HomeMy WebLinkAboutR-98-0589J-98-542
05/18/98
RESOLUTION NO. 9 8— 5 0 0
A RESOLUTION, WITH ATTACHMENT, AUTHORIZING
AND DIRECTING THE CITY MANAGER TO EXECUTE A
PROFESSIONAL SERVICES AGREEMENT WITH DAVID M.
GRIFFITH & ASSOCIATES, LTD., IN SUBSTANTIALLY
THE FORM ATTACHED, TO PROVIDE CERTAIN COST
ALLOCATION SERVICES IN CONNECTION WITH THE
CITY OF MIAMI'S COMMUNITY DEVELOPMENT BLOCK
GRANTS FOR FISCAL YEARS 1986, 1987, 1988, AND
1989 AND THE CITY'S SUPPLEMENTAL DISASTER
RELIEF GRANT, TO ASSIST THE CITY IN PREPARING
ITS RESPONSE TO THE FINDINGS IDENTIFIED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT'S DISTRICT OFFICE OF THE
INSPECTOR GENERAL IN ITS AUDIT REPORT DATED
MARCH 26, 1998, FOR AN AMOUNT NOT TO EXCEED
$35,000.00; ALLOCATING FUNDS THEREFOR FROM
ACCOUNT CODE NO. 921002-270.
WHEREAS, the U.S. Department of Housing and Urban
Development's District Office of the Inspector General ("OIG")
conducted a review of the City of Miami's Community Planning and
Development ("CPD") Programs for the years 1995 and 1996; and
WHEREAS, the OIG issued its Audit Report ("Audit") on March
26, 1998; and
WHEREAS, the Audit contains certain findings that the City
did not have Cost Allocation Plans to support indirect costs
charged to the City's Community Development Block Grants for
fiscal years 1986, 1987, 1988 and 1989 ("Fiscal Years") in the
amount of $2,133,797, and the Supplemental Disaster Relief Grant
("Grant") in the amount of $551,600; and
ATTACHMENT (3)
`,� ONTAINED
CM COMMMON
WMEMG OF
JUN 0 9 1998
Bmeolutlm No.
9R- 589
WHEREAS, notwithstanding the unavailability of Cost
Allocation Plans for the periods in question, in order to
comprehensively and effectively respond to the Audit, the City
will have to develop an indirect cost rate based on the
consistency of the data, such as (1) the Comprehensive Annual
Financial Report, (2) budget documents, and (3) other source
documents, for said Fiscal Years and the Grant; and
WHEREAS, David M. Griffith & Associates, Ltd.("DMG") has the
necessary expertise to assist the City in preparing its response
to the Audit, in that DMG has previously prepared Cost Allocation
Plans regarding the City's federal grant programs;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are hereby adopted by reference
thereto and incorporated herein as if fully set forth in this
Section.
Section 2. The City Manager is hereby authorized and
directed to execute a Professional Services Agreement with David
M. Griffith & Associates, Ltd., in substantially the form
attached, to provide certain cost allocation services in
connection with the City of Miami's Community Development Block
Grants for fiscal years 1986, 1987, 1988, and 1989 and the City's
Supplemental Disaster Relief Grant, to assist the City in
preparing its response to the findings identified by the U.S.
Department of Housing and Urban Development's Office of the
Inspector General ("OIG") in the OIG's Audit Report dated March
2 98 -- 589
26, 1998, for an amount not to exceed $35,000.00, with funds
therefor hereby allocated from Account Code No. 921002-270.
Section 3. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 9th day of June 1998.
ATTEST:
JOE CAROLLO, MAYOR
In accordance with Miami Code Sec. 2-36, since the Mayor did not indicate approval of
this legislation by signing it in the designated place provided, said legislation n ri
becomes effective with the elapse of ten (10) days fr the date of Corn issicn a: -lion
regarding same, without the Mayor exercisi a c
/W'1")
WALTER J. FOEMAN
CITY CLERK
PREPARED AND APPROVED BY:
LINDA KELLY RFARSO1)T ' \
ASSISTANT CITY ATTORNEY
LKK/csk/W2567
0
3
May-10-98 11:39P Betty O. Armstrong
P.O1
40 DAVID M. GRIFFITH & ASSOCIATES, LTD.
Professional Services for the Public Sector
1621 Metropolitan Blvd. Ste. 201
Tallahassee, Florida 32308
DMG (904) 386-1101 FAX (904) 386-3599
TO: Lourdes Reyes
Comptroller
FROM: Betty Armstrong
Vice President
DATE: 519198
SUBJECT: Cost Allocation Procedures for HUD Audit Exceptions
Thank you for the opportunity to offer continuing cost allocation services to the City of Miami.
Based on my conversation with you and Ken Edwards, DMG offers the following services for
your consideration.
Fiscal Years '86, '87, '88, and `89
Scope of Services:
On a per year basis for Fiscal Years '86, '87, '88 and '89, DMG proposes to provide for the
computation of an indirect cost application for the purpose of identifying an equitable overhead
or indirect cost charge to the CDBG grant(s) for the City for the years in question. The City will
determine which years will be subjected to this process.
At the initiation of the project DMG will provide a list of information to be gathered by the City for
each of the years to be analyzed. Upon receipt of this information, DMG will determine whether
an on -site visit is necessary to complete the analysis of the information. DMG will expect City
staff to be available for telephone consultation as needed to complete this project expeditiously.
Because the records as well as the staff are no longer readily available, DMG will rely on the
CAFR, the Budget documents, and the best available personnel information to prepare a
modified cost allocation procedure. DMG will also prepare ratio comparisons to identify the
logical relationships of the indirect costs from year to year. The cost allocation procedures will
be consistent with the concepts and procedures of OMB A-87 guidelines limited by the
information pool available.
DMG will assist the City in its explanation and defense of the identified indirect costs in
negotiating with HUD for approval.
David M. Griffith & Associates. Ltd. Page 1 City of Miami HUD Audit Review
May-10-98 11:39P Betty O. Armstrong
P.02
The City should recognize that this process is not guaranteed to identify costs equal to that
which has been claimed against the grant years. The amount may be more or less than the
already claimed amounts. DMG brings no bias or preconceived idea of the outcome of the
amounts to be identified. The City may also be placed in the situation of preparing annual roll -
forward calculations to adjust the charges to actual, as each future year's cost allocation plan is
prepared. This determination will be upon the authority of HUD.
Fees:
For each year's cost allocation procedure defined above, DMG's not to exceed fee will be
$7,900. We estimate from 80-96 hours for each years compilation. DMG will bill the City monthly
on a time and expense basis but not to exceed the $7,900 per fiscal year project. Time and
expense billings will be at DMG's State Contract rate of $95 per consultant hour plus actual
expenses.
For the assistance to the City in its explanation and defense of the identified indirect costs in
negotiating with HUD for approval, DMG's fee will be an additional $1,500. This fee is based on
a single on -site visit for the purpose of meeting with HUD to review the results of the study. This
fee is applicable only in the case the City requests DMG's assistance in this process.
Should services beyond the defined scope be required or requested DMG will provide mutually
agreed upon services at DMG's State Contract rate of $95 per consultant hour plus expenses at
actual costs. • ., .
Fiscal Year '93
Scope of Services:
For Fiscal Year '93, DMG will provide a cost allocation analysis to determine the justification for
the administrative charges made by the City against the HUD grant related to Hurricane
Andrew. The City claimed in excess of $500,000 administrative costs. HUD has questioned
these costs because of a lack of documentation to support these costs. DMG will seek to
identify allowable costs of administering this grant and overhead costs associated with this
grant. This analysis will require one on -site visit to allow for access to the grant's full
composition of information. A detail listing of every transaction will be the single most valuable
piece of information for this analysis.
DMG will require the City to provide a full definition of the terms of the grant prior to performing
this analysis. DMG will look for opportunities frequently overlooked in disaster related programs.
There may or may not be such opportunities with this particular grant.
DMG will review the cost allocation plan prepared for Fiscal Year '93 to determine the
appropriate citywide overhead allowable to the program. Departmental overhead for contributing
departments will be considered and calculated where appropriate.
Finally DMG will compile a report defining our findings and the results of our computations.
References to supporting documents or copies of the supporting documents will be contained in
the report.
David M. Griffith & Associates, Ltd. Page 2 City of Miami HUD Audit Review
98- 58-9
May-10-98 11:40P Betty O_ Armstrong
P_03
Fees:
For the Fiscal Year '93 cost allocation and cost analysis procedure defined above, DMG's not to
exceed fee will be $8,100. DMG will bill the City monthly on a time and expense basis but not to
exceed the $8.100. Time and expense billings will be at DMG's State Contract rate of $95 per
consultant hour plus actual expenses.
Should services beyond the defined scope be required or requested DMG will provide these
services at its State Contract rate of $95 per consultant hour plus expenses at actual costs.
If this grant had a multi -year life, DMG will be prepared to analyze the life of the grant at a to -be -
negotiated additional fee.
DMG looks forward to working with the City to complete the important tasks of these projects.
Please call me at 850-386-1101 or page me at 888-741-1769 if you have questions or need
additional information.
Thank you.
David M. Griffith & Associates, Ltd. Page 3 City of Miami HUD Audit Review
. -4 -
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: Honorable Mayor and Members
of the City Commission
00
FROM: A /aOWS w
City Manager
RECOMMENDATION
DATE: May 12, 1998
27j
SUBJECT: David M. Griffith Contract
REFERENCES: May 26, 1998
ENCLOSURES: Commission Meeting
FILE :
It is respectfully recommended that the attached resolution be approved authorizing the
City Manager to execute a professional services agreement with David M. Griffith and
Associates, Ltd. (DMG) to provide consulting services related to the computation of a
cost allocation plan for overhead and indirect cost charges incurred in connection with the
CDBG grants for fiscal years 1986, 1987, 1988, and 1989. For the CDGB grant year of
1993, DMG will provide a cost allocation analysis to justify the administrative charges
made by the City against the HUD grant related to Hurricane Andrew. The consulting
services will be provided at a fee not to exceed $45,000 and will assist the City in
preparing the corrective action plan proposed in response to the HUD Audit.
BACKGROUND
Federal guidelines 'require that a new central service cost allocation plan be prepared each
year to support charges to federal grants, allocating administrative costs through an
indirect cost plan. The HUD Audit Report, issued March 26, 1998, by the District
Inspector General for Audit-Southeast/Caribbean, states in finding #1 that the City spent
$5,203,607 of CDBG funds for grant administrative expenses without proper support, and
that in the absence of providing adequate support for these expenses, the City should
repay these unsupported costs to the grant program. During FY 1986, 1987, 1988, and
1989, the City did not prepare cost allocation plans. Therefore, DMG will assist the City
in preparing and submitting justification for the administrative expenses allocated for
each of those grant years and will provide the basis for the City's response to finding #1
of the audit report.
Since 1984, David M. Griffith & Associates, Ltd. has provided the City with consulting
services and has prepared cost allocation plans for the City of Miami for all years with the
exception of the years 1986 through 1989. Based upon their experience and expertise, it
is recommended that the City Commission adopt the attached resolution.
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