FLORIDA COMMISION ON COMMUNITY SERVICE

Finding Number 2019-002 CFDA Number 94.003 Program Title State Commissions Pass-Through Entity N/A Finding Type Noncompliance (Allowable Costs) and Material Weakness Questioned Costs $40,000 Finding The Commission expended funds for tenant improvements from federal sources and received a reimbursement for part of those costs in accordance with their lease agreement. This resulted in questioned costs totaling $40,000 for the reimbursed tenant improvements. Criteria In accordance with the Uniform Guidance, subpart E, section 200.406 Applicable credits: "Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect (F&A) costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate." Condition In the 2018-19 fiscal year, the Commission entered into a lease agreement for office space. The agreement provided the Commission with a tenant improvement allowance for up to $40,000. The Commission incurred costs exceeding the allowance and received the full $40,000 from the lessor. The Commission recorded the expenditures for these costs against the federal award and recorded the tenant improvement refund into an unrestricted fund. Cause Management indicated that the Commission needed a place to record these costs while they waited for the reimbursement from the lessor. Effect $40,000 of costs recorded to the federal award identified above are considered to be questioned costs. Recommendation The Commission should record a credit for the amount received to the federal award either as a cost reduction or cash refund, as appropriate.

Finding Number 2019-003 CFDA Number 94.003 Program Title State Commissions Pass-Through Entity N/A Finding Type Noncompliance (Allowable Costs) and Material Weakness Questioned Costs $39,474 Finding Unallocated costs from Commission to Foundation resulted in $39,474 of questioned costs for the State Commissions federal award. Criteria In accordance with the Uniform Guidance, subpart E, section 200.405 Allocable costs: "(a) A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non- Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart." Condition The commission was in the process of correcting a management letter comment from the prior fiscal year by performing a time study to identify which areas staff spent their time outside of their normal duties. This study found that more time was used on Volunteer Florida Foundation activities, a component unit of the Commission, then had been previously allocated. Management?s intent was to apply this method starting in the 2019/20 fiscal year, however when the study was applied to the current fiscal year the estimated amount was significant to the federal award. Cause The Commission does not have a process in place to track employee time and allocate expenses among the various departments. Effect An estimated $32,324 of employee payroll and related expenses were not properly allocated to the Volunteer Florida Foundation. Additionally, an estimated $7,150 of indirect overhead costs were not properly allocated to Volunteer Florida Foundation. A total of $39,474 of costs related to the award identified above are considered to be questioned costs. Recommendation Since the Commission and its component unit have various federal awards, state projects and public funding sources, it should implement a process to track employee time used for those areas and allocate the cost of that time accordingly. Additionally, the Commission should identify indirect cost centers and allocate those costs among the various departments based on a reasonable allocation method.

Finding Number 2019-004 CFDA Number 94.003 Program Title State Commissions Pass-Through Entity N/A Finding Type Noncompliance (Allowable Costs) and Significant Deficiency Questioned Costs $7,613 Finding Costs originally recorded for the State Commissions federal award were credited from the Florida Department of Emergency Management. The credit was not applied to the State Commissions federal award resulting in $7,613 of questioned costs. Criteria In accordance with the Uniform Guidance, subpart E, section 200.406 Applicable credits: "Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect (F&A) costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate." Condition The Commission utilized staff to work overtime in the Emergency Operations Center which was activated during Hurricane Irma in the 2017/18 fiscal year. The Commission submitted a request for reimbursement on costs that were originally recorded directly to the State Commissions federal award. The Commission received these funds in the 2018/19 fiscal year. These funds were recorded to unrestricted other revenue when received and not offset as a credit or refunded to the corresponding grant which they were originally paid from. Cause The Commission did specifically identify the time and related payroll expenses used to staff the Emergency Operations Center from other federal funds. Additionally, the grant period was closed w hen the funds were received. Effect Questioned costs were included in the amount of $7,613. The cost of staffing the Emergency Operations Center was paid for using State and Federal funds that were not intended to be used for the Emergency Operations Center. When those funds were received they were not applied as a credit towards those State and Federal funds. Recommendation The Commission should record a credit for the amount received to the federal award either as a cost reduction or cash refund, as appropriate. Actual funds expended for the Emergency Operations Center should be recorded to a separate fund and invoiced to the Department of Emergency Management.

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