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HomeMy WebLinkAboutItem #76.1 - Discussion ItemCITY OF MIAMI, FLORIDA INTER -OFFICE MEMO Cy, f;{Q1,1b1AGER'S OFFICE TO Howard V. Gary -- - DATE: 19uanua3y 2� �. 9 83 FILE: City Manager ;� l FROM Charlotte Gallogly, Directo `--``� Department of Economic Development SUBJECT. Evaluation of Contracts with Neighborhood Economic _(p Development Corporations REFEdENCJS ENCLOSURES Two ` 2 ) Pursuant to your and Commissioner Dawkins' request, I have evaluated the performance of the eight (8) corporations which are currently under contract with the City of Miami to establish and manage economic development programs within their respective neighborhood business districts. A listing of the corporations under contract and their performance score based on a rating system with a best possible rating score of 100 points are provided below: Contractor Numerical Score Little River Chamber of Commerce 100 Downtown Miami Business Association 92 Martin Luther King Economic Development Corporation 92 SBOC Little Havana 84 Overtown Economic Development Corporation, Inc. 78 Wynwood Community Economic Development, Inc. 54 Allapattah Merchants Association 48 Coconut Grove Local Development Corporation, Inc. 46 This memorandum will provide you with background information on the City's prior years experience with these contractors, the contract requirements in effect for the 8th year program, an evaluation of the contractor's performance during the first six months of FY 82-83, and lastly, my recommendations regarding contract continuation with the contractors that have not performed at an acceptable level. BACKGROUND At the same time the Urban Development Services, Inc, assisted the City to establish Miami Capital Development Corporation, it also provided the City with several reports on the capacity and perform- ance of the economic development corporations. These reports indicate that UDS believed that "the funding of these neighborhood organizations for general and administrative functions will not result in any sig- nificant positive impact on the economic environment of the community." F-.71 ►A1 Page 2 However, they did recommend that strong contract compliance and management oversight be provided in the event that the City intended to achieve positive results through funding the neighborhood organizations. As you are aware, the City of Miami chose to enter into agreements with these contractors beginning with the 6th year Community Development program (7/l/80 - 6/30/81). These contracts were renewed for the 7th year Community Development program (7/1/81 - 6/30/82) and again renewed for the 8th year program. After reviewing the files for the 6th and 7th year contracts, it is very apparent that the City did not mandate a strong work program and budget or monitor the contractors. Therefore, neither I or any- one can analytically evaluate the performance of the contractors or the benefit of these contracts to the City of Miami. During these two years, the City conducted three separate fiscal audits which questioned over $55,000 in expenditures. We presently are working with the contractors to resolve the audit costs so that we will minimize the amount that the corporations have to reimburse the City. It should be noted that the Internal Audit Department indicated in these audits that the Department of Trade and Commerce did not provide any direction to these contractors in terms of policies and procedures or monitor their performance. Additionally, the U.S. Department of HUD has repeatedly cited the City for the poor performance of the contractors and failure of the City to establish fiscal controls. Sth Year Contract Requirements (7/l/82 - 6/30/83) As you will recall, one of your priorities and mandates to me as I assumed the position of Director of the Department of Trade and Commerce in February 1982, was to provide a balance between inter- national development and local economic development. Therefore, my efforts were concentrated during the Spring of 1982 in working with the contractors to develop strong management by objective work programs for the upcoming 8th year, to establish a CBO Policies and Procedures Manual and a Program Directive System and to formulate narrated budgets to assure that the problems of the past were not repeated during the 8th year and to direct contractor efforts in a positive fashion. In April 1982, I forwarded to all prospective contractors a list of contract requirements for the upcoming year (see attached). It is important to review nine (9) of the most critical requirements (management by objectives) that the contractors had to implement during the 8th year, since our evaluation of the contractors is based on their performance against requirements. The requirements in place for FY 82-83 are listed below: 1. Conduct an annual business survey during the months of July and August 1982 utilizing a standarized questionnaire provided by the Department of Trade and Commerce. r :1 ►W Page 3 2. Organize one or more merchant associations within each neighborhood area and conduct the first meeting by July 300 1982 and thereafter on a monthly basis. 3. Develop a business crime prevention program for the businesses that reside within each neighborhood by business district, by no later than August 31, 1982. Specifically, contractors should develop business crime watch programs for each of the business areas within the neighborhoods. 4. Identify and implement the projects that will be directed towards earning revenues for each contractor so that the Community Based Organizations can become self-sufficient within a three-year period. S. Publish a business -oriented newsletter on a quarterly basis. 6. Conduct a monthly inventory of commercial and office space and report this information to the Department of Trade and Commerce utilizing a standarized reporting format by no later than the 10th working day following the end of each month. The first month's inventory update will be due September 14, 1982. 7. Conduct monthly meetings of the corporation's Board of Directors. 8. Refer four neighborhood businesses a month, who are seeking financial assistance, to Miami Capital Development, Inc. 9. Identify the major economic development projects to be undertaken for each neighborhood area. Upon receipt of the contract instructions, the CEOs submitted management by objectives which addressed each and every one of these contract requirements. With the beginning of the 8th contract year, each contractor was required to implement the MBOs, adhere to the CBO Policies and Procedures Manual (see attached) and establish a strong financial system. In addition to the establishment of a strong contract compliance system, we also advised each contractor that they would be monitored on a monthly basis for both program- matic and fiscal contract compliance. This occurred to assure that contractors were in compliance and to prevent, early on in the contract year, the problems that were apparent in the City's prior audits of three corporations in which they questioned over $55,000 in costs. In addition to establishing a series of contract requirements, it is important to point out that this Department implemented the Department of Community Development requirement that funding to these contractors which had previously been at $50,000 a year would be reduced with the beginning of the 8th year. Specifically, the change in the policy was that over a three year -period (8th, 9th, and loth CD years) the City would withdraw its support from El Page 5 Consideration of Wynwood for a 9th year contract by the City shall be dependent upon the Corporation's raising the required $6,250 , its ability to raise an additional $6,250 , and incorporating a Merchants Association prior to the 9th year program. Allapattah Merchants Association Allapattah Merchants Association did not raise the required $6,250 and did not manage an aggressive business development program. Because of the delay in this corporation's receiving its State grant, Allapattah utilized our contract funds to off -set the shortfall, and therefore, at this point in time all funds in the contract ($43,750) have been fully expended and I have advised the corporation its contract has been terminated. The corporation's ability to go forward into the 9th year should be dependent upon the raising of the required $6,250, its ability to raise an additional $6,250, and the design of a business development program prior to June 30, 1983. It is important to note that this corporation may receive a $1.5 million grant from UMTA for neighborhood commercial development asso- ciated with the Allapattah Rapid Transit Station. Coconut Grove Local Development Corporation, Inc. During the entire time that I have been with the City, we have been working with the Coconut Grove Local Development Corporation to resolve a host of problems related to audit and performance concerns. One of our most important requirements was that a new Board of Directors be formed and that qualified staff be hired. Even though Coconut Grove did not meet many of the major requirements, it did in the last 30 days of the contract form a new Board of Directors and raised the required $6,250. The Board is currently involved in evaluating and making recommendations to the City on the Grand Avenue Plan which was prepared by the Planning Department in conjunction with this department. Because of the fact that we finally have a viable Board which has demonstrated the ability to raise revenue ane to take a leadership position in the development of a business development program for Grand Avenue, I recommend that we go forward with this contract with continued management oversight for the remainder of the contract year. CG/vp Attachments 0 0 CITY OF MIAM1. FLORIDA INTER -OFFICE MEMORANDUM TO Executive Directors BATE March 30, 1982 rILM Community Based Organizations SUBJECT: FY ' 82-' 83 Contractual Instructions room Charlotte Gallogly REFERENCES:• Director Trade & Commerce ENCLOSURES-. As indicated to you at our meeting of February 19, 1982, one of my initial priorities was to meet with each of the Directors of the Community Based Organizations (CBO's) and members of the Board of Directors to discuss contract achieve- ments, problems and plans for the future. I have finally concluded these meetings and have found them to be extremely productive because of your ability to be -frank and candid about your organization's concerns. ' Based on the discussions we have.had and the priorities of the City of Miami, I have developed the attached FY 182-183 con- tractual instructions. These instructions specify our require- ments for the coming year. Please note that you are to provide me with completed work plans and budgets by April 28, 1982. After we have received and reviewed these contractual proposals, I will meet with each of you to finalize the programs for FY 182-183. If we are able to come to a meeting of the minds related to contract performance, I will submit these to the Commission for approval at the June 10, 1982 meeting. At our meeting scheduled for March 31, 1982, I will discuss these instructions in detail and respond to any questions. If you need any technical assistance beyond that provided during the manage- ment by objectives training scheduled for the week of April 5, 1982, please advise me immediately. CG:zd cc: Jim Reid, Assistant City Manager Dena Spillman, Director, Community Development Dept. f 0 DEPARTMENT OF TRADE AND COMMERCE COMMUNITY BASED ORGANIZATIONS CONTRACTUAL WORK PROGRAM AND BUDGET INSTRUCTIONS FOR FY ' 82--' 83 0 Potential contractors will be expected to work programs and budgets for FY 182-183. are to be submitted to the Department of by close of business, April 28, 1982. I. WORK PROGRAM 'II?STrGCTIOtiS Work programs are to be developed by one or more management by objectives requirements noted below: In order tors in completing the work program objectives format (see Attachment A) a training session the week of April ment by objectives are developed. A. Contract'Requirements submit detailed These materials Trade and Commerce each contractor to include for each of the contract to assist potential contrac- utilizing a management by the Department will conduct 5, 1982 to review how manage - 1. Conduct an annual business survey during the months of July and August 1982 utilizing a standardized questionnaire provided by the Department of Trade and Commerce. Attached you will find a questionnaire (Attachment B) which was used during FY 181 by the Downtown Miami Business Asso- ciation to survey businesses in their respective geographic area. This questionnaire was developed with the assistance of the City of Miami Planning Department, and has been pro- grammed to facilitate the compilation and analysis of the surveys on a computerized basis. The questionnaire will serve as the base line instrument. Each contractor should review the items in the questionnaire and determine if there is a need to make additions or dele- tions. If contractors are desirous of making changes, please provide the Department with the suggested changes by close of business Tuesday, April 16, 1982. Presently, the Depart- ment of Trade and Commerce is reviewing the contents of the questionnaire and will be making changes in order to add questions related to financial assistance, employment, busi- ness retention and crime prevention. 2. Organize one or more merchant associations within each neigh- borhood area and conduct the first meeting by July 30, 1982 and thereafter on a monthly basis. Contractors will be responsible for developing strong merchant associations which will be representative of the array of. ' businesses that exist within the various neighborhoods.•..Con- tractors will be responsible for convening monthly meetings of the associations, keeping detailed minutes and following -up -1- 0 on actions taken by the merchant associations. Once the survey results are finalized for each neighborhood, the merchant associations will be responsible for reviewing the data and coming up with initiatives to address problems or needs identified by the survey in the neighborhoods. 3. Develop a business crime prevention program for the businesses that reside within each neighborhood, by business district, by no later than August 31, 1982. Specifically, contractors should develop business crime watch programs for each of the business areas within the neighborhoods. . The City of Miami Police Department will assist the Department of Trade and Commerce in implementing the crime prevention programs. The..Police Department will be available to meet with the merchant associations to describe the programs and services they have to assist the businesses in assessing their security needs. Additionally, the Police Department has agreed to provide each neighborhood with data on the incidence of crime by type over the past 2 to 3 years. This will assist the merchant associations in understanding the nature of the problem and developing an array of options to address their concerns. 4. Identify and implement the projects that will be directed towards earning revenues for each contractor so that the Community Based Organizations can become self-sufficient within a three-year period. Contractors should use the management by objective format to identify the various revenue generating projects, dates they will come on line and the amount of revenue to be generated, on a monthly basis. Due to the cuts that have been made in the City's Community Development Block Grant for FY 182-183, the City can no longer maintain economic development programs at the neighborhood level at their existing funding levels. Starting July 1, 1982, new contracts for the Community Based Organizations (CBO's) will require the following. During the first six months, the CBO's must obtain alternative funding equal to at least twenty-five percent of their expenses to receive the Community Development Block Grant funds. Therefore, the usual contract of $50,000 will be reduced to $43,750 -- $25,000 to fully cover the first six months of the program, and $18,750 to cover the second half expenses at a seventy-five percent level. Contractors will be expected to have raised �S by January-1, 1983 from the various revenue generating pro ects. Contractors who are not able to generate the required revenue amount will have their contracts terminated effective January 10, 1983. -2- U S. Publish a business -oriented newsletter on a quarterly basis. The issuance of the newsletter will be one of the ways to generate revenue to the Community Based Organizations through the advertising associated with the publication of the news- letter. The first newsletter is to be published no later. than September 30, 1982 and thereafter at the end of each quarter. 6. Conduct a monthly inventory of commercial and office space and report this information to the Department of Trade and Commerce utilizing a standardized reporting format by no late than the loth working day following the end of each month. The first month's inventory update will be due September 14, 1982. 7. Conduct monthly meetings of the corporation's Board of Direc- tors. Minutes are to be kept of each meeting and are to be forwarded to the Department of Trade and Commerce by the loth working day following the end of each month. 8. Refer four neighborhood businesses a month, who are seeking financial assistance, to Miami Capital Development, Inc. This will be one of the most important objectives that contractors will have to meet since Comm»nity Based Organi- zations serve as the primary outreach network to assist Miami Capital Development, Inc. in securing loan applicants for the Revolving Loan Fund. 9. Identify the major economic development projects to be undertaken with each neighborhood area. During the past 4 weeks the Department of Trade and Com- merce has been holding discussions with potential contractors to identify the major economic development initiatives for FY 182 - 083 by neighborhood area. The submitted MBOs should describe the activities to be engaged in to imple- ment these projects. II. BUDGET INSTRUCTIONS Contracts will be required to submit detailed budgets to the Department of Trade and Commerce by close of business, April 28, 1982. The budgets are to be prepared utilizing the budget forms described below. A. Line Item Budget Summary Form This form (see Attachment C for completed sample) details the amounts that Community Based Organizations expect to spend during the course of the contract on a line item basis. Amounts for line items that are applicable to various operations should be filled in the appropriate space. -12- 2 0 B. Budget Narrative Form The Budget Narrative Form (see Attachment D for completed sample) will be an attachment to your Line Item Budget Summary Form. Fiscal activities projected for the year should be described on a line item basis. The completion of this form is a critical part of the budget, since it will assist the Department in understanding contractors' budgetary needs. Blank copies of the forms are attached for your use as Attachment E. -4- POLICIES AND PROCEDURES MANUAL FOR COMMUNITY BASED ORGANIZATIONS DEPARTMENT OF ECONOMIC DEVELOPMENT a u INTRODUCTION One of the major goals of the Department of Economic Development for 1983 is to work with the Community Based Organizations (CBOs) to ensure that they are able to accomplish specific economic development initiatives which will assist them in becoming self-suf- ficient within the next three-year period. Through the development and utilization of management -by -objective work programs and the accomplishment of specific economic programs, self-sufficiency can be obtained. The guidelines set forth in this Policies and Procedures Manual for Community Based Organi- zations have been designed to make the accom- plishment of these goals attainable. This manual is to be used as an aid to ensure contract compliance and to explain the various contract requirements that the CBOs must meet. The manual has been incorporated into the contractual agreements between the CBOs and the City of Miami, thereby becoming an inte- gral part of the contracts. HOWARD V. GARY City Manager DEPARTMENT OF TRADF & COMMERCE DEVELOPMENT / New Wood Tower, 100 N (ii.;ayr.r Bhci 9tII tl:-or : Alum;. Florida 33132 0051 579.31.10 , IOIe% No 15:::1 MIAID t I CHARL(1TTT A. GAIIOUV, Director 0 4w TABLE OF CONTENTS PAGE E NO. I. REGULATIONS AND RESPONSIBILITIES A. City/Federal Regulations . . . . . . . . . . . . 1 B. Contract Requirements . . . . . . . . . . . . . . 1 C. Contract Violations . . . . . . . . . . . . . . . 3 D. Contract Termination . . . . . . . . . . . . . . 3 II. IMPLEMENTING THE CONTRACT A. Start -Up Procedures . . . . . . . . . . . . . . . 4 B. Implementing A Financial System . . . . . . . . . 4 1. Internal Financial Control . . . . . . . . . . 4 2. Establishment Of An Accounting System . . . . 6 C. Implementing A Personnel System . . . . . . . . . 7 III. MAINTAINING THE CONTRACT A. Advances . . . . . . . . . . . . . . . . . . . . 8 B. Reimbursement Packages . . . . . . . . . . . . . 8 C. Contract Modification Requests . . . . . . . . . 10 D. Items Requiring Prior Approval . . . . . . . . . 12 E. Annual Inventory . . . . . . . . . . . . . . . . 13 F. Monitoring Visits . . . . . . . . . . . . . . . . 13 G. Management By Objective Work Programs . . . . . . 13 H. Public Information Materials . . . . . . . . . . 13 IV. CLOSING DOWN THE CONTRACT A. Administrative/Financial Procedures For Close -Out ... . . . . . . . . . . . . . . . . . 14 B. Preparation Of Records For Storage . . . . . . . 15 C. Disposition Of Capital Equipment . . . . . . . . 16 D. Close -Out Procedures For End Of Fiscal Year . . . 16 V. EXHIBITS SUMMARY EXHIBIT I CBO Representatives Authorized To Receive And Disburse Funds Form EXHIBIT II Statement Attesting To The Establish- ment And Maintenance Of An Accounting System Form EXHIBIT III Reimbursement Request Form r EXHIBIT IV Expenditure Report Form EXHIBIT V Payroll Reimbursement Schedule Form EXHIBIT VI Long Distance Telephone Log Form EXHIBIT VII Contract Modification Request Form EXHIBIT VIII Budget Modification Request Form EXHIBIT IX Management By Objectives Modification Request Form EXHIBIT X Monthly MBO Status Report Form 0 V I. REGULATIONS AND RESPONSIBILITIES A. City/Federal Regulations As a result of federal regulations and guidelines estab- lished and administered by the Department of Economic Development, the City of Miami has established regulations in the form of a Policies and Procedures Manual for Community Based Organizations. The purpose of this section is to pro- vide a listing of those obligations that Community Based Organizations (CEOs) must meet in order to remain in compliance with the provisions of their contracts. The Policies and Procedures Manual for Community Based Organizations is incor- porated into the contractual agreement between the City and the different Community Based Organizations. If any one of these obligations is not met, the contractor shall be considered in violation of its contract. B. Contract Requirements Contractors are responsible for meeting the following requirements: -- Contractors shall retain all financial and programma- tic records pertaining to funds received as a result of this contract for a period of three (3) years sub- sequent to the expiration of the contract or until all audits are completed, whichever period is longer. - - Contractors shall comply with all applicable laws, ordinances and codes of federal, state and local governments as specified in Section 2.3 of their con- tracts. Specifically, the Contractor agrees to comply with Housing and Community Development Acts of 1974 and 1977, Section 109 with Executive Order 11246 and 11063; and with Section 3 of the Housing and Urban Development Act of 1968 (Section 570, 303). -- The CEOs shall give advance notification, in writing, to the City of their desire to enter into subcontracts. None of the work or services, including, but not limited to, consultant work or services, covered by the CBOs contracts shall be subcontracted without prior written approval of the Department of Economic Development. Any work or services subcontracted shall be subject to each of the provisions of the CBOs contracts. Proper docu- mentation in accordance with the Department of Economic Develppment and City guidelines must be submitted to and approved by the Department of Economic Development prior to the execution of any subcontract. The City reserves the right to review all bid documents both -1- ►] with private non-profit contractors, and other en- tities and to review and audit books and records re- lated to the bidding process. The advance notification process will include the following steps: 1. Identification of the subcontractor and services to be provided. 2. The proposed subcontract price together with a com- plete and accurate breakdown of that price on a component by component basis. 3. Identification of the type of subcontract to be used. 4. Summary of actions taken to select the subcon- tractor. -- Contractors shall comply with all federal, state and local conflict of interest laws. -- No official or employee of a CBO may be admitted di- rectly or indirectly to any share or part of the orga- nization's contract or to any benefits to arise from the same, nor own or acquire any personal interest in any property, contract or proposed contract which would conflict with or relate to the performance of his/her duties or responsibilities under the contract. If any such person presently or in the future acquires, owns or controls any such share, benefit, or personal interest, he/ she shall immediately disclose such interest to the City and other appropriate agencies. Upon such disclosure, such person shall discontinue his/her participation if such participation is contrary to the public interest. -- Contractors shall develop a management by objective work program. The Contractor shall not perform in a way inconsistent with the terms of the work program except as authorized in writing by the Department of Economic Development. Such authorization by the City shall be subject to and in accordance with the prescribed guidelines as discussed in Section III.C.--Contract Modi- fications. All contractors are required to submit a monthly MBO status report by the 5th working day of the month. (See Exhibit X; . -- Contractors are required to generate 25% of the second half of the contract's funding or an amount of $6,500, by January 1, 1983. In the event a Contractor fails to generate the above amount by January 1, 1983, its contract with the City will be terminated and all outstanding unencumbered and unused monies shall be returned to the City. -- All Contractors are required to submit a monthly reimburse- ment request. -2- -- Contractors are required to attend monthly CBO meetings con- vened by the Department of Economic Development. A quarterly schedule for these meetings will be provided to the CEOs. -- Contractors are required to immediately notify by telephone the Department of Economic Development Director's office of .any calls, inquiries or visits by the media. C. Contract Violations Deviation or failure to comply with any of the regulations and/or guidelines and/or any section of sub -section of the City/CBO agreement, shall be considered a violation of the agreement. The City will convene a meeting with the CBO to discuss the violations prior to taking final action in terminating the agreement. In the event that the agreement is cancelled, the City will recapture all unexpended and unencumbered funds. D. Contract Termination Either party may terminate this contract by giving written notice specifying the effective date. The City may termi- nate the CBO's contract in whole or in part for cause which shall include: 1. Failure, for any reason, of the CBO to fulfill in a timely and proper manner its obligations under this contract, including compliance related to the Policies and Procedures Manual for Community Based Organizations and to all future contract directives. 2. Submission of reports that are incorrect or in- complete in any material. 3. Ineffective or improper use of funds. 4. Failure to generate the required revenue of 25% ($6,250) of the second half of the contract's funding by January 1, 1983. In the event that notice is given that the contract is being terminated, the CBO shall immediately cease and terminate any and all activities including but not limited to divesting itself and any subsidiary(s) of specific assets and/or projects. Upon demand by the City, any and all accumulations thereon shall be delivered to the City and become the sole property of the City. -3- qk II. IMPLEMENTING THE CONTRACT A. Start-up Procedures The CBO will provide the Department of Economic Develop- ment (DED) with the following information prior to start-up (disbursement Of funds): 1. A current copy of the Articles of Incorporation, Charter and By -Laws. 2. List of present Principal Governing Board Officers and Members of the Board (names, addresses and telephone numbers). 3. List of key staff persons, with their titles, who will be responsible for carrying out the program. 4. Copy of current Fidelity Bond (applicable for all persons who are authorized to receive and disburse • funds under this contract). 5. Completion of CBO Representatives Authorized To Receive And Disburse Funds Form (Exhibit I). 6. Completion of Statement Attesting To The Establishment And Maintenance Of An Accounting System Form (Exhibit II). 7. CPA letter verifying the CBO's Accounting System or current Audit Report (which verifies the Contractor's internal controls as adequate to safeguard the organi- zation's assets). S. Management By Objectives Work Program and a Line -Item - Budget (approved by the City). 9. Proof of Workman's Compensation Insurance. 10. Contractor's Corporate Seal (to be affixed to Signatories Page). 11. Approved Personnel Policies and Procedures. B. Implementing a Financial System 1. Internal Financial Control a. Petty Cash A Petty Cash fund, in an amount not to exceed $75.00, should be established for the purpose of -4- making small expenditures which are necessary to carry on the program's operations. They are not to be used for cashing personnel checks or co - mingled with personal funds. The procedures outlined below are to be followed by all persons who handle petty cash funds. -- Petty Cash funds shall only be utilized for the payment of minor accounts, i.e., parking receipts, toll receipts, etc., which cannot conveniently be made from checks. The maximum amount that can be paid through petty cash shall be fifteen dollars ($15.00) per trans- action. -- A petty cash voucher shall be required for all disbursements of petty cash. The voucher shall be authorized by the Program Director for payment. -- Unannounced Petty Cash fund audits may be conducted by City personnel at any time. b. Purchasing -- Purchasing of capital goods in an amount ex- ceeding $50.00 must have prior City written approval. c. Control of Checking Accounts -- Separate bank accounts shall be established for those organizations having multiple fund- ing sources (i.e., City, County, State, Asso- ciation dues, etc.). -- The Organization's Board of Directors shall authorize those persons who will sign checks. This authorization shall be transmitted, in writing, to the City through the Department of Economic Development. All checks will be signed by two persons --those persons desig- nated by the Board of Directors. (See :xhibit I) -- Checks shall be pre -numbered and accounted for by number. -- Checks shall be signed at the time of payment and no blank checks shall be signed. -5- N "A making small expenditures which are necessary to carry on the program's operations. They are not to be used for cashing personnel checks or co - mingled with personal funds. The procedures outlined below are to be followed by all persons who handle petty cash funds. -- Petty Cash funds shall only be utilized for the payment of minor accounts, i.e., parking receipts, toll receipts, etc., which cannot conveniently be made from checks. The maximum amount that can be paid through petty cash shall be fifteen dollars ($15.00) per trans- action. -- A petty cash voucher shall be required for all disbursements of petty cash. The voucher shall be authorized by the Program Director for payment. -- Unannounced Petty Cash fund audits may be conducted by City personnel at any time. b. Purchasing -- Purchasing of capital goods in an amount ex- ceeding $50.00 must have prior City written approval. c. Control of Checking Accounts -- Separate bank accounts shall be established for those organizations having multiple fund- ing sources (i.e., City, County, State, Asso- ciation dues, etc.). -- The Organization's Board of Directors shall authorize those persons who will sign checks. This authorization shall be transmitted, in writing, to the City through the Department of Economic Development. All checks will be signed by two persons --those persons desig- nated by the Board of Directors. (Soo T:xhibit I) -- Checks shall be pre -numbered and accounted for by number. -- Checks shall be signed at the time of payment and no blank checks shall be signed. -5- -- When checks are voided, the signature area shall be removed. -- Bills shall be stamped "PAID" after payment has been made to avoid duplicate payment. The number of the check used for payment shall be recorded onthe invoice. 2. Establishment of an Accounting System. a. Accounting System All contractors should maintain a double entry accounting system. b. Statement of an Accounting System (Exhibit II) A letter from a CPA firm verifying that the Con- tractor's internal controls are adequate to safe- guard the organization's assets is a requirement by contract. This statement shall be provided to the Department of Economic Development by a reputa- ble accounting firm prior to each contract year. C. Reporting Expenditures Expenditures are reported on a monthly basis in the form of an Expenditure Report (Exhibit IV) submitted with each reimbursement package. In- structions for preparing this Expenditure Report, as well as the Reimbursement Packages, are dis- cussed in Section III. d. Fidelity Bonding All CBO's must obtain fidelity bonding for their employees. Proof of bonaing must be submitted to the City prior to execution of the contract. The amount of bonding should be an amount equal.to or greater than the maximum amount of cash held at any one time: $10,000. CBO's shall provide fidelity bonding for all staff persons as follows: 1) Directors, officers and staff persons who are authorized by the Department of Economic De- velopment to account for property, to autho- rize expenditures, to request cash advances and reimbursements, to receive or deposit funds into program accounts, to issue finan- cial statements, checks or other instruments of payment for program costs, to sign checks on behalf of the agency, to personally receive checks from the Department of Economic Devel- opment or to otherwise handle funds. Qlm rl 2) This requirement shall be fulfilled through the purchase of a blanket fidelity bond. If a blanket bond cannot be purchased, then a po- sition bond should be obtained. If a position bond cannot be secured, each person shall be individually bonded for the full amount of bonding required., 3) The amount of bond, whether issued through a blanket bond, position bond or individual bond, shall be equal to or greater than the following amount: $10,000. c. Implementing a Personnel System 1. All Community Based Organizations will be required to develop and submit to the City a set of Per- sonnel Policies as approved by their Board of Di- rectors prior to contract initiation. These person- nel policies will include, but not be limited to, pay schedules, fringe benefits, resumes for contract staff, method used to compute vacations and ill time, working hours, office procedures, paid holidays, computation of wages, job descriptions to include qualifications for job, an affirmative action plan, an equal employment op- portunity statement, disciplinary procedures and method, format for and frequency of employee evaluations. 2. Enrollment of staff is handled at the organizational level and must be in compliance with the personnel policies adopted by each organization. -7- 1' III. MAINTAINING THE CONTRACT A. Advances Initially, each Community Based Organization will receive an advance, in an amount to be determined by its con- tract, to cover operating expenses and allow a mod- erate cash flow. Advances are to be requested in writing to the City's Department of Economic Development two (2) weeks prior to the effective date of the contract to allow time'for processing. In the event that additional advances are needed during the year, requests should be made to the City, in writ- ing, stating the specific reason for which the advance is requested. Such requests will be considered on an indi- vidual basis and will not be automatically approved. B. Reimbursement Packages Contractors are to submit reimbursement requests on a monthly basis. The following procedures apply to the reimbursement process: 1. Reimbursement Packages are to be turned in to the Department of Economic Development by no later than the fourth working day ofeach month. Turn around time for processing a reimbursement is seven (7) working days, provided they are turned in no later than noon Thursday of the first week. That is, if the package is submitted on a Thursday, the check should be issued by the City's Finance Department on Friday of the following week. 2. Reimbursement Packages are to be submitted on the following forms provided by the City with all supporting documentation attached: a. Reimbursement Request Form The Reimbursement Request Form (ExhibitllI) is the cover page of the package which certifies that the attached documentation has not previously been submitted for payment. In addition, it states the amount to be reimbursed and the dates covered. b. Expenditure Report Form The Expenditure Report Form (Exhibit IV) divided into four columns: Line Item Descrip- tion, Approved Budget, Actual Expenditures Year -to -Date, and Actual Expenditures for Period. Descriptions of each of the four columns follows: -a- J-N �1 1) Line Item Description_ Column :his column details the approved budget Line items. 2) Approved Budget For Fiscal Year Column This column remains constant throughout the course of the con- tract unless line item changes are submitted and approved by the City. The column shows the organization's budget in line item format as ap- proved. 3) Actual Expenditures Year -to -Date Column V_ This column accumulates the expendi- tures throughout the course of the contract. For example, the first month of the contract might show $500 for Rent -Space and the second month's rent would show $1,000 after the second month's rent has been paid. 4) Actual Expenditures for Reporting Period Column This column details by line item the expenditures incurred during the current period. The total amount of this column will always equal the total amount of reimbursement request. c. Payroll Reimbursement Schedule The Payroll Reimbursement Schedule Form (Exhibit V) shows the amount of wages, de- ductions, net amount received by employ- ees, and check number issued. The total amount of gross wages will be the amount that is entered next to Salaries & Wages in the Expenditure Report while the total amount of FICA taxes Will be the amount entered next to FICA taxes on the same report. A distinct and separate Payroll Reim- bursement Schedule form is to be prepared for each pay period. d. Long Distance Phone Calls If a contractor wishes to be reimbursed for long distance telephone calls, a Long Distance Telephone Log shall be maintained by each con- tractor and submitted with the monthly reimburse- ment request (See Exhibit VI). -9- e& �A e. Damaged or Stolen Capital Equipment If capital equipment which was purchased with contract funds is damaged or stolen, the con- tractor shall: 1) Contact the City of Miami Police Department and obtain a police repast within twenty-four (24) hours after the contractor becomes aware that the equipment has been stolen or damaged. 2) Notify the Department of Economic Development in writing within forty-eight (48) hours. f. Supporting Documents All expenditures are to be justified by supporting documents, that is, cancelled checks (front and back) and original invoices. Specifically, the fol- lowing requirements must be met. 1) Both cancelled checks and original invoices must show the code of the account being charged. 2) In case that an invoice is paid by various funding sources, a copy of the invoice may be submitted but must indicate the exact amount paid by various funding sources equaling the total of the invoice. 3) Supporting documents must be attached in account code ascending order. 4) Time sheets must be attached to the Payroll Reim- bursement Schedule as supporting documents. 5) Two (2) complete and separate packages are to be submitted. One package will contain all the origi- nal documents (invoices, time sheets, etc.) with the exception of cancelled checks for which copies are acceptable. The other package will be identical with the exception that copies instead of original supporting documents will be included. C. Contract Modification Requests Contract modification requests are requested revisions to the CBO's contract. Contractors are allowed to request modification of their contracts three times during the fiscal year. Contract modification requests will be accepted between the fifteenth (15th) day and the last day of the following months: September, December, March. These modifications may include: --Contract Modification Request - increasing or decreasing the effective period of performance or requesting changes in the body of the contract (See Exhibit VII). --Budget Modification Request - increasing or decreasing the maximum allocation of funds or changing line items (See Exhibit VIII). -10- V i� --Management By Objectives Modification Request - changing or modifying the approved Work Program (See Exhibit X). 1. The policies which pertain to contract modifi- cations are as follows: a. All contract modifications require the prior approval of the Department of Economic Develop- ment. b. Funds affected by the contract modification shall not be expended until approval has been granted. c. Funds expended prior to approval of a contract modification shall be the responsibility of the CBO and shall not be reimbursed by the Depart- ment of Economic Development. d. The effective period of performance shall not extend beyond June 30th of the fiscal year. 2. The procedures for processing contract modifications are as follows: a. The CBO shall submit a written request for a con- tract modification within the prescribed timeframes. b. The written request shall include the following information, where appropriate: 1) A Contract Modification Request Form which in a narrative form describes the reason(s) for the increase/decrease in the effective period of per- formance of for changes to the contract instrument. 2) A Management By Objective (MBO) Modification Request form which reflects changes in the monthly planning events. 3) A Budget Modification Request which requests line item changes with appropriate budgetary forms. 4) All revised forms shall be signed and dated by one of the two persons authorized to sign the contractual agreement between the City and CBO since approved contract modifications will be included as an integral part of the contract. -11- 5) After submission to the Department of Econo- mic Development, the contract modification will be reviewed and approved or disapproved by written notification within ten working days after the request date. D. Items Requiring Prior Approval The following items require prior approval by the Department of Economic Development; 1. Capital Equipment Requests In accordance with the contract, any purchase of capital goods exceeding $50 must have written approval by the Department of Economic Development prior to taking effect. In addition, three (3) bids must be submitted to the City when requesting approval for capital expen- ditures over $50. 2. Out -of -Town Travel Requests for out-of-town travel must be submitted to the City at least two (2) weeks prior to the scheduled trip. In addition, funding must be available within the "Travel" line item before a travel request is approved. In the event that funds are not available in the Travel Account, appropriate line item changes must be made and justified in accordance with the provisions out- lined in this manual. a. Allowable Travel Expenses Cost of air fare, land transportation, hotel accommodations and meals (no alco- holic beverages) are allowable expenses. All expenses must be supported by re- ceipts. b. Unallowable Travel Expenses Reimbursement will not be made for personal long distance telephone calls, valet service, laundry, alcoholic beverages or side trips.. 3. Subcontracts In accordance with Section 4.8 of the City/CBO's contract, none of the work or services of Community Based Organizations shall be subcontracted without prior written approval of the City. This includes account- ing services and other professional services. • -12- �r E. Annual Inventory The Department of Economic Development will conduct an annual inventory of all capital equipment purchased by the contractor with City funds. The contractor will be given 10 days notice prior to the annual inventory. The Contractor shall establish and maintain a property control system and shall be responsible for maintaining a current inventory on all capital items purchased with City funds. F. Monitoring Visits The Department of Economic Development will conduct on -site monitoring visits of each contractor on a monthly basis sche- duled each quarter. These monitoring visits will include an in-depth investigation of the contractor's books of account and a review of the status of the management by objective work program. Exit interviews will be held with the project director and a Corrective Action Plan will be required for any contractor found out of compliance in fiscal or programmatic areas. G. Management By Objective Work Programs Contractors are required to gain approval for their manage- ment by objectives work program prior to contract initia- tion. These programs enumerate the various program objec- tives and activities that the contractors will be responsible for implementing during the term of their contract. Contractors will be required to submit a monthly management by objectives status report on the accomplishment of the activities scheduled for the month. These reports are due by the fifth (5th) working day of each month. H. Public Information Materials All contractors shall prominently incorporate the name of the City of Miami Department of Economic Development when developing radio and television coverage and any form of media, press release or public information materials per- taining to the execution of the contract. The contractor must abide by affirmative action regulations in informing residents of the geographical area to be served, of services to be offered by utilizing any available means for advertisement, as necessary for recruitment and outreach. All literature, advertising, publicity or promotion regarding the contractor's activities will be submitted to the City for review and approval prior to the release or distribution. No press conference will be scheduled without prior written notice to the City. -13- J,\ 10 IV. CLOSING DOWN THE CONTRACT A. Administrative/Financial Procedures for Close - Out for Organizations Going Out of Business In the event that an organization must be closed down (voluntarily or non -voluntarily) the following close-out procedures must be followed. In addition, the organization shall be responsible for submitting all re- quired paperwork to the Department of Eco- nomic Development no later than 45 calendar days subsequent to the close-out date. 1. Payroll Taxes The organization shall be required to calcu- late all payroll taxes due through the last day of the program. 2. Notification to Creditors The organization shall contact all creditors and make arrangements for final payments. 3. Notification to Contractors/Subcontractors The organization shall provide in writing cancel- lation notices for leased office space, as well as other equipment on rental agreements (copiers, typewriters, etc.) and to all subcontractors. 4. Payment to Employees Employees are to be paid for their regular wages up to the date of closing. In addition, payment must be made for accrued leave in accordance with the organization's Personnel Policies. S. Deposits for Rent, Electricity, Phone, etc. Any deposits that had been made must be recu- perated prior to the closing date and prior to the preparation of the final Expenditure Report. Adjustments must be made on this report to reflect refunds. These refunds must be deposited in the bank account and included in the final check due the City. -14- 6. Final Financial Report Expedience in obtaining all paid invoices as well as cancelled checks is essential. Upon com- pilation of all documents, a final Expenditure Report (Exhibit VI) must be submitted showing the total amount expended by the program. Any monies remaining after payment of all obligations shall revert to the City and a check payable to the City of Miami for the unexpended monies should be prepared and forwarded to the Department of Economic Development. B. Preparation of Records for Storage 1. If the CBO is part of an entity which is not solely dependent on City funding, the program will not be required to box its records for storage. The program will be required, however, to maintain its records at its place of business for a period of three (3) years after the date of termi- nation. 2. If the CBO is not part of a continuing entity or does not wish to maintain its records at its place of business for the required three (3) years, the following procedures must be implemented. a. Paperwork shall be separated by fiscal year in the event that the project has operated with City funds for more than one (1) year. b. Paperwork shall be neatly placed in file storage boxes with lids measuring 15 inches long by 12 inches deep. c. Paperwork shall be filed in the following order: 1) Financial records, including contracts, subcontracts, leases, etc. 2) Program correspondence. 3) Programmatic records. -15- 1, 3. All boxes shall be marked in a way that clearly indicates their contents. There shall also be, taped to the top of the box lid, a complete listing of records con- tained in the box. 4. Upon completion of the preparation of re- cords for storage, the organization shall notify the City and arrange for pick-up of the records. C. Disposition of Capital Equipment 1. CBO's shall insure that property purchased with funds obtained from the City is ac- countable. 2. All capital equipment purchased with City -provided funds must be turned in to the City upon termination of the program. • 3. The Department of Economic Development will make arrangements for capital equip- ment pick-up, as well as for inventory of the same. 4. In the event items are missing and have been determined to be stolen, the CBO will provide the City with copies of the Police Reports. D. Close -Out Procedures For End of Fiscal Year Contractors are to submit a final reinburseuent package within forty-five (45) days of contract termination for the end of the fiscal year. -16- V. EXHIBIT SUMMARY I. LBO Representatives Authorized To Receive And Disburse Funds Form The use of this form has been described in Section 11. A.S. of the manual. A sample form has been included in this section as Exhibit I. II., Statement Attesting To The Establishment And Maintenance Of An Accounting System Form The use of this form has been described in Section II.A.6. A sample form has been included in this section as Exhibit II. III. Reimbursement Request Form The use of this form has been described in Section III. B.2.a. of the manual. A sample form has been included in this section as Exhibit III. IV. Expenditure Report Form The use of this form has been described in Section III. B.2.b. of the manual. A sample form has been included in this section as Exhibit IV. V. Payroll Reimbursement Schedule Form The use of this form has been described in Section III. B.2.c. of the manual. A sample form has been included in this section as Exhibit V. VI• Long Distance Telephone Log Form The use of this form has been described in Section III. B.2.d. of the manual. A sample form has been included in this section as Exhibit VI VII. Contract Modification Request Form The use of this form has been described in Section III. C. of the manual. A sample form has been included in this section as Exhibit VII -17- VIII. Budget Modification Request Form The use of this form has been described in Section III. C. of the manual. A sample form has been included in this section as Exhibit VIII. IX. Management a Objectives Modification Request Form The use of this form has been described in Section III. C. of the manual. A sample form has been included in this section as Exhibit IX. -18- I" I EXHIBITS EXHIBIT I ' DEPARTMENT OF ECONOMIC DEVELOPMENT CBO REPRESENTATIVES AUTHORIZED TO RECEIVE AND DISBURSE FUNDS Name: Title: Address: Phone: Make checks payable to the order of: (Signature of First Authorized Repre- sentative) (Signature of Second Authorized Repre- sentative) Authorized By: President, Board of Directors Date Signed 0 4N f EXHIBIT II DEPARTMENT OF ECONOMIC DEVELOPMENT STATEMENT ATTESTING TO THE ESTABLISH- MENT AND MAINTENANCE OF AN ACCOUNTING SYSTEM I am the chief financial officer of and, in this capacity, I will be responsible for providing financial services adequate to insure the establishment and maintenance of an accounting system for the use of the funds. The accounting system will have internal controls adequate to safe- guard the assets of such agency, check the accuracy and reliability • of accounting data, promote operating efficiency and encourage com- pliance with prescribed management policies of the Agency. (Signature of Chief Financial Officer) Date Signed 4\ EXHIBIT II DEPARTMENT OF ECONOMIC DEVELOPMENT STATEMENT ATTESTING TO THE ESTABLISH- MENT AND MAINTENANCE OF AN ACCOUNTING SYSTEM I am the chief financial officer of and, in this capacity, I will be responsible for providing financial services adequate to insure the establishment and maintenance of an accounting system for the use of the funds. The accounting system will have internal controls adequate to safe- guard the assets of such agency, check the accuracy and reliability • of accounting data, promote operating efficiency and encourage com- pliance with prescribed management policies of the Agency. (Signature of Chief Financial Officer) Date Signed DEPARTMENT OF ECONOMIC DEVELOPMENT REIMBURSEMENT REQUEST ATTENTION: CONTRACTOR• PROGRAM: DATE: EXHIBIT I'.II We request reimbursement in the amount of $ for funds expended through Please be aware that invoices and payroll records to substantiate the above expenditures are attached. I certify that all of the supporting invoices have been paid and none of the items have been previously reimbursed. X11 of the expenditures comply with the authorized budget and fall within the contractual scope of ser- vices and all of the goods and services have been received for which reimbursement is requested. Yours truly, Project Director Attachments DEPARTMENT OF ECON,. CONTRACTOR: EXPENDITURE REe PROGRAM: PERIOD COVERED: DATE PREPARED: LINE ITEM DESCRIPTION (Use APPROVED BUDGET *ACTUAL EXPENDITURES ACTUAL EXPENDITURES line —items approved for this FOR FISCAL PERIOD YEAR—TO-DATE FOR REPORTING PERIOD program) A& TOTALS PREPARED BY APPROVED BY *Year to date column increases every month. DEPARTMENT OF ECONO.. AT PAYROLL REIMBURSEMENT . .E EMPLOYEE INFORMATION PERIOD COVERED: CONTRACTOR: PREPARED BY: PROGRAM: APPROVED BY: DATE PREPARED: PAYROLL NAME AND JOB TITLE SOC. SECA GROSS FICA W. H. NET CHECK NO. TOTAL Employers Contribution (FICA) Workman's Compensation State Unemployment TOTAL PAYROLL REIMBURSEMENT Fa is LONG DISTANCE TELEPHONE LOG DEPARTMENT OF ECONOMIC DEVELOPMENT LOG FOR MONTH OF LOG KEEPER DEPARTMENT OF ECONOMIC DEVELOPMENT CONTRACT MODIFICATION REQUEST FORM CONTRACTOR: DATE PREPARED: EXHIBIT VTI Dear This is to request a modification of the terms and conditions of our contract as follows: The justification for this request is as follows: Sincerely, Project Director DEPARTMENT OF ECONOMIC DEVELOPMENT BUDGET MODIFICATION REQUEST FORM CONTRACTOR: DATE PREPARED: EXHIBIT VIII Dear This is to request a modification of the following budget line items and amounts: Sub-Oject Codes To Be Reduced Sub -Object Codes To Be Increased Sub-Obj. Code Description of Code $ Amount Reduced Sub-Obj. Code Description of Code $ Amount Increased Total $ Amount Reduced Total $ Amount Increased The justification for this request is as follows: Sincerely, Project Director DEPARTMENT OF ECONOMIC DL.• )MENT MANAGEMENT BY OBJECTIVES MODIFICATION REQUEST FORM CONTRACTOR: OBJECTIVE i__ I LEGENDS On -going activity (extena a ianw��-••••-- ending dates). 0 Page of Completion CONTRACTOR: ACTIVITIES FOR MONTH OF DATE SUBMITTED* OBJECTIVE: ACTIVITY DEPARTMENT OF ECON, ELOPMENT MONTHLY MBO STATUS REPORT COMPLETED ZF NO,COMPLETE CORRECTIVE ACTION PLAN Yes or No x ve by the Sth working day of the month. *Monthly MBO Status Reports are d