Loading...
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. JGP:CMC:sg Ukt _ 4-