed within budget
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Resources
➢ Division of Accounting & Auditing website
http://www.myfloridacfo.com/Division/AA/
➢ Audit Reports
➢ Reference Guide for State Expenditures
➢ Chief Financial Officer Memoranda
➢ Agency Addressed Memoranda
➢ Facts User Manual
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Other Classes➢ Contract and Grant Monitoring
➢ Florida Single Audit Act
➢ Advancing Accountability for Providers
➢ Florida Certified Contract Manager
149
Assessment & Evaluation
150
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Thank You!
Please contact our training team
if you have any questions.
(850) 413-3060
151
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