The URL can be used to link to this page

Agenda 03/12/2013 Item #16D4 3/12/2013 16.D.4. EXECUTIVE SUMMARY Recommendation to approve the submittal of "Criminal Justice Mental Health and Substance Abuse Reinvestment Grant Program Grantee Application for Advance Funding" to the Florida Department of Children and Families (DCF) and the corresponding budget amendment to recognize revenue in the amount of$182,216.27. OBJECTIVE: To access the third year of funding for the Criminal Justice, Mental Health and Substance Abuse(CJMHSA)Reinvestment Grant. CONSIDERATIONS: On February 8, 2011, Agenda Item No. 16D2, the Board of County Commissioners approved a Memorandum of Understanding with the DCF to accept a sum of$548,490 over three (3) Years for the CJMHSA Grant. Of this amount $182,830 was awarded and advanced to Collier County for state fiscal year 2010-2011. On April 10, 2012, Agenda Item No. 16D5, the Board of County Commissioners approved an application for advanced funding that was also submitted and approved for the state fiscal year 2011- 2012. For the second year of funding, $182,655.68 was awarded in addition to interest accrued and advanced to Collier County. This item is to request approval of the application for advanced funding that must be submitted for the state fiscal year 2012-2013 to access the project's third year of funding for the CJMHSA Grant. An application for advanced funding is submitted to comply with grantor agency policies,procedures. and requirements. The application form must be received by the DCF in time to allow for their processing and dispersal prior to June 20, 2013. The amount of the request represents funds appropriated to Collier County by the DCF for the CJMHSA grant for the state's fiscal year 2012-2013. The appropriated and subsequent requested amount is $182,216.27. The project's third year award combined with the interest accrued on the state grant award for 2011-2012 in the amount of $613.73 combined with carry-forward grant funds from project year 2 comprises the total available to Collier County for project Year 3. TOTAL FUNDS AVAILABLE FOR CJMHSA GRANT FOR THIRD YEAR Fund Source Amount Comments (1) DCF–State Fiscal Year $182,216.27 Amount of Advance Funding Application 2012-2013 Funds (2) Interest from Collier's $613.73 To be recognized Grant Funding Advance for State Fiscal Year 2011-2012 Total New Funds for Grant $182,830.00 (Same as State Fiscal Year 2011-12) _ (3) Carryover Funds from $129,540.86 Variable amount—approximately$129,540.86 Year 2012 at this time. TOTAL AMOUNT FOR 2012 $312,370.86 Approximate amount depending on 2012 carryover funds. The purpose of the CJMHSA program is to serve persons who have a mental illness, substance abuse disorder, or co-occurring mental health and substance disorders and who are in, or at risk of entering, the criminal or juvenile justice system. Funding for the CJMHSA program is used to fund staff salaries to Packet Page-1609- 3/12/2013 16.D.4. carry out client management, perform treatment of clients in order to mitigate recidivism back into the criminal justice system. Funding is also used to train officers from the Sheriff's Office in conflict management with people who have mental illness or substance abuse disorders. FISCAL IMPACT: Approval of this item will result in the County receiving$182,216.27 from the DCF and earned interest of$613.73 from Fund 707, Account 99707.1-989010 into Fund 707, Project 33147 to continue funding the operations of the aforementioned grant for state fiscal year 2012-2013. No general funds are associated with this project. A budget amendment is required in the amount of $182,830.00 within Human Services Grant Fund 707, Project 33147. LEGAL CONSIDERATIONS: This item is legally sufficient and requires a majority vote for Board action. -JBW GROWTH MANAGEMENT IMPACT: There are no growth management impacts associated with this item. RECOMMENDATION: To approve and authorize the Chairwoman to sign a "Grantee Application for Advance Funding" to access funding for the CJMHSA Reinvestment Grant's third year of funding from the DCF, recognize the third year advanced funds and revenue from interest earned on advanced funds, and to approve the corresponding budget amendment. Prepared By: Geoffrey Magon, Grants Coordinator,Housing, Human, and Veteran Services • Packet Page -1610- - 3/12/2013 16.D.4. COLLIER COUNTY Board of County Commissioners Item Number: 16.16.D.16.D.4. Item Summary: Recommendation to approve the submittal of"Criminal Justice Mental Health and Substance Abuse Reinvestment Grant Program Grantee Application for Advance Funding" to the Florida Department of Children and Families (DCF) and the corresponding budget amendment to recognize revenue in the amount of$182,216.27. Meeting Date: 3/12/2013 Prepared By Name: MagonGeoffrey Title: Grants Coordinator 2/15/2013 9:29:12 AM Approved By Name: SonntagKristi Date: 2/17/2013 9:35:25 PM Name: LarsenKathleen Date: 2/21/2013 4:21:42 PM Name: AlonsoHailey Title: Operations Analyst,Public Service Division Date: 2/22/2013 1:45:30 PM Name: GrantKimberley Title: Interim Director,HI-IVS Date: 2/22/2013 3:48:49 PM Name: WhiteJennifer Title: Assistant County Attorney,County Attorney Date: 2/26/2013 3:31:47 PM Name: Joshua Thomas Title: Grants Support Specialist, Date: 2/27/2013 9:15:20 AM Packet Page-1611- 3/12/2013 16.D.4. Name: CarnellSteve Title: Director-Purchasing/General Services,Purchasing Date: 2/27/2013 12:59:26 PM Name: KlatzkowJeff Title: County Attorney Date: 2/28/2013 3:30:26 PM Name: StanleyTherese Title: Management/Budget Analyst, Senior,Office of Manage Date: 3/5/2013 11:47:09 AM Name: FinnEd Title: Senior Budget Analyst, OMB Date: 3/5/2013 2:15:46 PM Name: KlatzkowJeff Title: County Attorney Date: 3/6/2013 8:14:42 AM Name: OchsLeo Title: County Manager Date: 3/6/2013 9:57:22 AM Packet Page -1612- 3/12/2013 16.D.4. CRIMINAL JUSTICE MENTAL HEALTH AND SUBSTANCE ABUSE REINVESTMENT GRANT PROGRAM GRANTEE APPLICATION FOR ADVANCE FUNDING A, GRANTEE INFORMATION Government Contact Grantee Type: I Geoffrey Megan Phone (239)252-2556 J 4encY., Person Grantee Collier County Board of DCF MOU# LHZ25 MCDU $548,490.00 ' Name County Commissioners Amt. - . • Attention: Clerk's Finance Office • Address 3299 Tamiami Trail East, MOU Period. 02(24/2011 to 02123/2014 Suite 700 Napies,fL 34112 I Grantee FEID . 59-6000558 B. ADVANCE REQUEST Fiscal Year_j_ Amount j Release Date Notes • Prior fiscal year advance ' 2011 $182,830.00 06117/11 was approved and Requested advance released June,2011. schedule,and.payment amount Prior fiscal year advance • 2012 182,655.68 04126/12 was approved and released April 2012. 201 3 $182,216.27 This Request _I This Request . -- C. JUSTIFICATION• .• Provide DETAILED explanation of why advance fundin_g_is necessary.,' • • '• The Collier County Board of County Commissioners is entering the third year of a 3-year Criminal Justice,Mental Health and Substance Abuse Implementation Grant. This project was approved in compliance with the grant award process created in section 394.656, F.S.This project is a county initiative to increase public safety, avert increased spending on criminal justice,and improve the accessibility and effectiveness of treatment services for adults and juveniles who have a mental illness,substance abuse disorder,or co-occurring mental health and substance abuse disorders and who are in,or at risk of entering,the criminal or juvenile justice systems. This project is an expansion of activities and services by Collier County Board of County -Commissioners to the target populations and requires a 100%County match,as provided by the '". • Collier Forensic Intensive Reintegration Support Team (FIRST). Under these circumstances,the - Grantee does not have the capacity to undertake the grant supported costs of this project out of its own revenue. The grantee was approved and received$188,830.00 for the first project year and$182,655.68 for the second project year. Based on the Semi-Annual and Supplemental Financial Report,Collier County Board of County Commissioners reported$127,486.34 in actual expenses and$108,458.45 in encumbered expenses as of November 30,2012,for a total of$235,944.79 in grant funded expenses. This advance request is based on the third year project budget approved in the Collier County Board County Commissioners grant application and will give the Grantee the capacity to establish and maintain all grant-related activities without interruption. Attach documentation in support of this request such as audited financial statements Identifying all j._organization assetsjiabilities,etc. Packet Page -1613- 3/12/2013 16.D.4. 1)A Summary Financial Report for the Collier County Board of Commissioners project supported by these funds is attached.2)The most recent county audit available covers the county Fiscal Year ending September 30,2011. (March 13,2012)A copy of independent auditors report with details of the Federal Awards Programs and State Financial Assistance Projects is attached. Explain how advanced funds are to be used ___..__..._.. .,- _..__...__._.-t { The Collier County Criminal Justice Advisory Council will implement the first phase of the Collier Grant Memorandum of Understanding. Examples of service deliverables that Collier County plans to { accomplish with this grant are: • Implement jail and community-based transitional support for adults with serious mental illnesses and co-occuring substance abuse disorders • Establish the Forensic Intensive Reintegration Support Team(FIRST) • Provide reintegration and transitional support through an interagency multidimensional team • Prevent recidivism for this high risk group and promote public safety • Provide an Intensive case management tool • Activities of the program include screenings, risk assessment,primary and psychiatric care, competency restoration, housing guidance,counseling, peer support,transitional planning, living and vocational,skills evaluation and_piannin __— Do you plan to.make advance payments, using any portion of these funds, to subcontractors who are other than not—for—profit corporations or governmental agencies? _.___.__. -...... ._.. . .__..__...._........ ._......._._._...____._.....-_.� Yes Ej .__No®__... Ifs, please identify those corporations: _._.....-_-_-..___._.__ ._Will advanced funds_be placed Ininterest bearing_account(s)..pending disbursement? • • Yes ® No El Interest accrued on advanced funds is to be reported semi-annually to the Department. Interest earnings are being used to reduce the amount due for second and third project year advances,as an offset to approved project expenses. Unapplied interest, unexpended advances or unmatched fundingwill be returned to the State of Florida upon expiration of this MOU on 02/23/14._ If no ��_P lease explain: N/A D.'HISTORY OF-ADVANCE PAYMENTS •_ • -- CASH ADVANCES � _ INTEREST SFY I DATE 1 # $AMOUNT $EARNED _$RETURNED 2011 06/17/11 I $182,830.00 i $788.05 as of LHZ25 Pending,please see below 2012 04/26/12 $1821655.68 [[ 11/30/12 Please explain each Instance where interest returned to the department Is less than the interest earned: ____ Under this MOU, interest accrued on the first two advances is being used to offset the total amount due to the county for the second and third project year. The Collier County Board of County Commissioners will apply the unreturned interest accrued to project expenses. Interest accrued on the third year advance will continue to be reported and that amount will be returned to the State upon expiration of this MOU. All unspent grant funds, unmatched grant funds, and unapplied interest will l be returned to the State upon expiration of this MOU. -----__E. FUTURE ADVANCES._._, Please provide a brief summary of your plans showing what actions will betaken to minimize or eliminate the need for future advances from the department: Collier County Board of County Commissioners and the Department of Children and Families -.anticipate that this is the third and final annual release of funds for this program in com_pliancewith._ 2 Packet Page -1614- 3/12/2013 16.D.4. the grant award period established in section 394.656,F.S.,and the terms of fl/IOU#LHZ26. Future funding is contingent on annual Legislative appropriations. Collier County is solely responsible for _securing any required funding for sustainability after February 23,2014. . ' *F. CERTIFICATION I herei4i.tertIfy that! have verified:the information:provIded.in this.GRANTEE APPLICATION F.pRADIl*NC .fuNDINp to be acchrate and corhplete,and th4it.rehresents the minirnum ampunt(s)ianteet the cash ilSscis..reStiltipg.frciiri'lhe :DpFManorandtri of Understanding fPrAitihlPh this advance paymer4 is being requested I f040-00Y164tAP4ch funds received in advance 0■441!)/.00.0eadipr aphroVed0OpoOestlyi aCCOrdanceWIth.applicahie federal and state laws, rnies,'regulations, policies and Memorandum of Understanding terms and conditions. Georgia A. Hiller, Esq. Chairwoman .SIGNATURE " • TITLE DATE • . ,•FOR.DEPARTMENT LISEDNLY • THIS SECTION TO BE COMPLETED 13y;THE Apppcation GRANT:MANAGER ' , • Received PRIOR CONTRACT PERFORMANCE: Does the GRANTEE have aftistory of contracting with the, department? Yes 1 NoLJ If!ves"..,'have there been any instances of unsatisfactory.p_erformance?____:______ ....- YesLJ NoEJ If:'yes",_please explain RECOMMENDATIONS Do Not Approve For Advance FundIng,:- LRecornmend For Advance Funding Please provide rationale supporting your disapproval/recommendation. 'SIGNATURE " TITLE - • DATE ' I • THIS.SECTION TO BE COMPLETED BY CONTRACT ADMINISTRATION AND.BUDGET CONTRACTADMINISTRATION A • '':,:,BUDGET,MANAGER Based on the information presented in the above • The subject budget appropriation is.Lj;is not application,advance payments are la are not El autiwrized:(GRANTS AND AIDS)for advance PYITIent allowable pursuant to section 216.181,T.S. and sufficient'funds are/are not available. Signed Date Signed Date ATTEST: E BROOK, Clerk Approveti as to form & legal SuMairienty DWIGHT . Prav VL.)\\"4' .MIL*Ino■MOMPROSIMIC••■■., Ass*tont County Atrorney . 3 (-24,03 Packet Page-1615- 3/12/2013 16.D.4. a CRIMINAL JUSTICE MENTAL HEALTH AND SUBSTANCE ABUSE REINVESTMENT GRANT PROGRAM SUMMARY FINANCIAL REPORT County Collier MOU# LHZ25 MOU Begin Date 02/24/2011 End Date 02/23/2014 County Grant Director, Manager Kim Grant Title and Agency Collier County Housing, Human and Veteran Services County Lead Agency HHVS Grant Type Implementation Report Prepared By Kathy Larsen Report Date 10/25/12' Report Period: From 04/01/2012 To: 09/30/12 CJMHSA Expense Total CJMHSA Approved Budget` Category Grant Award I County Match 1 Total DIRECT EXPENSES Salaries: $0.00 $0.00 $0.00 Fringe Benefits: $0.00 $0.00 $0.00 Equipment: $0.00 $0.00 $0.00 Travel: $0.00 $0,00 $0.00 Supplies: $0.00 $0.00 .$0.00 Rent/Utilities: $0.00 $0.00 $0.00 Other Expenses: $99,300.00 $0.00 $99,300.00 SUBTOTAL DIRECT _ $99,300.00 $0.00 , $99,300.00 CONTRACTUAL EXPENSES _ Consultant Fees: $319,200.00 $230,802.00 $550,002.00 Fringe Benefits: $66,933.00 $0.00 $66,933.00 Equipment: $0.00 $0.00 ` $0.00 .° w Travel: $7,692.00 $0.00 . $7,692.00 Supplies: $1,365.00 $1,365.00 ' ''.'$2,730.00 r Rent/Utl lities: $0.00 $19,584,00 $19,584.00 Other Expenses: $0.00 $296,796.00 $296,796.00 SUBTOTAL , $395,190.00 $548,547.00 $943,737.00 CONTRACTUAL ADMINISTRATIVE$ $54,000.00 , $0.00 $54,000.00 ADMINISTRATIVE % 9.8% 0.0% 4.9% TOTAL ALL COSTS $548,490.00 r $548,547.00 $1,097,037.00 STATE ADVANCES AND INTEREST CJMHSA Funds $365,485.68 Date Funds 04/26/12 Advanced Advanced v Accrued interest on $788.05 3 Interest Accrued 11/30/12 Advances As Of Date I Next Semi-Annual Report is due May 1, 2013. 2 As approved in the county CJMHSA Memorandum of Understanding on file with the Department of Children and Families or as revised with written approval of the Department of Children and Families, 3 Interest reported in the Semi-annual Financial Report and Supplemental Financial Report. 4 Packet Page -1616- 3/12/2013 16.D.4. CJMHSA Expense Category CJMHSA Expenses CJMHSA Expenses CJMHSA Total This Period Prior Periods Expenses to Date DIRECT EXPENSES Salaries: $0,00 $0.00 $0.00 Fringe Benefits: $0.00 $0.00 $0.00 Equipment: $0.00 $0.00 $0.00 _Travel: $0.00 $0.00 $0.00 Supplies: $0.00 $0.00 $0.00 Rent/Utilities: $0.00 $0.00 $0.00 Other Expenses: $0.00 $3,593.40 $3,593,40 SUBTOTAL DIRECT $0.00 $3,593.40 $3,593.40 CONTRACTUAL EXPENSES _ Consultant Fees: $3,177.19 $87,302.62 $90,479.81 Fringe Benefits: $802.99 $12,342.44 $13,145.43 Equipment: $0.00 $0,00 $0,00 Travel: $0,00 $406.77 $406.77 Supplies: $0.00 $193.52 $193.52 Rent/Utilities: $0.00 $0,00 $0.00 Other Expenses: $0,00 $0.00 $0.00 SUBTOTAL CONTRACTUAL $3,980.18 $100,245.35 $104,225.53 ADMINISTRATIVE$ $1,918.80 $17,748.61 $19,667.41 ADMINISTRATIVE % 38.7% 14.6% 15.5% TOTAL ALL COSTS $4,957.11 $121,587.36 $126,544.47 STATE ADVANCES AND INTEREST CJMHSA Funds Advanced I $365,485.68 Available Fund Balance 11/30/12 1 $129,540.866 "Grant funded expenses only from 10/01/12 through 11/30/12, as reported in the Supplemental Financial Report submitted to the Department of Children and Families. 6 Grant funded expenses only from date of MOU execution through 09/30/12, as reported in the Semi- Annual Financial Report submitted to the Department of Children and Families. 6 in addition to the expenses shown, Collier reported$108,458.45 in encumbered grant funded expenses from 10/01/12 through 11/30/12, for a total of$235,944.79 in actual and encumbered expenses, The available fund balance with the inclusion of the encumbered expenses would be$129,540.86. 5 • Packet Page -1617- 3/12/2013 16.D.4. SINGLE AUDIT/FEDERAL AND STATE SCHEDULE OF FINANCIAL ASSISTANCE The Single Audit/Federal and State schedule of financial assistance section presents Grants compliance reports filed by Collier County with Federal government and State government, respectively. Avak Packet Page -1618- 3/12/2013 16.D.4. THIS PAGE INTENTIONALLY LEFT BLANK Packet Page-1619- 3/12/2013 16.D.4. lj111111111111111 I I kW ERNST& YOB iJ NG Ernst&Young LLP Suite 500 5100 Town Center Circle Boca Raton,FL 33486 Tel: +1 561 955 8000 Fax:+1 561 955 8200 www.ey,com Report of Independent Certified Public Accountants 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 Members of the Board of County Commissioners Collier County, Florida We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida (the County) as of and for the year ended September 30, 2011, which collectively comprise the County's basic financial statements and have issued our report thereon dated February 29, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal control over financial reporting Management of the County is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the County's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over financial reporting. 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 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. Our consideration of internal control over financial reporting 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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Amok 1202-1333029 163 A member firm of Ernst 8 Young Global Limited Packet Page-1620- 3/12/2013 16.D.4. IIII11I11111111j1 =91 ERNST&YOUNG Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the County in a separate letter dated February 29,2012. This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. /144.gt yowritka February 29,2012 1202-1333029 1 64 A member firm of Ernst 8 Young Global limited Packet Page -1621- 3/12/2013 16.D.4. IY�II��III'ii' '� ERST&YOUNV Ernst& oungLIP Suite C 111111111111 5100 Town Center Circle Boca Raton,FL 33486 Tel: +1 561 955 8000 Fax:+1 561 955 8200 www.ey,com Report of Independent Certified Public Accountants on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance With OMB Circular A-133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General Members of the Board of County Commissioners Collier County, Florida Compliance We have audited Collier County, Florida's (the County) compliance with the types of compliance requirements described in the US Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, and the requirements described in the Department of Financial Service's State Projects Compliance Supplement, that could have a direct and material effect on each of County's major federal programs and state projects for the year ended September 30, 2011. The County's major federal programs and state projects are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs and state projects is the responsibility of the County's management. Our responsibility is to express an opinion on the County's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; Section 215.97, Florida Statutes (Section 215.97); and Chapter 10.550, Rules of the Auditor General, State of Florida (Chapter 10.550). Those standards, OMB Circular A-133, Section 215.97 and Chapter 10.550 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the County's compliance with those requirements. 1202-1333029 165 A member runt of Ernst x Young Global Limited • Packet Page-1622- 3/12/2013 16.D.4. 111 Illlllllillf"'1 rXERNST&YOUNG i1 The County did not comply with the types of compliance requirements that are applicable to each major federal program as described in the accompanying schedule of findings and questioned costs and referenced by finding number below: Compliance CFDA Number Major Program Requirement Finding Reference Community Development Block Grants/Entitlement 14.218 Grants Cash Management 2011-1, 2011-6 Allowable Costs/Cost Principles 2011-1, 2011-8 Reporting 2011-2 Subrecipient Monitoring 2011-3 Special Tests and Provisions 2011-4 Procurement, Suspension and Debarment 2011-5 Program Income 2011-6 Summer Food Service Allowable Costs/Cost 10.559 Program for Children Principles 2011-10 Cash Management 2011-11 Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to those programs. In our opinion, because of the effects of the noncompliance described in the table above, the County did not comply in all material respects, with the requirements referred to above that could have a direct and material effect on the Community Development Block Grants/Entitlement Grants (CFDA No. 14.218) and the Summer Food Service Program for Children (CFDA No. 10.559)federal programs for the year ended September 30, 2011. 1202-1333029 166 A member Arm of Ernst G Young Global Limited Packet Page-1623- 3/12/2013 16.D.4. I�''�FrI � 1111111111111111 El ERNST&YOUNG Anok The County did not comply with the types of compliance requirements that are applicable to each major federal program or state project as described in the accompanying schedule of findings and questioned costs and referenced by the finding numbers below: CFDA/CSFA Compliance Number Major Program Requirement Finding Reference Community Development Block 14.228 Grant/State's Program Cash Management 2011-I Reporting 2011-2 Special Tests and Provisions 201 1-4 Allowable Costs/Cost Principles 2011-8 ARRA: Homelessness Prevention and Rapid Subrecipient 14.257 - Re-Housing Program Monitoring 2011-3 Cash Management 2011-1 Asilk State Housing initiatives 52.901 Partnership Program Reporting 2011-2 Allowable Costs/Cost Principles 2011-8 Florida Boating Improvement 77.006 Program Matching 2011-7 Reporting 2011-9 Community Care for Allowable Costs/Cost 65.010 the Elderly Program Principles 2011-8 Compliance with such requirements is necessary, in our opinion, for the County to comply with the requirements applicable to those programs. 1202-1333029 167 A member firm of Ernst 8 Young Global Limited Packet Page-1624- 3/12/2013 16.D.4. f gil ERNST&YOUNG Also, in our opinion, except for the noncompliance described in the table above, the County complied, in all material respects with the compliance requirements referred to above that could have a direct and material effect on the following federal programs and state projects: Community Development Block Grant/State's Program (CFDA No. 14.228), ARRA: Homelessness Prevention and Rapid Re-Housing Program (CFDA No. 14.257), State Housing Initiatives Partnership Program (CSFA No. 52.901), Florida Boating Improvement Program (CSFA No. 77.006), and Community Care for the Elderly Program (CSFA No. 65.010) for the year ended September 30, 2011. Moreover, in our opinion, the County complied, in all material respects, with the compliance requirements referred to in the first paragraph that could have a direct and material effect on each of its other major federal programs and state projects other than those referred to in the two preceding tables for the year ended September 30, 2011. Internal control over compliance The management of the County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the County's internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, Section 215.97, or Chapter 10.550, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses. 1202-1333029 168 A member firm of Ernst E Young Gtobat Limited Packet Page-1625- 3/12/2013 16.D.4. '' 11111111111111 FA ERNST&YOUNG Agok A deficiency in internal control over compliance 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, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2011-1 to 2011-11 to be material weaknesses. The County's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the County's responses and, accordingly,we express no opinion on the responses. This report is intended solely for the information and use of management, the Board of County Commissioners, others within the entity, the Auditor General of the State of Florida, federal and state awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. February 29, 2012 1202-1333029 1 69 A member firm of Ernst a Young Global Limited Packet Page-1626- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CFDA#/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA# Grant/Contract Number Expenditures Subrecipients Department of Agriculture Direct Programs: Rural Development: Rural Business Enterprise Grants 10.769 09-011-596000558 $ 378,147 $ - Indirect Programs: Florida Department of Education: Summer Food Service Program for Children 10.559 04-0804 617,280 - Florida Department of Agriculture and Consumer Services: Cooperative Forestry Assistance 10.664 16421 12,248 - Cooperative Forestry Assistance 10.664 Collier County-Isle of Capri 4,680 - Cooperative Forestry Assistance 10.664 Collier County-Ochopee 2,063 - Total CFDA 18,991 - Total Department of Agriculture 1,014,418 Department of Commerce Indirect Programs: Florida Department of Community Affairs: Public Safety Interoperable Communications Grant Program 11.555 11-DS-8D-09.21-01-281 1,376,565 - Total Department of Commerce 1,376,565 - Department of Housing and Urban Development Direct Programs: Office of Community Planning and Development: • CDBG-Entitlement Grants Cluster: Community Development Block Grants/Entitlement Grants 14.218 B-02-UC-12-0016 5,160 - Community Development Block Grants/Entitlement Grants 14.218 B-04-UC-12-0016 2,650 - Community Development Block Grants/Entitlement Grants 14.218 8.08-UC-12-0016 73,234 73,200 Community Development Block Grants/Entitlement Grants 14.218 B-08-UN-12-0003 . 2,086,331 - Community Development Block Grants/Entitlement Grants 14.218 B-D9-UC-12-0016 •308,272 303,324 Community Development Block Grants/Entitlement Grants 14.218 B-10-UC-12-0016 668,253 242,370 Total CFDA 3,143,900 618,894 ARRA Community Development Block Grant ARRA Entitlement Grants 14.253 ARRA B-09-UY-12-0016 34,930 27,000 Total CDBG-Entitlement Grants Cluster 3,178,830 645,894 Emergency Shelter Grants Program 14.231 S-09-UC-12-0024 6,405 6,405 Emergency Shelter Grants Program 14.231 S-1D-UC-12-0024 87,684 87,684 Total CFDA 94,089 94,089 Supportive Housing Program 14.235 F10294840060801 231 - Supportive Housing Program 14.235 FL0294B4D060802 65,617 - Supportive Housing Program 14.235 FL029484D061003 28,309 - Supportive Housing Program 14.235 FL0295B4D060801 19,133 19,133 Supportive Housing Program 14.235 F102951340060802 49,383 49,383 Supportive Housing Program 14.235 FL02966411060801 41,984 39,294 Supportive Housing Program 14.235 F10296640060802 31,943 29,523 Supportive Housing Program 14.235 FL0296B4D061003 156 - Total CFDA 236,756 137,333 Home Investment Partnerships Program 14.239 M-07-UC-12-0217 6,954 - Home Investment Partnerships Program 14.239 M-09-UC-12-021.7 139,333 138,710 Home Investment Partnerships Program 14.239 M-10-UC-12-0217 110,249 61,673 Total CFOA 256,536 200,383 ARRA Homelessness Prevention and Rapid Re-Housing Program(HPRP) 14.257 ARRA S09-UY-12-0024 382,268 382,219 (Continued) See accompanying notes to the schedule of expenditures of federal awards and state projects. 170 Packet Page -1627- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CFDA k/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA tt Grant/Contract Number Expenditures Subrecipients Indirect Programs: Florida Department of Community Affairs: Community Development Block Grants/States Program 14.228 07DB3V092101Z01 $ (1,254) $ - Community Development Block Grants/State's Program 14.228 08DBD3092101A03 10,088 Community Development Block Grants/States Program 14.228 10-DB-D4-09-21-01-K09 645,610 - Total CFDA 654,444 - Total Department of Housing and Urban Development 4,802,923 1,459,918 Department of the Interior Direct Programs: Bureau of Land Management: Payments in Lieu of Taxes 15.226 Collier County 1,240,307 Fish and Wildlife Service: Coastal Program 15.630 401815J021 50,000 - Partners for Fish and Wildlife 15.631 401815/021 44,145 - Total Department of the Interior 1,334,452 Department of Justice JAG Program Cluster: Direct Programs: ARRA Recovery Act-Edward Byrne Memorial Justice Assistance Grant (JAG)Program/Grants to Units Of Local Government 16.804 ARRA 2009-SB-B9-1969 8,107 Bureau of Justice Assistance: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2008-DJ-BX-0340 2,312 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2009-DJ-BX-0335 132,272 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2010-DJ-BX-0576 109,052 Indirect Programs: Florida Department of Law Enforcement: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2010-JAGC-COLL-I-4X-221 12,265 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2011-1AGC-COLL-1-B2-213 157,202 - Total CFDA 413,103 - ARRA Recovery Act-Edward Byrne Memorial Justice Assistance Grant (JAG)Program/Grants to States and Territories 16.803 ARRA 2010-ARRC-COLL-I-W7 36,374 - Total JAG Program Cluster 457,584 - Direct Programs: Office of Victims of Crime: Services for Trafficking Victims 16.320 2005-VT-BX-0002 1,107 Services for Trafficking Victims 16.320 2010-VT-BX-0004 136,502 Total CFDA 137,609 Violence Against Women Office: Supervised Visitation,Safe Havens for Children 16.527 2007CWAX0007 (715) - Supervised Visitation,Safe Havens for Children 16.527 2009CWAXK011 119,170 - Total CFDA 118,455 - Bureau of Justice Assistance: Drug Court Discretionary Grant Program 16.585 2010-DC-BX-0016 40,632 - State Criminal Alien Assistance Program 16.606 2008-AP-8X-0859 11,900 - Office of Community Oriented Policing Services: Public Safety Partnership and Community Policing Grants 16.710 2009CKWX0204 2,165 - Public Safety Partnership and Community Policing Grants 16.710 2010CKWX0107 185,036 - Total CFDA 187,201 - Indirect Programs: Florida Office of Attorney General: ' ?:. Crime Victim Assistance 16.575 V10129 131,657 (Continued) • 171 Packet Page -1628- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CFDA IJ/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA P Grant/Contract Number Expenditures subrecipients Florida Department of Children and Families: Violence Against Women Formula Grants 16.588 12-8008-LE $ 35,795 S - Violence Against Women Formula Grants 16,588 LN916 111,911 - ARRA Violence Against Women formula Grants 16.588 ARRA LN947 28,164 - Total CFDA 175,870 - Florida Department of Law Enforcement: Project Safe Neighborhoods 16.609 2008-PMAG-COLL-1-R6-005 10,041 - Total Department of Justice 1,270,949 - Department of Transportation Direct Programs: Federal Aviation Administration(FAA): Airport improvement Program 20.106 3-12-0142-006-2009 101,741 - Airport Improvement Program 20.106 3-12-0142-008-2010 3,599,931 - Total CFDA 3,701,672 - Federal Transit Administration(FTA): Federal Transit Cluster: Federal Transit_Capital Investment Grants 20.500 FL-03-0264-00 63,636 - Federal Transit_Capital Investment Grants 20.500 P1-04-0047-00 107,055 - Federal Transit_Capital Investment Grants 20.500 fL-04-0117-00 26,314 - Total CFDA 197,005 ARRA Federal Transit_Formula Grants 20.507 ARRA FL-96-X019.00 65,300 - Federal Transit_Formula Grants 20.507 FL-90-X665-00 12,047 - Federal Transit_Formula Grants 20.507 fL-90-X699-00 166,353 - Federal Transit_Formula Grants 20.507 FL-90-X731-00 1,217,178 - Total CFDA 1,460,878 - Total Federal Transit Cluster 1,657,883 - Indirect Programs: Florida Department of Transportation: Highway Planning and Construction 20.205 416237-1/AQ076 20,949 - Highway Planning and Construction 20.205 420871-1/A4377 414,595 - Highway Planning and Construction 20.205 423654-1/APD71 27,823 - Highway Planning and Construction 20205 423655-1/APM21 43,202 Highway Planning and Construction 20.205 425556-1/AQ382 76 - Highway Planning and Construction 20.205 426836-1/AQ258 44,550 - Highway Planning and Construction 20.205 427936-1/A0,383 8,757 - Total CFDA 559,952 - Metropolitan Transportation Planning 20.505 410113-1/AP031 37,964 - Formula Grants for Other Than Urbanized Areas 20.509 410120-1/AOW89 505,749 - ARRA Formula Grants for Other Than Urbanized Areas 20.509 ARRA 426772-1/API19 23,819 - Total CFDA 529,568 - Capital Assistance Program for Elderly Persons and Persons with Disabilities 20.513 FL-16-0035 234,616 Total Department of Transportation 6,721,655 - Department of Treasury Direct Programs: Department of Treasury: Federal Equitable Sharing 21.UNK Collier County Sheriff 24,300 - Total Department of Treasury 24,300 - (Continued) 172 Packet Page -1629- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CFDA ti/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA it Grant/Contract Number Expenditures Subrecipients Department of Enerev Direct Programs: ARRA Energy Efficiency and Conservation Block Grant Program(EECBG) 81.128 ARRA DE-EE0000783 $ 1,628,355 $ - Total Department of Energy 1,628,355 - U.S.Election Assistance Commission Indirect Programs: Florida Department of State: Help America Vote Act Requirements Payments 90.401 Collier County-FY 2006-2007 2,439 Help America Vote Act Requirements Payments 90.401 Collier County-FY 2007-2008 756 - Help America Vote Act Requirements Payments 90.401 Collier County-FY 2008-2009 53,534 - Total U.S.Election Assistance Commission 56,729 - Department of Health and Human Services Direct Programs: Health Resources and Services Administration: Health Care and Other Facilities 93.887 C76HF15996 46,475 - Specially Selected Health Projects 93.888 D1ARH20098 67,970 67,970 Specially Selected Health Projects 93.888 D1BIT10769 159,988 Total CFDA 227,958 67,970 Indirect Programs: Florida Department of Elder Affairs-Area Agency on Aging for Southwest Florida,Inc.: Aging Cluster: Special Programs for the Aging_Title III,Part B_Grants for Supportive Services and Senior Centers 93.044 OAA 203.010 16,370 - Special Programs for the Aging Title Ill,Part B_Grants for Supportive Services and Senior Centers 93.044 OAA 203.2011 54,826. • Total CFDA 71,196 - Special Programs for the Aging_Title III,Part C_Nutrition Services 93.045 OAA 203.010 64,659 - Special Programs for the Aging_Title III,Part C_Nutrition Services 91045 OAA 203.2011 278,266 - Total CFDA 342,925 - Nutrition Services Incentive Program 93.053 NSIP 203.10 35 - Nutrition Services Incentive Program 91053 NSIP 203.11 30,219 - Total CFDA 30,254 - Total Aging Cluster 444,375 - National Family Caregiver Support,Title III,Part E 93.052 OAA 203.010 2,680 - National Family Caregiver Support,Title III,Part E 93.052 OAA 203.2011 41,904 - Total CFOA 44,584 - Florida Department of Revenue: Child Support Enforcement 93.563 CD311 200,241 - Florida Department of State: Voting Access for Individuals with Disabilities Grants to States 93.617 2010-2011-0002 9,912 - Florida Department of Transportation-Commission for the Transportation Disadvantaged: Medical Assistance Program 93.778 416043-1/BDMS9 505,235 - Total Department of Health and Human Services 1,478,780 67,970 Corporation for National and Community Service Direct Programs: Retired and Senior Volunteer Program 94.002 09SRSFLO17 55,341 • rte. Total Corporation for National and Community Service 55,341 - (Continued) 173 Packet Page -1630- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CFDA ft/ Transfers to Federal or State Grantor/Pass-Through Grantor Program Title CSFA U Grant/Contract Number Expenditures Subreciplents /Department of Homeland Security Indirect Programs: Florida Department of Community Affairs: Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 06-W1-&K-09-21.01.692 $ 187,271 $ - Disaster Grants-Public Assistance(Presidentially Declared Disasters) 97.036 08-FA-89-09-21-00-509 17,915 - Total CFDA 205,186 - Hazard Mitigation Grant 97.039 1OHM-88-09.21-01-008 63,550 - Hazard Mitigation Grant 97.039 11HM-3E-09-21-01.005 47,082 - Hazard Mitigation Grant 97.039 10HM-138-09-21-01-010 85,183 - Hazard Mitigation Grant 97.039 11HM-3E-09-21-01-004 46,943 - Total CFDA 242,758 - Emergency Management Performance Grants 97.042 11-FG-7W-09-21-01-030 92,701 - Homeland Security Grant Program 97.067 11-D5-29-09-21-01.24D 16,729 - Florida Department of Law Enforcement: Homeland Security Grant Program 97.067 2007-LETP-COLL-1Q4-005 200,000 - Homeland Security Grant Program 97.067 2007-LETP-COLL-2Q4-003 200,000 - Homeland Security Grant Program 97.067 2008-LETP-00LL-153-017 114,102 - Homeland Security Grant Program 97.067 2008-SHSP-COLL-154-010 25,562 - Total CFDA 556,393 - Total Department of Homeland Security 1,097,038 - TOTAL EXPENDITURES OF FEDERAL AWARDS S 20,861,505 5 1,527,888 Florida Department of Environmental Protection Voluntary Cleanup Tax Credit(VCTC)Program 37.056 218 $ 25,790 $ - Total Florida Department of Environmental Protection 25,790 - Florida Department of State and Secretary of State State Aid to Libraries 45.030 07-5T-12 107,291 - State Aid to Libraries 45.030 O8-5T-12 179,320 - State Aid to Libraries 45.030 09-ST-10 4,750 - Total Florida Department of State and Secretary of State 291,361 - Florida Department of Community Affairs Emergency Management Programs 52.008 11-85-05-09-21-01-130 77,043 - Emergency Management Programs 52.008 12-BG-0S-09-21-01-011 43,511 - Total CFDA 120,554 - Emergency Management Projects 52.023 11-CP-03-09-21-01-221 7,300 - Total Florida Department of Community Affairs 127,854 - Florida Housing Finance Corporation State Housing Initiatives Partnership(SHIP)Program 52.901 Collier County/Naples 466,690 42.701 Total Florida Housing Finance Corporation 466,690 42,701 Florida Department of Transportation Commission for the Transportation Disadvantaged(CT0)Trip and Equipment Grant Program 55.001 20724618401/20724638401/APZ63 440,451 - Commission for the Transportation Disadvantaged(CM)Trip and Equipment Grant Program 55.001 20724618401/20724638401/AQ816 156,387 - Total CSFA 596,838 - (Continued) 174 Packet Page-1631- 3/12/2013 16.D.4. COLLIER COUNTY,FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE PROJECTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2011 CEDA 8/ Transfers to Federal or State Grantor/Pass•Through Grantor Program Title CSFA II Grant/Contract Number Expenditures Subrecipients Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 20724621401/AQB39 $ 92 $ - Commission for the Transportation Disadvantaged(CTD) Planning Grant Program 55.002 20724521401/AQ034 17,402 • Total CSFA 17,494 - Aviation Development Grants 55.004 206430-1/A1935 6,615 - AviationDevelopmentGrants 55.004 414298-1/AOV99 14,481 - Aviation Development Grants 55.004 414299-1/AOR09 37,279 - Aviation Development Grants 55,004 414299-1/AOR09 106,775 - Aviation Development Grants 55.004 425515-1/AQ122 400 - Total CSFA 165,550 - Public Transit Block Grant Program 55.010 410139-1/AOW93 902,706 - Intermodal Development Program 55.014 420353-1/APF60 156,209 - State Infrastructure Bank 55.020 420655-2/EIF59 1,875,930 - Transportation Regional Incentive Program(TRIP) 55.026 425477-1 2,914,908 - Total Florida Department of Transportation 6,629,635 - Florida Department of Children and Families Homeless Challenge Grant 60.014 HFZ1D 25,887 10,324 Public Safety,Mental Health,and Substance Abuse Local Matching Grant 60.115 LHZ25 22,261 - Total Florida Department of Children and Families 48,148 10,324 Florida Deoartmentof Health • County Grant Awards 64.005 C8011 18,936 - County Grant Awards 64.005 C9011 16,090 - Total Florida Department of Health 35,026 Florida Department of Elder Affairs Area Agency on Aging for Southwest Florida,Inc: Home Care for the Elderly 65.001 HCE 203.10 2,922 - Home Care for the Elderly 65,001 HCE 203.11 317 - Total CSFA 3,239 - Alzheimer's Respite Services 65.004 ADI 203.10 101,842 - Alzheimer's Respite Services 65.004 ADI 203.11 41,356 - Total CSFA 143,198 - Community Care for the Elderly(CCE) 65.010 CCE 203.11 135,644 - Community Care for the Elderly(CCE) 65.010 CCE 203.10 544,546 - Total CSFA 680,190 - Total Florida Department of Elder Affairs 826,627 - Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program 77.006 08079 276,492 - Florida Boating Improvement Program 77.006 10235 11,980 - Total Florida Fish and Wildlife Conservation Commission 288,472 - TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE $ 8,739,603 $ 53,025 175 Packet Page -1632- 3/12/2013 16.D.4. Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Projects Year Ended September 30,2011 1.Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards and State Projects (the Schedule) includes the Federal and State grant activity for Collier County, Florida (the County) and is presented on the modified accrual basis of accounting for expenditures accounted for in the governmental funds and the accrual basis of accounting for expenditures in proprietary funds. Under the modified accrual basis, revenue is recognized if it is both measurable and available for use during the fiscal year and expenditures are recognized in the period liabilities are incurred, if measurable. Under the accrual basis, expenditures are recognized in the period liabilities are incurred. The information in the schedule is presented in accordance with the requirements of U.S. Office of Management and Budget (OMB) Circular A-I33, Audits of States, Local Governments; and Non-Profit Organizations, and Section 215.97, Florida Statutes. Therefore, some amounts presented in the Schedule may differ from amounts presented, or used in the preparation of, the basic financial statements for the fiscal year ended September 30, 2011. 2. State Infrastructure Bank Loan Collier County received a $12,000,000 State Infrastructure Bank Loan from the Florida Department of Transportation in fiscal year 2008 for construction of the I-75/1mmokalee Road interchange. The Florida Department of Transportation included this project with their concurrent widening of I-75 and retained the loan proceeds to fund the project. Accordingly, the County's expenditures for purposes of reporting on the Schedule consist of principal loan repayments only ($1,875,930 for fiscal year 2011) as no proceeds were received under the loan and no project expenditures were incurred or paid directly by the County. The current balance of the loan as of September 30, 2011 is $6,327,545. The repayment schedule for this loan is as follows: Payment Date Principal Interest Total 10/1/2008 1,957,377 82,623 2,040,000 10/1/2009 1,839,148 200,852 2,040,000 10/1/2010 1,875,930 164,070 2,040,000 10/1/2011 1,913,449 126,551 2,040,000 10/1/2012 4,414,096 88,282 4,502,378 $ 12,000,000 $ 662,378 $ 12,662,378 1202-1333029 176 Packet Page-1633- 3/12/2013 16.D.4. Collier County, Florida Notes to the Schedule of Expenditures of Federal Awards and State Projects 3. Contingency The grant revenue amounts received are subject to audit and adjustment. If any expenditures or expenses are disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the County. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal and state laws and regulations. 4. Negative Figures on the Schedule of Expenditures Negative expenditures reported in the Schedules of Expenditures of Federal Awards and State Financial Assistance are a result of corrections which reduced expenditures in one grant and increased expenditures in another grant or funding source. Although the current expenditures on a grant may be negative, the total of all expenditures on the grant is expected to be positive over its total period of performance. Amok 1202-1333029 177 Packet Page -1634- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs For the Year Ended September 30, 2011 Part I—Summary of Auditor's Results Financial Statements Section Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards and State Projects Section Internal control over major programs: Material weakness(es) identified? X Yes No Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance Adverse for the Community Development for major programs: Block Grants/Entitlement Grants (CFDA# 14.218)and the Summer Food Service Program for Children(CFDA# 10.559); Qualified for the Community Development Block Grant/State's Program (CFDA# 14.228),the ARRA: Homelessness Prevention and Rapid Re-Housing Program (CFDA# 14.257), the State Housing Initiatives Partnership Program (CSFA# 52.901), the Florida Boating Improvement Program (CSFA#77.006), and the Community Care for the Elderly Program (CSFA#65.010); and Unqualified for all other major federal programs and state projects 1202-1333029 1 78 Packet Page -1635- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Any audit findings disclosed that are required to be reported in accordance with section .510(a)of OMB Circular A-133, Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida? X Yes No Identification of major federal programs: Federal Programs CFDA Number Federal Agency/Name of Federal Program U.S. Department of Housing and Urban Development: 14.218, 14.253 CDBG—Entitlement Grants Cluster Community Development Block Grant/State's 14.228 Program (DRI) ARRA: Homelessness Prevention and Rapid Re- housing Program (HPRP) (Recovery Act 14.257 Funded) U.S. Department of the Interior Bureau of Land Management: 15.226 Payment in Lieu of Taxes U.S. Department of Commerce: Public Safety Interoperable Communications 11.555 Grant Program U.S. Department of Transportation: 20.106 Airport Improvement Program U.S. Department of Homeland Security: 97.067 Homeland Security Grant Program U.S. Department of Agriculture: 10.559 Summer Food Service Program for Children A 1202-1333029 179 Packet Page-1636- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Identification of major state projects: State Projects CSFA Number State Agency/Name of State Project Florida Housing Finance Corporation: 52.901 State Housing Initiatives Partnership Program (SHIP) Florida Department of Transportation: Commission for the Transportation Disadvantaged 55.001 (CTD) Trip and Equipment Grant Program 55.020 State Infrastructure Bank Loan Program 55.026 Transportation Regional Incentive Program (TRI.P) Florida Department of Elder Affairs: 65.010 Community Care for the Elderly Florida Fish and Wildlife Conservation Commission: 77.006 Florida Boating Improvement Program Dollar threshold used to distinguish between Type A and Type B programs: • Federal Programs $ 623,238 • State Projects $ 300,000 Auditee qualified as low-risk auditee? Yes X No 1202-1333029 180 Packet Page -1637- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Part H—Financial Statement Findings Section This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements for which Government Auditing Standards require reporting. No such matters were identified. Part HI—Federal Awards and State Projects Findings and Questioned Costs Section This section identifies the audit findings required to be reported by Circular A-133 section .510(a), Section 215.97, Florida Statutes, and Chapter 10.550, Rules of the Auditor General, State of Florida, such as material weaknesses, significant deficiencies, and material instances of noncompliance, including questioned costs, as well as any abuse findings involving federal awards or state projects that are material to a major program. Finding 2011-1 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 U.S. Department of Housing and Urban Development ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP) CFDA No. 14.257 Criteria Allowable Costs; Cash Management: In accordance with OMB Circular A-102 Common Rule, the County's methods and procedures for transferring funds should minimize the time elapsing between the transfer to the County of grant funds and when the disbursement was paid by the County. In addition, when awards are funded on a reimbursement basis, costs for which reimbursement was requested should be paid prior to the date of the reimbursement request. 1202-1333029 181 Packet Page -1638- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Condition/Context For the "Community Development Block Grants/Entitlement Grants (CDBG)"program and the "Community Development Block/Grant State's Program (DRI)", we noted several instances listed below where there was a significant time lag between when the County paid for disbursements and when the disbursement was requested for reimbursement. Date of Oldest Expenditure Paid by Amount of Date of Request County in Cash for Cash Cash Difference Grant Drawdown Drawdown Drawdown in Days NSP(CDBG) 1,052,304.06 6/2/201 I 1/31/2010 487 NSF (CDBG) 818,750.63 7/1/2011 6/24/2010 372 NSP (CDBG) 179,100.35 7/1/2011 7/8/2010 358 CDBG 233,839.26 2/24/2011 7/9/2010 230 CDBG 125,762.40 2/15/2011 9/28/2010 140 CDBG 319,009.64 2/15/2011 9/28/2010 140 CDBG 74,448.22 2/24/2011 4/24/2009 671 CDBG 55,000.00 2/15/2011 11/18/2010 89 CDBG 100,427.62 9/21/2011 4/28/2011 146 CDBG 103,474.00 9/23/2011 4/13/2011 163 DRI 40,741.48 3/3/2011 7/9/2010 237 Further for the CDBG grant program, we noted items were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services (HHVS) staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed for 24 homes, as observed during physical inspections of the NSF' properties by the Internal Audit Department of the Clerk of the Circuit Court. The bid line value for incomplete work ranged from $1,038 to $12,101 across all findings, and was not specific to one contractor. 1202-1333029 1 82 Packet Page-1639- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Also, upon Internal Audit's review of new air conditioning systems installed versus the bid specifications, it was noted that four systems did not conform to the bid requirements and one could not be verified. The systems in question required SEER and/or heat kilowatt ratings that were higher than the actual ratings of the systems installed by the contractors. The purpose of using certain minimum Energy Star and SEER ratings for A/C systems used in the rehabilitation process is to ensure the utility bills will remain affordable for the homeowner, as required by HUD grant guidelines. Other substitutions were also noted, for example: a sink base cabinet was not removed and replaced per specifications in order to save the granite counter top from being damaged. The project manager and contractor decided to install a new tub in one of the bathrooms as a substitute for the work not performed in the kitchen, but a change order was never completed; therefore,the substitution was not approved. In addition, Internal Audit noted in their investigation report that five homeowners received lawn care services for three months after their purchase of an NSP property with a value of $1,380. The Hl-IVS department found the error and requested the funds be reimbursed to the county for the services from each homeowner in letters dated February 4, 2011. To date, no funds have been reimbursed to the County from the homeowners; however, it was further noted that the contractor was never paid for these services by the County. During our compliance testing over the activities allowed or unallowed/allowable costs/costs principles attributes, we noted 10 expenditures that were for rehabilitation work for properties that were physically inspected by Internal Audit where the work was not completed or unapproved substitutions were made. Also, we noted per review of the details for the cash draw downs, that part of the request for reimbursement were for rehabilitation expenditures on properties that were investigated by Internal Audit and determined to have questioned costs associated with them for work that was paid for, but was not complete. Finally, for the"ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP)", we noted that for one drawdown request dated July 5, 2011, the drawdown request was made prior to the check date of the initial expenditure, which was July 6, 2011. As such, the funds were not expended prior to the drawdown request. 1202-1333029 183 Packet Page -1640- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Questioned Costs For the CDBG program, we noted total questioned costs of$158,559 Further, for the HPRP grant program, we noted total questioned costs of$16,370. Cause/Effect Drawdown or reimbursement requests were submitted to the grantor significantly past the time that the County paid for the qualifying expenditures. There is a lack of a process to minimize the time between disbursement and reimbursement request. In addition, drawdown or reimbursement requests were submitted to the grantor prior to the County incurring and paying for qualifying expenditures. This could result in reimbursement for unallowable or unsupported costs. Overall, these resulted in non-compliance with the cash management requirements of the grant programs. In addition, expenditures were paid by the County for rehabilitation work that was incomplete. Internal controls over rehabilitation activities and the related approval process were not designed or operating effectively. Signing statements saying that work is 100% complete when it is not could result in funds being dispersed and requested for reimbursement for work that is not completed. Recommendation The County should implement procedures that minimize the time elapsing between the request for a cash drawdown and the time that the disbursements are paid by the County and that the personnel administering the grant program comply with the County's established process, whereby qualifying expenditures are incurred and paid for prior to requesting reimbursement from the grantor. Also, the County should implement internal control procedures to inspect all work prior to authorizing any payment requests to ensure that contractors have completed all work according to the bid specifications. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation of the auditors. In light of continuing audit findings, internal audit review and other actions management was made aware of, the County replaced the prior Director in Housing, Human and Veteran Services (HHVS) with a top management team member in late August 2011 to restructure the entire HHVS Department and implement effective controls, processes and procedures. 1202-1333029 1 84 Packet Page-1641- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Realizing that this alone was not enough and wanting to effect changes throughout the entire organization, County Manager, Leo Ochs, submitted a grants reorganization plan to the Board of County Commissioners on January 30, 2012. In effect, all administrative grant compliance functions were centralized at the corporate level under the Office of Management and Budget (OMB). This centralization will allow the entire organization to benefit from the substantial grants accounting and compliance expertise that exist within that operation. While responsibilities for grant program management and service delivery will remain with the operating units, the key areas of grant compliance such as cash management, procurement, monitoring, reconciliation, and reporting will be centrally managed and monitored across the agency. OMB will implement this centralized grants management model in several phases over time. The immediate focus is bringing obvious noncompliant activities, such as identified in this Single Audit Report and prior years' reports back into adherence with grantor requirements. OMB staff will become fully imbedded in the Agency's day to day administrative grant functions and existing grants accountants serving under the Administrative Services Division will be reassigned to the OMB. These employees will be deployed in key operating units to implement consistent business processes and internal controls and carry out corrective actions. With specific reference to the CDBG-NSP program, on December 14, 2011, agenda item 10A the Board of County Commissioners approved a NSP strategy and associated implementation action plan presented by HHVS. The purpose of this process is to extract Collier County from the day-to-day operations of the NSP program by outsourcing the remaining homes to a local agency for continuance of the program by a qualified agent. On February 28, 2012, revised Action Plans will be submitted to the Board for approval and subsequent submittal to the U.S. Department of Housing and Urban Development. OMB internal controls will be developed to monitor that draws are completed on a timely basis, no less than quarterly with a documented review of the draw amount and backup to verify that checks have cleared prior to drawing federal funds, the draw amount reconciles to the general ledger, work has been completed with no outstanding concerns by the Clerk, and appropriate program income has been applied if applicable. The authorization form which verifies that work is 100% completed will include additional backup of photos to document the work as complete and a second attestation that the verification of work completed is true and accurate by support of photos. AWNIqk 1202-1333029 185 Packet Page-1642- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011-2 Federal Program Information U.S.Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 U.S. Department of Housing and Urban Development Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program(SHIP) CSFA No. 52.901 Criteria Reporting. For the "Community Development Block Grants/Entitlement Grants (CDBG)"program, per the NSP program regulations contained in the Federal Register, each grantee must submit a quarterly performance report, as HUD prescribes, no later than 30 days following the end of each quarter, beginning 30 days after the completion of the first full calendar quarter after grant award and continuing until the end of the 15th month after initial receipt of grant funds. In addition to this quarterly performance reporting, each grantee will report monthly on its NSP obligations and expenditures beginning 30 days after the end of the 15th month following receipt of funds, and continuing until reported total obligations are equal to or greater than the total NSP grant. After HUD has accepted a report from a grantee showing such obligation of funds, the monthly reporting requirement will end and quarterly reports will continue until all NSP funds (including program income) have been expended and those expenditures are included in a report to HUD. The compliance supplement requires that performance reports be complete and accurate. The County received Federal program funds as a subgrantee of the State under the "Community Development Block/Grant State's Program (DRI)". Per review of the State's reporting guidelines, the subgrantee is required to submit a monthly status report. The compliance supplement requires that performance reports are complete and accurate, which includes a requirement that amounts reported be in agreement with accounting records that support the audited financial statements and the SEFA. 1202-1333029 186 Packet Page-1643- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) For the "State Housing Initiatives Partnership Program (SHIP)", we noted the following reporting requirements: • In accordance with Section 420.9075(10), Florida Statutes, each county or eligible municipality shall submit to the Corporation by September 15 of each year a report of its affordable housing programs and accomplishments through June 30, immediately preceding submittal of the report. • Annual report for the Closeout Fiscal Year (2010/2011). • The local SHIP administrator's tracking system and annual reports must exactly match the information recorded in the local city or county's general ledger. • SHIP administrators, therefore, are required to regularly reconcile their tracking system with the local finance department's general ledger. They should meet with the director of their finance department to create a process that will ensure compliance with the single audit act. Condition/Context For the CDBG grant program, we selected quarterly reports for the NSP program to test and noted that the reports were submitted by the County and then rejected to be modified as the amounts reported did not agree to the County's general ledger, therefore,the reports could not be audited. We noted that for 6 of our testing selections for the DRI grant program, which were for months prior to July 2011, the monthly status reports were not reconciled to the general ledger and a reconciliation was not provided. Subsequent to July 2011 we noted that these reports were reconciled to the general ledger. Finally, for the SHIP grant program, the County received a letter from the Florida Housing Finance Corporation stating that the County was not in compliance with SHIP statutory guidelines as the Annual Report was not submitted by the deadline. Further, we obtained a copy of the Annual Report and noted that the financial information included in the report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures reported in the Annual Report. 1202-1333029 1 87 Packet Page-1644- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Questioned Costs N/A Cause/Effect The reports submitted were not subjected to a thorough supervisory review to ensure accuracy and completeness, including verification that amounts reported agreed to the accounting records or were appropriately reconciled, if necessary. This could result in incorrect and/or inconsistent information between the reports filed and the underlying financial records and indicates that the County may not be in compliance with the provisions of the grant programs. Further, the SHIP grant program Annual Report was not submitted by the deadline. Internal controls with respect to reporting were not operating effectively. Recommendation The County should implement internal control procedures that require that reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. In addition, procedures should be in place to ensure that the reports are submitted by the deadline. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. With specific reference to the SHIP program, under the direction of the newly placed Director in HHVS, one of our grant accountants worked closely with the SHIP Technical Advisor to complete, revise and re-submit annual reports for Fiscal Years 2006/2007, 2007/2008, and 2008/2009. These reports were presented to and approved by the Board of County Commissioners on February 14, 2012. HHVS will continue the use of the Technical Advisor as directed by HUD in conjunction with the Office of Management and Budget. With respect to the NSP program, all prior reports have been resubmitted and are awaiting review by the grantor agency. Overall, centralization of our key areas of grant compliance, internal controls, general ledger reconciliations and reporting will be implemented by the County through our newly revamped Grants Management Office under the Office of Management and Budget. See Finding 2011-1 for complete action plan. 1202-1333029 188 Packet Page-1645- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011-3 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 ARRA: Homelessness Prevention and Rapid Re-Housing Program (HPRP) CFDA No. 14.257 Criteria Subrecipient Monitoring: OMB Circular A-133 requires that the County maintain internal controls over subrecipients to ensure that subrecipient activities are monitored, audit findings are resolved, and the impact of any noncompliance on the County is evaluated. Additionally, the County should perform procedures to provide reasonable assurance that the subrecipient ,, obtained required audits and takes appropriate corrective action on audit findings. Condition/Context Per review of two subrecipient files under the CDBG grant program, we noted that the 2009 audits had been obtained that showed that both subrecipients had findings in their Single Audits, however, the County did not address management responses and corrective actions related to the audit findings and how they may impact the funding that the County subawards them under the grant program. In addition, we noted that other audits since the 2009 audits had either not been obtained or disclosed findings that were not appropriately addressed. For the HPRP grant program, the County was not obtaining and reviewing audits of subrecipients, although, the subrecipient stated that they had audited financial statements as part of their application for the grant subaward. Therefore, the County did not comply with the subrecipient monitoring requirements of OMB Circular A-I 33 and did not have proper internal controls in place over the process. Questioned Costs N/A 1202-1333029 189 Packet Page-1646- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Cause/Effect County personnel administering the grant program were not aware of the specific subrecipient monitoring requirements of OMB Circular A-133. Failure to perform proper monitoring activities can result in non-compliance with subrecipient monitoring requirements of OMB Circular A-133 and misuse/misappropriation of grant funding. Recommendation We recommend that the County implement internal control policies and procedures to ensure that proper monitoring of subrecipients occur on an on-going basis including the timely submission of audit reports and resolution of any audit findings. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. An internal control for subrecipient monitoring will be developed and implemented by OMB. This will include a master schedule of all subrecipients' fiscal year end dates to assess the appropriate times to request single audit reports. Collection of reports will be monitored by OMB through an electronic file system no less than quarterly to ensure subrecipient audit reports have been collected and reviewed. Reviews will be documented through the development of a review form completed by HHVS staff to assess the need for further action including any corrective actions plans and a timeline. The follow-up timeline will become part of the master subrecipient master schedule. Finding 2011-4 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Community Development Block/Grant State's Program (DRI) CFDA No. 14.228 1202-1333029 190 Packet Page-1647- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Special Tests and Provisions: When CDBG funds or CDBG-R funds are used for rehabilitation, the grantee must ensure that work is properly completed per 24 CFR section 570.506. Any NSP-assisted rehabilitation of a foreclosed-upon home or residential property shall be completed to the extent necessary to comply with applicable laws, codes and other requirements relating to housing safety, quality, or habitability, in order to sell, rent or redevelop such homes and properties. Condition/Context We noted for one of the properties in our testing, that there was no evidence that a pre- rehabilitation inspection was conducted describing the deficiencies to be corrected. Further we noted 11 additional properties in our testing, that were certified to be 100% complete by contractors, were requested for full payment in signed affidavits, and authorized for full payment by Housing, Human & Veteran Services staff, who certified on the disbursement authorization form that a site inspection was conducted and the work was 100% complete, without all work having been completed, as observed during physical inspections of the properties by the Internal Audit Department of the Clerk of the Circuit Court. Questioned Costs N/A Cause/Effect County personnel did not thoroughly inspect all work prior to authorizing any payment requests, therefore, did not have effective internal controls in place over this process Signing statements certifying that work is 100% complete without having performed a sufficient inspection could result in funds being dispersed and requested for reimbursement for work not performed. Recommendation The County should implement internal control procedures to inspect all work prior to authorizing any payment requests to ensure that contractors completed all work according to the bid specifications, contract specifications, and carried out the work in accordance with rehabilitation standards per 24 CFR section 570.506. Amok 1202-1333029 1 9 1 Packet Page -1648- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. This finding was brought to our attention during the review by our Internal Auditors. Management took immediate action and internal control procedures have been implemented within HHVS to address the payments to contractors. We believe future payments pertaining to the NSP program will be in compliance with special tests and provisions clauses. The primary procedural change is to require photos of the components of work being invoiced. The second signatory will utilize these photographs and proofs of inspections as evidence on every request for payment, and also, periodically, will perform unscheduled site inspections to further verify. Additionally, there will be another layer of oversight due to the centralization of grant compliance functions under the OMB. See Finding 2011-1 for full corrective action plan. Finding 2011-5 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Criteria Procurement, Suspension and Debarment: Verify that procurements provide full and open competition pursuant to the requirements of OMB Circular A-133. Condition/Context We noted one of our testing selections was part of a group bidding process for the rehabilitation of five homes where draft specifications were given to contractors for bidding, and then later revised after the bids were awarded to one contractor. These were titled "pencil bids" by the Housing Department Rehabilitation Specialist who later made revisions to bid specifications and allowed the winning contractor to adjust its line item pricing. It was further noted that the winning contractor increased certain line items within the bid even when the specifications on the final bid were unchanged from the first set. The bid totals for the jobs did not increase or decrease, only line items within the bid were changed. Further, this was also found by the 1202-1333029 192 Packet Page-1649- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Internal Audit Department of the Clerk of the Circuit Court in their investigation over 24 NSA properties owned by the County to rehabilitate as there were instances of invoices that were paid for work that was not complete(see finding 2011-2). Questioned Costs N/A Cause/Effect This process is considered to be in violation of the County's procurement policy and not in compliance with the procurement, suspension and debarment requirements of OMB Circular A-133 since all contractors were not given the opportunity to competitively bid on the same set of specifications. If all interested parties were given the opportunity to re-bid on the final specifications, the job(s) may have been awarded to a different contractor at a lower cost. Therefore, internal controls over the procurement, suspension, and debarment requirement were not operating effectively. Recommendation We recommend that the County implement proper internal controls to ensure that the bid process is competitive and fair to all interested parties by allowing them to bid on the same specifications as required by the County's procurement policy and OMB Circular A-133. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. This finding was brought to our attention during the review by our Internal Auditors. Management took immediate action and internal control procedures have been implemented within HHVS to address proper procurement procedures. Additionally, OMB and the County Purchasing Department has begun development of a coordination plan for all grant procurements which includes OMB review of all formal solicitations and further rollout of the Grants Requisition process to HHVS. The Grants Requisition process serves as an additional review by OMB staff versed in grant compliance against grants agreements to ensure any special grantor procurement requirements have been met. 1202-1333029 193 Packet Page -1650- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011-6 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Criteria Program Income and Cash Management: Revenue received by a state, unit of general local government, or subrecipient(as defined at 24 CFR 570.500(c)) that is directly generated from the use of CDBG funds (which term includes NSP grant funds) constitutes CDBG program income. To ensure consistency of treatment of such revenue, the definition of program income at 24 CFR 570.500(a) shall be applied to amounts received by states, units of general local government, and subrecipients. However, Section 2301(d)(4) imposes certain limitations and requirements that necessitate an alternative requirement to govern the use of program income generated by activities carried out pursuant to Section 2301(c). The limitations and requirements are based on the NSP activity that generated the program income and on the date the income is received. In addition, Section 2301(d)(4) requires any revenue from the sale, rental, redevelopment, rehabilitation or any other eligible use of NSP funds to be provided to and used by the state or unit of local general government. This includes revenue received by a private individual or other entity that is not a subrecipient. Program income received before July 30, 2013, may be retained by the state or unit of general local government if it is treated as additional CDBG funds and used in accordance with the requirements of Section 2301. Furthermore, as provided under 24 CFR 85.21 for entitlements, grantees and subrecipients shall disburse program income before requesting additional cash withdrawals from the U.S. Treasury. Condition/Context At the end of FY 2010 there was a total of $725,320.37 of program income that had not been considered and adjusted against future cash draws that was generated from NSP grant program activities. During FY 2011, we noted there were three NSP grant program cash drawdowns that occurred during FY 2011. Per review of the first draw, the date of the request for reimbursement was on June 2, 2011. Based on this date and review of the program income population for the NSP grant program, we noted additional program income received during FY 2011 as of 6/2/11 of$259,378.63, resulting in a total amount of program income (FY 20I0 & FY 2011) prior to this cash draw of $984,699.00. We noted per review of the cash drawdown details that the County only applied $725,315.86 of program income to the request as oppose to the whole 1202-1333029 194 Packet Page -1651- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) amount reflected in the general ledger of$984,699.00. Further,the last two cash draws related to the NSP grant program during FY 2011 were requested on July 1, 2011 and did not have any program income that was drawn against. Questioned Costs $259,378.63 Cause/Effect It appears that NSP program income not adjusted from (reduced) future cash draws. Internal controls with respect to program income were not operating effectively. Recommendation We recommend that the County implement procedures to verify that program income received is properly adjusted to future cash draw downs. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized project to date tracking protocols and forms will be implemented to support accurate general ledger reconciliations and application of program income prior to reimbursement (draw down) requests in a manner which supports a successful audit trail including proper backup that any grantor system failures are consistently documented and if possible acknowledged by the grantor agency. Finding 2011-7 State Program Information Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 Amok 1202-1333029 195 Packet Page -1652- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Matching: Per Florida Boating Improvement Program guidelines, applicants must furnish some form of non-cash match (in-kind service)to the project. Non-cash match may include the cost of administrative/contract management, engineering/construction management, labor, materials, and equipment provided through in-house resources of the Applicant. Applicants may not provide more than 5% of the total project cost for project administration and 10% of the total project cost for project engineering/construction management. Condition/Context We noted that there were in-kind contributions of$20,000 and $60,000 for administration and project management, respectively, included in the final submitted report for the FBIP grant program. However, we were unable to obtain evidence to substantiate the valuation and - calculation of the in-kind contributions. Questioned Costs $80,000 Cause/Effect The final report submitted was not adequately reviewed to ensure accuracy and completeness, including verification that in-kind contribution amounts reported were appropriately substantiated by accounting records. Internal controls with respect to matching were not operating effectively. Recommendation The County should implement internal control procedures that require that amounts included in final submitted reports be adequately substantiated and reconciled to the accounting records and reviewed and approved prior to being filed with the grantor. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. The Coastal Zone Management office is preparing a revised invoice for reimbursement and assistance will be provided to staff by our Grants Management Office to facilitate their understanding correct substantiation and reconciliation of accounting records prior to submission of the revised invoice. 1202-1333029 1 96 Packet Page-1653- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Specifically, OMB will implement the use of standard in-kind tracking forms and protocols (consistent with the payroll calendar schedule) for staff to document staff time used as in-kind. OMB will meet with CZM staff to develop roles and responsibilities as well as central electronic file location to monitor no less than quarterly that appropriate documentation is completed for staff time,materials and supplies. Finding 2011-8 Federal/State Program Information Federal Agencies/Program: U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 - Community Development Block Grant/State's Program (DRI) CFDA No. 14.228 • State Agencies/Programs: Florida Department of Elder Affairs Community Care for the Elderly(CCE) CSFA No. 65.010 Florida Housing Finance Corporation State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Aelik 1202-1333029 197 Packet Page-1654- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Criteria Allowable Costs: Compensation for personnel services rendered in connection with Federal awards must be documented and supported as described in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments (A-87). Additionally, pursuant to the SHIP Program Manual and the State of Florida's Part Four Compliance Supplement for the CCE program, administrative costs for the SHIP and CCE state programs should also be in conformance with A-87. According to A-87, the standards regarding time distribution are in addition to the payroll documentation and require the following: • Charges to Federal awards for salaries and wages, whether treated as direct or indirect costs, will be based on payrolls documented in accordance with the generally accepted practice of the governmental unit and approved by responsible official(s) of the governmental unit. • Where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on the program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. • Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation which meets the following standards (unless a statistical system or other substitute system has been approved by the cognizant Federal agency): a) must reflect an after-the-fact distribution of the actual activity of each employee, b) must account for the total activity for which each employee is compensated, c) must be prepared at least monthly and must coincide with one or more pay periods, and d) must be signed by the employee. e) Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards but may be used for interim accounting purposes. 1202-1333029 1 98 Packet Page-1655- 3/12/2013 16.D.4. Amok Collier County, Florida Schedule of Findings and Questioned Costs (continued) Condition/Context During our testing over payroll, we could not obtain sufficient evidence that the time allocated towards grant programs per time sheets was actual time the employee spent working on the grant programs. Questioned Costs Total salaries and related costs for the FY 2011 time period are summarized as follows: CDBG (CFDA No. 14.218) $ 577,627 DR1 (CFDA No. 14.228) $ 162,652 SHIP (CSFA NO. 52.901) $ 37,822 CCE(CSFA No. 65.010) $ 251,771 Cause/Effect Payroll allocations to grant programs were not supported by detailed time records. As such, these payroll costs are unsupported. This could result in reimbursement for unallowable or unsubstantiated costs. Recommendation We recommend that the County implement effective internal controls to ensure that actual time worked by an employee is charged to the grant programs. Views of Responsible Officials and Planned Corrective Action HHVS continues to follow the procedure for charging grants staff time via biweekly timesheets, signed by the employee and management, and reflecting actual time spent on the grants. However, it was determined by this finding that the procedures were not working as some of the staff were changing formulas within the spreadsheets and estimating their time. The department has implemented one spreadsheet that will be used by all staff members and the account strings will be verified by the accounting supervisor prior to forwarding to Human Resources for entry into SAP. Additionally, assistance will be provided by OMB via review of the current processes and procedures and the tools used by staff to perform their grant payroll reporting. Amok 1202-1333029 199 Packet Page-1656- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011-9 State Program Information Florida Fish and Wildlife Conservation Commission Florida Boating Improvement Program CSFA No. 77.006 Criteria Reporting: Per review of the State's reporting guidelines, the subgrantee is required to submit monthly progress reports from the award date of the grant until such time as the Contractor's Certification of Completion is signed by the contractor and submitted to the Florida Fish and Wildlife Conservation Commission. The compliance supplement requires that performance reports are complete and accurate, which includes a requirement that amounts reported be in agreement with accounting records that support the audited financial statements and the SEFA. Condition/Context We noted during our review and testing of the final invoice that the Contractor's Certification of Completion, which was signed by the contractor, was submitted to the Florida Fish and Wildlife Conservation Commission on November 9, 2011, however, no progress reports were submitted after January 2011, during which month construction was completed. As such, no monthly progress reports were submitted for approximately 10 months. Questioned Costs N/A Cause/Effect Failure to submit the required monthly progress reports resulted in non-compliance with the reporting requirements of the grant program. Internal controls with respect to reporting were not operating effectively. 1202-1333029 200 Packet Page -1657- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Recommendation The County should establish policies and procedures necessary to ensure that all required reports are prepared and filed in a timely manner including developing a checklist of required reports and due dates. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. A centralized electronic file system will be put into place that will serve as a monitoring tool by OMB staff. A master report schedule will outline all reporting requirements by grantor program and grant contract. Reminders will be sent to CZM staff to draft required reports. Standard protocol will implement that all reports receive a documented review by OMB staff prior to submission to the grantor agency. This internal control will serve to ensure reports are filed timely and that the audit trail includes a copy of the final submission and documented review. Finding 2011-10 Federal Program Information Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Criteria Allowable Costs: Compensation for personnel services rendered in connection with Federal awards must be documented and supported as described in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments(A-87). Condition/Context We noted upon review of payroll timecards from the Parks and Recreation Department, the County Clerk's Finance Department identified and investigated an error noted in the computation and data entry of overtime hours worked by Summer Food Program personnel. We note that the fiscal technician that was inputting the time for the Summer Food Program was responsible for entering the hours worked by each employee. The fiscal technician would enter and approve in the SAP general ledger system for payroll processing and payment, the data provided by the manual time card signed by the employee and supervisor of the program. The fiscal technician, 1202-1333029 201 Packet Page -1658- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) when entering overtime hours into the system,multiplied all overtime hours by 1.5, as they were unaware that the County's payroll system automatically calculated the increase in rate for hours classified as overtime hours. Additionally, we noted that an overpayment for the time resulted in additional employer taxes and Florida Retirement System contributions, as these expenditures are calculated as a percentage of total pay. Questioned Costs $8,517 Cause/Effect The cause is due to a clerical error going undetected due to the lack of effective supervisory oversight, which resulted in overcharge of payroll costs to the program. As such, unallowable costs were charged to the grant program. In addition, permissions for both entering data and approving time in the SAP system was granted to this employee. Recommendation We recommend an additional level of review, to compare the hours per the manual timecards to the timekeeper's entry into the system, and that the timekeeper's access to the payroll module should not also include approval of time entry. We also recommend proper training of payroll personnel. Views of Responsible Officials and Planned Corrective Action Management concurs with this recommendation. The Human Resource Department (HR) has implemented additional training to staff entering payroll and supervisors. The content of the first session included review of federal laws (Fair Labor Standards Act), Compensation CMA, Leaves of Absence CMA, deadlines, best practices, productive vs. non-productive time, holidays, compensatory time and overtime. In addition to the training,HR has reviewed all time entries for the Summer Food Program and is working with the Clerk of Court to resolve the overpayments. 1202-1333029 202 Packet Page-1659- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Finding 2011-11 Federal Program Information Florida Department of Education Summer Food Service Program for Children CFDA No. 10.559 Criteria Cash Management: In accordance with 0M13 Circular A-102 Common Rule, the related expenditures should be in compliance with the applicable funding techniques as described in the agreement and when awards are funded on a reimbursement basis, the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Condition/Context We note that the meals served on a daily basis are tracked manually at each meal site, and the manual tracking sheets are sent to the Parks & Recreation Administration Office. Personnel at the office enter the manual data into an excel spreadsheet, which is then used to summarize the total meals served and to prepare the cash drawdown requests. We obtained the excel tracking spreadsheet for the month of June 2011, and while clerically testing it, we noted that the total number of meals served, plus the total number of meals left over, was more than the total number of meals delivered for the Naples locations. Additionally, we noted that the total number of meals left over for both locations were not equal to the total number of meals delivered during the period, less the number of meals served. As such, we were unable to determine whether the excel tracking spreadsheet appropriately reflected the number of meals delivered or the number of meals served. Further, we were unable to obtain sufficient evidence to verify the number of meals served and reported, and therefore reimbursed, during July 2011 and August 2011. Questioned Costs Unable to determine. Cause/Effect Drawdown or reimbursement requests were submitted to the grantor that could not be fully substantiated with evidence that they were qualifying paid expenditures. This could result in reimbursement for unsubstantiated meals served. 1202.1333029 203 Packet Page-1660- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Recommendation We recommend that the personnel administering the grant program implement procedures to ensure that reimbursement requests are supported by actual meals served. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendation. Deficiencies in the operation of this program were brought to our attention during the summer of 2011. Management took immediate action and implemented a very detailed corrective action plan. A summation of the plan is as follows: 1. Staff has been re-trained to ensure that an understanding of the requirements of the program and delivery of these requirements to participants are carried out in accordance with United States Department of Agriculture Summer food Service Program guidelines without exception. Subsequent training will be held routinely. 2. As mentioned previously, staff are assigned to count the amount of food coming back to correspond with the POS forms for left-over meals. 3. All meals will contain the required elements for lunch and breakfast and no other foods will be substituted or added. 4. Current program manager was removed immediately and his responsibilities were reassigned to his supervisor. 5. The supervisor will be the contact person for all future contacts between the Parks and Recreation Department and representatives of the Florida Department of Education and the Director of Collier County Parks and Recreation will be added to all future communications between the Collier County Parks and Recreation Department and the Florida Department of Education. 1202-1333029 204 Packet Page-1661- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings For the Year Ended September 30, 2011 The current status of findings reported for the years ended September 30, 2010 and 2009 related to major federal programs and state projects is as follows: Finding 2010-1 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Compliance Requirement: Reporting Condition/Context The financial information included in the submitted Annual Report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures and program income reported in the Annual Report. Recommendation The County should implement procedures that require that the statutory reports be reconciled to the general ledger and reviewed and approved prior to being filed with the State. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendations of the auditors. On July 1, 2010, Collier County entered into a contract with the Florida Housing Coalition, the technical assistance provider for Florida Housing Finance Corporation. The purpose was to receive assistance in reconciling the annual reports to the general ledger and establishing best practices to capture, reconcile, and report data. 1202-1333029 205 Packet Page-1662- 3/12/2013 16.D.4. Collier County, Florida Schedule of Findings and Questioned Costs (continued) Current Status The previously submitted Annual Reports for 06/07 07/08 and 08/09 were voided and have been revised and resubmitted with the assistance of the Florida Housing Corporation's Technical Advisor. The Technical Advisor determined that the historical practice of maintaining separate projects in our accounting system created problems when attempting to reclassify expenditures to a previous period. She suggested we no longer attempt to reconcile to SAP, but rather use the SHIP tracking forms as the basis for recording the date of SHIP transactions and SAP to support that the expenditures occurred. Consequently, HHVS staff is in the process of creating "bridge" reports to tie the information provided in the Annual Reports to SAP. These bridge reports would be analogous with a request for reclassifications, showing where expenditures currently reside in SAP and where they are in the Annual Report. SHIP funding for 11/12 will be placed in a new fund/project and maintained for the duration of the SHIP program. Staff is reviewing various options for maintaining and tracking future SHIP funds to ensure the integrity of the data in SAP and to make reconciliations to the SHIP tracking forms possible and help ensure the integrity of Annual Reports. As of February I, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide and will serve to assist in proper reconciliation and tracking of SHIP funding. 1202-1333029 206 Packet Page-1663- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010-2 Federal Program Information U.S. Department of the Interior Payments in Lieu of Taxes (PILT) CFDA No. 15.226 Compliance Requirement: Reporting Condition/Context The County was not aware of the requirement noted in (d) above and did not certify to the Department that it had made an appropriate distribution of the funds within 120 days of receiving payments. _ Recommendation The County should implement procedures to identify all types of reporting requirements indicated in the federal regulations and to ensure all such reports or certifications are submitted as required and on a timely basis. Views of Responsible Officials and Planned Corrective Action The Clerk's Department of Finance and Accounting (Finance) determined that this program was considered a Federal grant in July 2010. At that time, Finance contacted the Department of Interior and was told that there were no reporting requirements for this program. All funds were properly distributed. Upon reviewing CFR 44.5(d) with the auditors, it was determined that a certification confirming the appropriate distribution of funds was required. The confirmation was sent and this requirement had been added to the PILT procedures for future years. Current Status The procedures for processing the PILT receipt and subsequent distributions have been updated. All funds were properly distributed. The certification confirming the appropriate distribution of funds was submitted to the Department of the Interior as required. oak 1202-1333029 207 Packet Page -1664- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010-3 Federal Program Information U.S. Department of Homeland Security Disaster Grants—Public Assistance(Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Procurement, Suspension and Debarment Condition/Context We selected the largest vendor included in the population which comprised the majority of the expenditures incurred under the Federal program for testing. The expenditures were incurred during prior years although the Federal reimbursement was sought and received in the current year. We noted no documentation evidencing that the County had checked the EPLS, and a certification from the vendor was not collected or clause or condition included in the contract. We noted that the County's current policy it to document the EPLS check; however, as this vendor contract pertained to prior years, there was no documentation of the EPLS check being performed.• Recommendation The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the Federal requirements. 1202-1333029 208 Packet Page -1665- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Views of Responsible Officials and Planned Corrective Action Management concurs with and has successfully implemented the procedure of performing EPLS checks on all vendors associated with grant activities. This contract was procured in July of 2005, prior to any damage done to Naples beaches and initial submission to FEMA for reimbursement. This contract bid process was intended for payment under non-grant revenue sources and accordingly, our procurement procedures do not require debarment checks for non- grant related vendors. The bid process did include the following language with regards to Public Entity Crimes: "By its submitting a Bid, Bidder acknowledges and agrees to and represents it is in compliance with the terms of Section 287.133(2)(a) of the Florida Statutes." Said statute prohibits a vendor from bidding on a contract when they have been convicted of a public entity crime. An after-the-fact EPLS check was performed on this vendor for the period of January 1, 2005 through and including September 30, 2010 and was found to be in good standing.At the time the County submits their second request for scope change with FEMA regarding the increased beach , costs,all vendors submitted for reimbursement will be checked after-the-fact. Current Status The County continues to educate staff on EPLS checks as well as other grant procurement procedures to ensure compliance. On this particular item, EPLS checks were performed on all vendors associated with the grant. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Additional controls will be implemented during FY 2012 including a grants requisition system that will allow grants compliance staff to verify an EPLS check has been completed prior to execution of a purchase orders against a contract funded with federal or state funds. In addition, grants compliance staff in coordination with Purchasing will review grant related procurements at several control points. Prior to advertisement to review procurement packages for required grantor provisional language, at the time of Board approval by way of the SIRE agenda system, and again at the time of purchase order execution. Amok 1202-1333029 209 • Packet Page -1666- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010-4 Federal Program Information U.S.Department of Homeland Security Disaster Grants—Public Assistance (Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Reporting Condition/Context For one of the two quarterly reports selected for testing on a large project we noted amounts were not reported accurately for the anticipated final amount and the amount expended to date. The accounting records reflected a total amount of $12.9 million whereas the report reflected $3.1 million. Further, we selected the next quarterly report and noted that the amounts reported were the same and had not been updated to reflect the actual activity based on the County's accounting records. Recommendation We recommend that all reports submitted to grantor agencies be subjected to a thorough supervisory review for accuracy and completeness prior to submission. Views of Responsible Officials and Planned Corrective Action The Florida Public Assistance quarterly reporting is done electronically without any intermittent check points for review. Management will work around this by having staff create a spreadsheet prior to quarterly reporting submission and submit to Management for approval. Staff inquired about submitting revised quarterly reports for the periods in question and was advised that there are no options for doing this within the system. Current Status Staff generates a spreadsheet from the Florida Public Assistance system quarterly and it is reviewed and approved by Management prior to submission in the actual Florida Public Assistance portal. Additionally, staff monitoring each of the on-going projects is responsible for reporting the amounts to the employees who perform the report preparation and submission. 1202-1333029 210 Packet Page-1667- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2010-5 Federal Program Information U.S.Department of Homeland Security Disaster Grants—Public Assistance(Presidentially Declared Disasters) CFDA No. 97.036 Compliance Requirement: Allowable Activities/Costs Condition/Context The large project PW that was finalized during fiscal year 2010 and which set forth the allowable activities and costs for the project included approximately$10.5 million for costs associated with one vendor and $2.2 million related to various other vendor related costs. The County was reimbursed under the Federal program for the full amount of the approved PW (approximately million was collected in prior years and approximately $9.7 million was collected during fiscal year 2010). For the other vendors included in the PW totaling $2.2 million, we selected three of the Iargest vendors to test covering over 60%of the other vendor total amount. We noted that for one of the vendors selected,the amount billed by the vendor and paid by the County was less than the amount in the PW by $27,997, which at the Federal reimbursable share per the PW of 55%equates to $15,398. Recommendation We recommend that the County implement procedures to ensure that amounts reimbursed are based upon actual expenditures incurred. Views of Responsible Officials and Planned Corrective Action As discussed in previous meetings, this Project Worksheet 2700 (PW) was the scope change and Collier County was allowed a much larger reimbursement for the damages done to Collier County Beaches. This is an on-going process and involves three Named Events (Tropical Storm Gabrielle on 9/12/2001; Hurricane Katrina on 8/29/2005; and Hurricane Wilma on 10/24/2005). At 9/30/2010, Collier County was half-way through this process. Amok 1202-1333029 211 Packet Page -1668- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) The invoice selected for testing on this project was incorrectly referenced in the written discussion on PW 2700 by State personnel at $682,000, the PO amount. There is a spreadsheet that FEMA, State personnel and Collier personnel are working with for the entire $33.9 million dollar scope change. The actual invoice amount of$654,002.73 is included on the spreadsheet. Current Status As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized report submission forms and protocols will be implemented to support segregation of duties as well as accurate reporting to ensure the general ledger reconciles to any financial activity within the report prior to submission. Finding 2010-6 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Compliance Requirement: Program Income Condition/Context We noted a total of approximately $732,000 of program income generated during fiscal year 2010 under the Neighborhood Stabilization Program (NSP)which is part of the CDBG program. Per review of the general ledger expenditure detail provided, we noted that the program income had been applied against specific program expenditures in determining the net amount of program expenditures reported in the SEFA. From the detail of program income provided, we selected a sample of specific program income transactions for testing and the first selection of approximately$66,000 was recorded in May 2010. The remaining five selections included in our sample were recorded during September 2010. There were no NSP program cash draws made subsequent to the receipt of the program income recorded in September 2010. We attempted to ascertain whether the amounts received as program income in May 2010 were properly offset against program expenditures in determining the amount of federal funds drawn for the next draw request occurring subsequent to the date the program income was received in order to satisfy the requirement that program income is used before requesting additional cash draws. However, we were informed that the May 2010 program income of $66,000 had not been deducting in subsequent cash draw requests made during fiscal year 2010. 1202-1333029 212 Packet Page-1669- 3/12/2013 16.D.4. Asak Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation We recommend that the County implement procedures to verify that program income received is properly offset against expenditures incurred when making draw requests under the federal program. Views of Responsible Officials and Planned Corrective Action Collier County concurs with the recommendation. Prior to making a request to draw new funds under NSP, County fiscal staff will submit evidence to the program administrator that all program income received will be, or has been, offset against expenditures. This requirement will apply regardless of what NSP activity generated the program income or what activity Collier County seeks to draw down against available program funds. Current Status - As determined by the auditors in Finding 2011-6, Collier County was still incorrectly drawing , program income. As of February 1, 2012 the Office of Management and Budget has been expanded to oversee grants compliance countywide. Standardized project to date tracking protocols and forms will be implemented to support accurate general ledger reconciliations and application of program income prior to reimbursement (draw down) requests in a manner which supports a successful audit trail. Finding 2010-7 Federal Program Information U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants (CDBG) CFDA No. 14.218 Compliance Requirement: Reporting Condition/Context We selected two quarterly reports for the NSP program to test and noted that amounts reported for expenditures did not agree to the County's general ledger and a reconciliation was not provided. 1202-1333029 213 Packet Page -1670- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation The County should implement procedures that require that the NSP reports be reconciled to the general ledger and reviewed and approved prior to being filed with the grantor. Views of Responsible Officials and Planned Corrective Action Collier County concurs with the recommendation. Program staff will ensure expenditures and program income have been reconciled to the general ledger. This item has been corrected and appropriate controls and procedures have been implemented to reconcile to the general ledger before submitting future Quarterly Performance Reports (QPR) to the grantor agency. Furthermore, future reports will be approved by the program administrator and appropriate documentation will be maintained prior to being filed with the grantor agency. Current Status Collier County received authorization from HUD to modify and correct past reports. To do so, HUD rejected all previously submitted QPRs on October 25, 2011. HHVS staff has completed modification of the six rejected QPRs from 2009 and 2010 and prepared and submitted the four QPRs for 2011. All QPRs will be reviewed and approved by a grants accountant and supervisor prior to the reports being submitted to the grantor. Also, see action plan submitted in finding 2011-1. Finding 2009-1 Federal/State Program Information Federal Agencies/Programs: U.S. Department of Housing and Urban Development(HUD) Home Investment Partnerships Program(HOME)—CFDA No. 14.239 Community Development Block Program(CDBG)—CFDA No. 14.218 U.S. Department of Health and Human Services Aging Cluster(AC)—CFDA No.'s 93.044, 93.045, 93.053, 93.705, 93.707 1202-1333029 214 Packet Page -1671- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) State Agencies/Programs: Florida Department of Elder Affairs Community Care for the Elderly(CCE)—CSFA No. 65.010 Florida Housing Finance Corporation State Housing Initiatives Partnership Program(SHIP) —CSFA No. 52.901 Compliance Requirement: Allowable Costs Condition/Context We noted that from the beginning of the fiscal year through January 2009, the County's documentation supporting payroll allocations for employees that work on multiple grants did not meet federal standards as described in OMB Circular A-87 above. The County has used a Personnel Activity Report (PAR) to allocate payroll salaries for employees who work on multiple activities. These reports are prepared annually, at the beginning of each fiscal year, based on an estimate of the time the employees are expected to work on a grant. The PAR does not show the total activity for which an employee is compensated and does not require the employee's signature. The County's Department of Housing and Human Services initiated a timesheet process in fiscal year 2006 whereby employees in the department indicate the projects to which their time relates each week. These timesheets are signed by the employees and supervisors and kept in the department for internal control purposes. For the first part of fiscal year 2009, these timesheets were not provided to the County's payroll department to adjust the allocation of payroll costs from the estimate as indicated in the annual PAR form to actual time spent. Thus, there is not an "after the fact" accounting based on actual activity. We noted that the HOME program had no payroll expenditures charged to the program during the period noted above (although there should have been), and therefore, no question costs have been reported for this program. The payroll charges related to the HOME program were instead charged to other housing programs as a result of the lack of an after the fact accounting for the period noted above. 1202-1333029 215 Packet Page -1672- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Recommendation The County should ensure that an effective and consistent process is in place to record payroll charges to grant programs throughout the entire fiscal year. The process should entail providing the timesheets to the payroll department on a periodic basis to match the related payroll allocated to each grant (as based on the PAR), to the actual time spent working on the federal/state grant based on the after-the-fact timesheet, and any adjustments necessary to true-up the estimated payroll charged to the grant (based on the PAR) to the actual amount (based on the timesheets) should be made. Alternatively, the payroll department could charge payroll costs to the grants based on actual timesheets submitted weekly as opposed to using the budgeted PAR percentage as the basis for allocating costs each pay period. PAR reports should be signed by the employee and completed at least semi-annually for those employees who work solely on one grant. Views of Responsible Officials and Planned Corrective Action The finding in question occurred during the 1st quarter of FY09. The time was tracked correctly; however, a manual step was missed. Effective January 17, 2009, the Human Resources Department began processing bi-weekly time and effort entries for all Housing and Human Services grant staff. Staff submits timesheets that are signed by the employee and management to fiscal staff for review. The timesheets are forwarded to Human Resources to enter the actual percentage of time and effort into SAP prior to payroll expenses actually posting to SAP. This allows for "real time" charges directly to the appropriate grant in SAP, thereby eliminating the need to process journal entries at all. Current Status HHVS continues to follow the procedure for charging grants staff time via biweekly timesheets, signed by the employee and management, and reflecting actual time spent on the grants. However, it was determined by finding 2011-8 that the procedures were not working as some of the staff were changing formulas within the spreadsheets and estimating their time. The department has implemented one spreadsheet that will be used by all staff members and the account strings will be verified by the accounting supervisor prior to forwarding to Human Resources for entry into SAP. 1202-1333029 216 Packet Page-1673- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2009-2 Federal Program Information Federal Agency/Program: U.S. Department of Housing and Urban Development(HUD): Community Development Block Grant/ State's Program (DRI)—CFDA No. 14.228 U.S. Department of Agriculture: Summer Food Service Program for Children— CFDA No. 10.559 U.S. Department of Justice: Public Safety Partnership and Community Policing Grants—CFDA No. 16.710 U.S. Department of Homeland Security: Homeland Security Cluster—CFDA No. 97.004, 97.067 U.S. Department of Transportation: Airport Improvement Program—CFDA No. 20.106 Compliance Requirement: Procurement, Suspension and Debarment Condition/Context Although the County indicated that its practice is to check the EPLS system, no documentation evidencing that it had checked the EPLS was maintained, and a certification from the entity was not collected or clause or condition included in the agreements, as applicable, for certain sample transactions selected for testing. Recommendation The County should perform the required verification by checking the EPLS (and documenting evidence of the verification, when it was performed and by whom), collecting a certification from the entity, or adding a clause or condition to the contract with that entity in accordance with the Federal requirements. Views of Responsible Officials and Planned Corrective Action Collier County will apply currently enacted controls and measures operating effectively in one division agency-wide to ensure compliance. 1202-1 333029 217 Packet Page -1674- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) The Grants Coordinator for the Collier County Sheriff's Office will be responsible for checking EPLS and documenting the verification as recommended above for all Sheriff's grants with this requirement. Current Status HHVS staff is responsible for ensuring all sub recipients, vendors and contractors are not debarred by checking the EPLS web site and printing a copy of the screen indicating that the party is not on file. Said screen prints proving verification and are included in the file. The Fiscal Technician for Parks and Recreation working with the Food Grant staff checks that EPLS documentation is present and includes it in file for corresponding purchase orders and invoices. The Collier County Department of Emergency Management's Sr. Administrative Assistant checks the EPLS website,prints out the verification, and places it in the project files. Airport Authority personnel check the EPLS web site (https://www.epls.gov/epls/search.do) and print documentation as verification for each vendor. This documentation is initialed, scanned and attached to the requisition electronically within the county's accounting system. The Grants Coordinator for the Collier County Sheriffs Office checks EPLS and documents the verification as required for all Sheriff's grants. Finding 2009-3 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 Criteria: Reporting Condition/Context The financial information included in the submitted Annual Report was not reconciled to the County's general ledger. Accordingly, we were unable to validate the amount of expenditures and program income reported in the Annual Report. 1202-1333029 218 Packet Page-1675- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Additionally, we noted approximately $192,000 of reversal entries appearing in the detail we were provided of SHIP projects completed during fiscal year 2009 and we were informed that these credits represented prior period corrections dating back as far as 2003. Recommendation The County should implement procedures that require that the statutory reports be reconciled to the general ledger and reviewed and approved prior to being filed with the State. Additionally, should corrections to prior period expenditures be necessary, a process should be in place to ensure that such items are identified and captured on a timely basis. Views of Responsible Officials and Planned Corrective Action Management concurs with the recommendations. Recognizing that internal attempts at completing this difficult reconciliation have fallen short of the requirement, Housing and Human Aft Services has budgeted SHIP grant funds to receive onsite and offsite technical assistance (TA) from the Florida Housing Coalition (FRC). FHC is the technical advisor designated by the grantor agency, Florida Housing Finance Corporation. The TA will consist of reviewing current reconciliation procedures, reports and data collection and maintenance. Any suggested improvements will be implemented. As of this writing, the contract for TA is being review by Housing and Human Services and the County Attorney's Office for form and legal sufficiency. Current Status HHVS staff and one of the grants accountants have worked closely with the SHIP technical advisor to complete and resubmit Annual Reports for Fiscal Years 2006/2007, 2007/2008, and 2008/2009. See Current Status for Finding 2010-1 above. Finding 2009-4 State Program Information Florida Housing Finance Corporation (the Corporation) State Housing Initiatives Partnership Program (SHIP) CSFA No. 52.901 1202-1333029 219 Packet Page-1676- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Criteria: Special Tests and Provisions Condition/Context No advertisement was made for fiscal year 2009. Recommendation The County should adhere to the established SHIP rules with respect to advertising SHIP funds. Views of Responsible Officials and Planned Corrective Action The County will adhere to the established SHIP rules. Current Status Collier County received $431,868 in SHIP Funding for fiscal year 2009/10; however, it was not advertised for the following reasons: 1. The funds were required to be used exclusively for loans of not more than $8,000 to provide purchase assistance to applicants eligible to receive the federal first-time homebuyer tax credit created through the American Recovery and Reinvestment Act of 2009 for the first year of funding; 2. The loans were intended to front the applicants the tax credit and were intended to be paid back once the tax credit was received by the applicant; HHVS staff determined that recapturing these funds would be difficult and would put the County at risk of non- compliance if funds were not repaid; 3. SHIP guidelines allowed these funds to be used for all approved strategies once the tax credit program expired, and assuming all loans were recaptured for the remaining two years of the grant; 4. Since Collier County was already providing purchase assistance through SHIP in excess of $8,000 per applicant, it was determined that another purchase assistance program would be redundant, and coupled with the inability to guarantee recapturing the funds from tax credit rebates, staff decided to leave the grant in the Trust Fund unused for FY 2009/10; 1202-1333029 220 Packet Page-1677- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) 5. Since the funds would not be used for FY 2009/10 (no applications would be taken for assistance), there were no new funds to advertise for this period; therefore, per the SHIP Program Manual rules, no advertisement was published. Finding 2009-5 State Program Information Florida Department of Transportation (FDOT) State Infrastructure Bank (SIB) Loan Program CSFA No. 55.020 Criteria: Reporting Condition/Context The State compliance supplement for this program and the loan agreement require the submission to FDOT of semi-annual progress reports on program and financial activities that occur each year following the award. We noted that reports for December 2008 and June 2009 were not completed or submitted to the FDOT until the time of our testing(September 2009). Recommendation The County should review agreements for reporting requirements and if questions arise as to party responsible for completion, the County should promptly seek written clarification from the grantor agency. Also, the County should ensure that reports are reviewed for accuracy and completeness by someone other than the preparer. Views of Responsible Officials and Planned Corrective Action Originally the SIB agreement was for road construction considered to be a local Collier County project. After the SIB agreement was executed, Federal Highway Administration (FHWA) determined that the project would become a state project due to the procurement for a Design Build Finance of I-75 (IROX). Collier's original local project became part of larger state IROX project. ratik 1202-1333029 221 Packet Page -1678- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) The Grants Coordinator made a verbal inquiry to Florida Department of Transportation (FDOT) during calendar year 2008 regarding the reporting requirements cited in the SIB agreement and was advised the report was not Collier's responsibility since the project was not let by Collier nor would any portion of the project be managed by Collier as originally anticipated. Subsequently, a report was requested by FDOT for only the most recent six month period. Collier explained to FDOT that if the report was now required, all reports due during the fiscal year 2009 would need to be drafted and submitted as due diligence. All reports submitted were reviewed by the Transportation Administrator though not formally documented as such. Subsequent report reviews by the Transportation Administrator are documented before submission. Collier has no access to FDOT's financial activity or financial system which is needed to complete the report, nor does Collier receive any project status reports on a routine basis. Collier only has access to the data on the amount of loan payback which Collier disburses. This loan payment information can be populated by FDOT as well. Collier must request financial activity and project status information proactively. Requests for data from the grantor on prior year single audit reporting and CAFR data such as loan amortization schedules and project statuses to capture asset valuation has proven to be cumbersome and difficult. Future financial activity requests will be made within 10 business days after the semi-annual report period end to FDOT in order to verify and obtain correct data by the submission date. The Division will prepare the report based on the information provided by FDOT. Prior to submission,the Transportation Administrator will perform a documented review. Current Status The Growth Management Division (formerly Transportation Division) continues to follow the corrective action plan as outlined above. The Acting Grants Accountant continues to draft the SIB report on a biannual basis as required. The report is first submitted for review and approval to the Division Administrator prior to final submission to FDOT by the required deadline. Written procedures are in place to support any staff changes. Staff deems the internal controls put in place have proven successful to resolve the audit concern. 1202-1333029 222 Packet Page -1679- 3/12/2013 16.D.4. Collier County, Florida Schedule of Prior Audit Findings (continued) Finding 2009-6 Federal Program Information Federal Agency/Program: U.S. Department of Transportation: Airport Improvement Program—CFDA No. 20.106 Criteria: Davis-Bacon Act Condition/Context We noted a project during fiscal year 2009 that was subject to the Davis-Bacon requirements. We noted that the required prevailing wage clauses were not included in the contract and the weekly certified payrolls had not been submitted as required. We were informed that the County planned to obtain the certified payrolls upon project completion; however, the requirements dictate that weekly certified payrolls are to be submitted during the course of the project. Recommendation The County should ensure that the required prevailing wage clauses are included in all contracts subject to the Davis-Bacon Act and that the required weekly certified payrolls are obtained. Views of Responsible Officials and Planned Corrective Action In order to rectify this deficiency Airport Authority personnel will review payroll submittals and provide documentation to assure compliance with the Davis-Bacon Act. Additionally personnel will work with any consultants and purchasing to include proper language in bids and contracts. In addition our procedure manual will be updated. Current Status The proper contract language regarding Davis-Bacon is included in bids and contracts. The Airport Authority performs an examination, determination and documentation by noting on each payroll statement that the wages paid by the contractor have been reviewed and that they are/are not in compliance. A log is maintained for the payroll submitted each week by the vendors to document compliance. Amok 1202-1333029 223 Packet Page -1680- 3/12/2013 16.D.4. It 1 JlIHhh1WhhuH t ! ERNST&YOUNG Ernst500oungLLP j 5100 Town Center Circle Boca Raton,Florida 33486 Tel: +1 561 955 8000 Fax:+1 561 955 8200 www.ey.com Management Letter and State Reporting Requirements Members of the Board of County Commissioners Collier County, Florida: We have audited the financial statements of the governmental activities,the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Collier County, Florida as of and for the year ended September 30, 2011, which collectively comprise Collier County, Florida's basic financial statements and have issued our report thereon dated February 29,2012. 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 OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. We have issued our Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government-Auditing Standards, Report of Independent Certified Public Accountants on Compliance with Requirements That Could Have a-Direct and Material Effect on each Major Federal Program and State Project and on Internal Control over Compliance in Accordance with OMB Circular A-133, Section 215.97, Florida Statutes and Chapter 10.550, Rules of the Auditor General,and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule,which are dated February 29, 2012,. should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. We have the following suggestions for improvement in accounting procedures and controls. 1202-1334456 A member km of Ernst R Young Global Limited Packet Page-1681- 3/12/2013 16.D.4. I Single Audit Related ML Comments 2011-1 Grant Compliance Observation During our testing of the County's various federal and state grant programs, we noted non- compliance over the management of several grant programs in the following areas: ► Payroll allocation and processing errors ► Subrecipient documentation and monitoring ► Eligibility ► Treatment of change orders ► General reporting • ARRA Section 1512 reporting Auk ► Period of availability Recommendation We recommend enhanced training of employees in grant compliance and more thorough supervisory review of grant transactions, documentation and reporting. We also recommend the County consider implementing a central grant management or grant compliance office of individuals to more effectively monitor grant compliance. Management's response Management concurs with the recommendation of the auditors. In light of continuing audit findings, internal audit review and other actions management was made aware of,the County replaced the prior Director in Housing, Human and Veteran Services (HHVS) with a top management team member in late August 2011 to restructure the entire HHVS Department and implement effective controls, processes and procedures, I202-1334456 2 A member firm of Ernst 3 Ywmq Global Limited Packet Page-1682- 3/12/2013 16.D.4. ,,.,,, 111 I1111111111W 1j3 cl LRNST&YOUNG Realizing that this alone was not enough and wanting to effect changes throughout the entire organization, County Manager,Leo Ochs, submitted a grants reorganization plan to the Board of County Commissioners on January 30, 2012. In effect, all administrative grant compliance functions were centralized at the corporate level under the Office of Management and Budget (OMB). This centralization will allow the entire organization to benefit from the substantial grants accounting and compliance expertise that exist within that operation. While responsibilities for grant program management and service delivery will remain with the operating units,the key areas of grant compliance such as cash management,procurement, monitoring, reconciliation, and reporting will be centrally managed and monitored across the agency. OMB will implement this centralized grants management model in several phases over time. The immediate focus is bringing obvious noncompliant activities, such as identified in this Single Audit Report and prior years' reports, back into adherence with grantor requirements. OMB staff will become fully imbedded in the Agency's day to day administrative grant functions and existing grants accountants serving under the Administrative Services Division will be reassigned to the OMB. These employees will be deployed in key operating units to implement consistent business processes and internal controls and carry out corrective actions. A. Status of Prior Year Recommendations 2010-1 Grant Reporting Controls(Sheriffs Office) Observation During our single audit testing over reporting requirements for the"Recovery Act—Edward Byrne Memorial Justice Assistance Grant(JAG)Program/Grants to States and Territories" federal program, we noted that for one of the quarterly performance reports during fiscal year 2010 sampled that the expenditures were overstated by approximately$2,850. The report covered the three month period ended June 30, 2010 and erroneously included March 2010 expenditures,which had been previously reported in the performance report covering the prior three months ended March 31, 2010. We also noted that there was no evidence of reports submitted to the grantor agency being reviewed prior to submission by someone other than the preparer for accuracy and completeness. 1202-1334456 3 A member Firm of Ernst 8 Young Global Lirnited Packet Page -1683- 3/12/2013 16.D.4. IIlI1Ill1111hhhhh1 di ERNST&YOUN G Recommendation We recommend that all reports submitted to grantor agencies be subjected to a supervisory review for accuracy and completeness prior to submission. The preparer and the reviewer should sign-off on the report and a copy should be retained in the file to provide evidence that the report was properly reviewed. Management's response The expenditures on the quarterly reports are a compilation of the monthly claims which have been submitted to the grantor. Monthly claims are reviewed and approved by the Finance Director prior to submission. The report for the period ended June 30, 2010 inadvertently included one expenditure from the prior reporting period. It should be noted that all expenditures were accurately reported in the final closeout report for the grant. A spreadsheet is maintained which details expenditures for the grant claims and provides documentation for what is submitted on the quarterly reports. Because all required reports are directly submitted online,the spreadsheet will serve as a review document for the input for the submitted expenditure information. The preparer and the reviewer will sign-off on the spreadsheet. The submitted report will be compared to the spreadsheet to ensure correct information was reported to the grantor. Current year status Spreadsheets are maintained for expenditures for each individual grant. The spreadsheets are used to input required information for online reports. All spreadsheets are reviewed and signed off on by the preparer and the Finance Director prior to any claims being submitted. The Grants Coordinator compares the information reported to the grantor to the appropriate spreadsheet to ensure correct information was reported. 2010-2 Subrecipient Agreements—ARRA Requirements Observation OMB Circular A-133 guidelines require that pass-through entities separately identify to each subrecipient, and document at the time of the subaward and disbursement of funds, the Federal award number, CFDA number, and the amount of American Recovery and Reinvestment Act (ARRA) funds; and require their subrecipients to provide appropriate identification in their Schedule of Expenditures of Federal Awards (SEFA) and Data Collection Form (SF-SAC). For certain ARRA federal programs tested during our single audit(i.e., Community Development Block Grant ARRA Entitlement Grants and Homelessness Prevention and Rapid Re-Housing Program)for which the County made awards to subrecipient organizations, we noted that the agreements with the subrecipients provided the required information regarding the awards and 1262-1334456 4 A member firm of Ernst f.Younq Global Limited Packet Page -1684- 3/12/2013 16.D.4. I.,, EU ERNST&YOUNG III indicated that"the subrecipient shall maintain all records required by ARRA." However,they did not explicitly indicate that the subrecipients are to appropriately identify the ARRA funds in their SEFA and SF-SAC. Recommendation We recommend that the County update its standard form of subrecipient agreement to explicitly state the requirement to provide appropriate identification of ARRA funds in the SEFA and SF- SAC. Management's response The Collier County Department of Housing, Human &Veteran Services(HHVS) concurs with this audit observation and agrees to amend its American Recovery and Re-Investment Act (ARRA) grants to more specifically outline the Schedule of Expenditures of Federal Awards (SEFA) and the Data Collection Form (SF-SAC)reporting requirement for its sub recipients. The amendment will be made to all Homelessness Prevention and Rapid Re-Housing Program (HPRP)and Community Development Block Grant-Recovery(CDBG-R) sub recipient grant agreements. Current year status Existing subrecipient agreements were approved by the Board of County Commissioners on May 24, 2011 to amend.them and incorporate additional American Recover and Reinvestment Act of 2009 (ARRA) reporting requirements. All future subrecipient agreements will contain the - proper reporting requirements as well. C. Other_Required Communications The Rules of the Auditor General, Section 10.554 (l)(i)(1),require that we address in the management letter whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. The status of recommendations made in the preceding annual financial audit is included above. In connection with our audit, we noted no instances of noncompliance with Section 218.415, Florida Statutes regarding the investment of public funds. The Rules of the Auditor General, Section 10.554(1)(1)(3), require that we address in a management letter any recommendations to improve Collier County,Florida's financial management,accounting procedures, and internal controls. Current year recommendations to improve Collier County, Florida's financial management, accounting procedures, or internal controls are included above. 1202-1334456 5 A member firm of Ernst 8 Young Global Limited Packet Page-1685- 3/12/2013 16.D.4. 1 11 11 11111111111111111 W'" E `RNST&YOUNG The Rules of the Auditor General, Section 10.554(1)(i)(4),require that we address in a management letter any violations of provisions of contracts and grant agreements or abuse that have an effect on the financial statements that is less than material but more than inconsequential. The results of our audit disclosed no violations of provisions or contracts and grant agreement or abuse that would have an effect on the financial statement that is less than material but more than inconsequential. The Rules of the Auditor General, Section 10.554(1)(i)(5), require disclosure in the management letter of the following matters, if not addressed in the auditor's report on internal control over financial reporting and on compliance and other matters or in the schedule of findings and questioned costs,and are not clearly inconsequential: (a) Violations of laws,rules, regulations, and contractual provisions or abuse that have occurred, or are likely to have occurred, would have an immaterial effect on the financial statements, and were discovered within the scope of the audit; (b) Control deficiencies that are not significant deficiencies, including, but not limited to: (1) Improper or inadequate accounting procedures(e.g., the omission of required disclosures from the annual financial statements); (2) Failures to properly record financial transactions;and (3) Other inaccuracies, shortages, defalcations, and instances of fraud discovered by,or that come to the attention of, the auditor. The results of our audit disclosed no violations of laws, rules, regulations,and contractual provisions or abuse, no improper or illegal expenditures, and no control deficiencies other than the internal control recommendations included above. The Rules of the Auditor General, Section 10.554(1)(i)(6),also require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the management letter, unless disclosed in the notes to the financial statements. In that regard, Collier County,Florida was established under Chapter 107, Section 1, Florida Statutes. The legal authority for Collier County and its component units are discussed in Note 1 to the financial statements. During the course of our audit of the County, nothing came to our attention that would cause us to believe that the County was in a state of financial emergency, as defined by Section 218.503(1),Florida Statutes. As required by the Rules of the Auditor General, Section 10.554(1)(i)(7)(b),the County filed its report pursuant to Section 218.32(l)(a),Florida Statutes. Based on our review of the financial information contained in this report, no material differences were found in comparing this information to that of the basic financial statements. 1202-1334456 6 A member firm of Ernst A Young Global limited Packet Page-1686- 3/12/2013 16.D.4. ,,•.,, �/ ERNST&YOUNG As required by the Rules of the Auditor General, Sections 10.554(I)(i)(7)(c)and 10.556(7), we applied financial condition assessment procedures. It is management's responsibility to monitor the County's 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. This report is intended solely for the information and use of the Board of County Commissioners, management and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other than these specified parties. t February 29, 2012 1202-1334456 7 A member firm or Ernst S.Young Global Limited Packet Page -1687-