2024-R-18 - CDBG Financial Management ProceduresRESOLUTION NO. 2024-R-18
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
EDGEWATER, FLORIDA ADOPTING AND UPDATING THE CITY'S
POLICY RELATING TO CITY FINANCIAL MANAGEMENT
PROCEDURES FOR USE IN ADMINISTERING COMMUNITY
DEVELOPMENT BLOCK GRANTS; PROVIDING DEFINITIONS;
DEFINING AN ACTION PLAN; AND PROVIDING AN EFFECTIVE
DATE.
WHEREAS, the City Council of the City of Edgewater on September 12-2022 adopted
Resolution 2022-R-28, a policy regarding financial management under the Ci_y's Community
Development Block Grants (CDBG) programs, and
WHEREAS, the City Council of the City of Edgewater desires to update its policy
regarding financial management under the City's Community Development Block Grants (CDBG)
programs, and
WHEREAS, the City Council of the City of Edgewater recognizes the need to update a
plan for financial management under the City's Community Development Block Grant (CDBG)
programs;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Edgewater Florida:
Section 1. The City Council hereby amends the City of Edgewater CDBG Financial
Management Policy, a copy of which is attached and incorporated herein as Exhibit "A"
Section 2. All conflicting purchasing policies are superseded by this policy.
Section 3. All resolutions or part of resolutions in conflict herewith are hereby repealed.
2024-R-18
Section 4. This resolution shall take effect upon adoption.
PASSED AND DULY ADOPTED this day of n 2024
C` Diezel Depew, Mayor
ATTEST-
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TTEST: k
di1216�tnik,'�CCity�Clerk
REVIEWED AND APPROVED: � V) )
Aaron R. Wol e City omey
2024-R-18
EXHIBIT "A"
2024-R-18 3
CDBG nas. pro . o.,......pry
Financial Management Procedures
ED GE WATER
Resolution No. 24- 2022 R 26
2024-R-18
Table of Contents
Introduction..............................................................................................................................................1
Responsible Party and Responsibilities.........................................................................................1
G
9Necessary Costs
0
2024-R-18
2024-R-18
Introduction
The City of Edgewater (the City) will manage all financial aspects of the City's the CDBG DR
CDBG awards by ensuring that its financial systems and staff are structured in a manner that
ensures optimal accountability and adheres to federal and state accounting requirements.
All CDBG CDBG DR awards will be included in the City's budget. A staffing system will be
structured that ensures, to the extent possible, segregation of duties in the financial
processes.
In instances where non-CDBG (;PBG DR funding will be used with CDBG CDBG DR funding,
the funding sources and uses will be clearly represented as separate funding streams and
expenses in the City's accounting systems. The City's accounting system or subset of the
same will be structured in a manner that reports budget to actual expenditures, detailed
check/expenditure registers, and cash balance reporting and expenditures by request for
funds.
Responsible Party and Responsibilities
The City acknowledges that it is solely responsible for the financial management and control
of CDBG CDBG DR funds it receives. This document is the City's accounting procedures that
will be followed to comply with state and federal requirements for financial management.
The City will maintain a financial management system that provides the following:
• Effective control over and accountability for all funds, property, and other assets
• Accurate, complete, and timely disclosure of the status and financial results in
accordance with specified requirements
• Records that adequately identify (by activity) the source and use of funds for each
CDBG CDBG PR — supported project, including "reasonableness, allowability, and
allocability" of costs
• Procedures to comply with the timely distribution of funds
The City's CDBG responsibility is divided between the local CDBG program administration
office that has primary responsibility for CDBG GBBG DR program administration and the
finance officer. The City's program administration office along with City management are
responsible for reviewing and approving all transactions involving CDBG GDBGDR funds
before the transactions are processed by the finance officer. The administrative and
management offices' responsibilities include the following:
• Approval of purchase orders (where applicable) and contracts to be paid with CDBG
CDBG DR funds
• Receipt and approval of invoices
• Assurance that transactions involving CDBG GDBGDR funds are properly coded
• Review of and approval of requisitions for payments involving CDBG CDBG DR funds
The finance officer is responsible for maintaining official CDBG CDBG DR financial records
and for posting account transactions. Official records will be maintained in either an
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Resolution 2024 R-18 2022- R 28
automated or a manual format. The finance officer's responsibilities also include the
following:
• Control of accounting documents once they are approved for processing by the
program department
• Preparation of financial reports (based on accounting records)
• Preparation of Requests for Funds (prepared in conjunction with the administration
office)
• Entry of transactions into the accounting system
• Assisting the City's auditor in preparing an annual financial audit
The City will be familiar with and adhere to the applicable Federal requirements to financial
management found in 2 CFR 200; and will review this regulation for more detailed and
additional information when financial management questions arise, including special
circumstances.
Specific steps for processing payments and obtaining reimbursements from
FloridaCommerce include:
• Invoices are received by the City Public Works Project Coordinator and are
forwarded to the CDBG Grants Administrator and to the CDBG Project Engineer.
• The Grants Administrator reviews all invoices and approves. The Grants
Administrator additionally confirms with the Project Engineer that all work has
been completed as outlined in the invoices for construction and reviews contractor
payrolls for Labor Standards compliance. Once reviewed and approved the Grant
Administrator returns the invoice to the Project Coordinator.
• The Project Engineer reviews all invoices and approves. The Project Engineer
additionally confirms that all work has been completed as outlined in the invoices
for construction. Once reviewed and approved the Project Engineer returns the
invoice to the Proiect Coordinator for City approvals.
• The Project Coordinator approves the invoice and forwards to the Public Works
Director for approval.
• The Public Works Director reviews and approves the invoice and returns to the
Project Coordinator.
• The Project Coordinator forwards the invoice to the Accounts Payable Clerk in
Accounting Department who enters the invoice into the Accounts Payable module of
the City's financial management system (Navaline/Central Square). Invoices are
coded to a specific expenditure account numbering series established to track
expenditures against individual CDBG Subrecipient Agreement budgetary line items
(Implementation. Engineering. Construction)?
• The Accounting Clerk reviews, prints the check for the vendor and takes it to the
City Manager for review and signature of the check.
• The City Manager signs the check and returns it to the Accounting Clerk for
mail in 2/distribution.
• The Accounting Clerk prepares the check for mailing/distribution to the vendor.
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Resolution 2024 R-18 2022 ,�22 R 28
• Grants Administrator/Accountant assists City preparation of request for
reimbursement to FloridaCommerce* and updates the CDBG financial spreadsheet
• The City's in-house Grants Administrator submits the request for reimbursement
package to its designated FloridaCommerce grant manager for pre -approval•
• Following pre -approval by the FloridaCommerce grant manager of the City's
reimbursement package. the City's authorized S E R A user submits the approved
package to FloridaCommerce through the S E R A system for reimbursement• and
• For CDBG receipts received as reimbursements. CDBG funds are distributed into the
General Fund Account to replace funds expended In instances when the City receives
CDBG funds in advance (prior to checks being distributed to vendors), CDBG funds
are received into the General Funds account and are transferred to a non-interest
bearing CDBG account from which checks are written and funds distributed to
vendors.
In instances when budget amendments are necessary to the City's CDBG Subrecipient
Agreement, the following steps are taken:
o A letter of request for budget amendments is prepared by the City and
submitted to the FloridaCommerce grant manager for review and preparation
of an amendment to the Subrecipient Agreement:
o Following preparation by FloridaCommerce of the amendment and receipt by
the City of the same. the City's Mayr signs and dates the amendment and the
amendment is returned to FloridaCommerce:
o Following FloridaCommerce execution of the amendment the City's
Accounting Department amends the budget line items in the City's financial
management system (Navaline/Central Square) to align with the amended
budget in the CDBG Subrecipient Agreement
Monitoring
The City will be prepared and have the necessary documentation available for
FloridaCommerce BEA monitoring of its financial system and financial transactions and
understands that FloridaCommerce DEO staff will utilize the following (or similar) testing
tools, which are based on HUD's monitoring checklists:
the Financial Management I Monitoring Checklist: System Review Checklist is
typically utilized for the first pre -award and the initial onsite monitoring of financial
management to review the City's:
o internal controls,
o separation of duties,
o the accounting system used by the City, and
o the procedures for determining allowable costs and housing escrow accounts.
Financial Management 11 Monitoring Checklist: Transaction Testing Checklist is
typically utilized at the second onsite monitoring visit to review the City's:
o accounting records and checks a sampling of invoices,
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Resolution 2024 R -I8 20.22"'•� "'8
contracts,
distributions, and bank statements to ensure that the local government is
complying with federal regulations and state laws.
These checklists are located on the FloridaCommerce D90 website. The City will respond in
a timely manner to any potential FloridaCommerce DW financial monitoring findings or
concerns.
Internal Controls
Internal controls consist of policies and procedures, job responsibilities, qualified personnel,
and records management that are designed to safeguard assets such as cash, property, and
other assets. The City will establish a system of internal controls that meets the following
minimum requirements:
• A single individual will not be allowed to exercise complete control over all phases of
any significant transaction. This means, for example, that the same person cannot
purchase materials, receive materials, authorize payment for the materials, and write
the check to pay for materials.
• Record keeping will be kept separate from operations and handling and custody of
assets.
• Monthly reconciliation and verification of cash balances with bank statements will be
made by employees who do not handle or record cash or sign checks.
• Actual lines of responsibility will be clearly established, and a single person identified
to assume responsibility for management oversight of the entire financial
management system.
• The City's Accounting Department shall on a monthly basis review and reconcile its
CDBG fiscal transactions reported in its bank statements to ensure continuity and
compliance with CDBG processes. budgets receipts expenditures, budget to actual
expenditures and alignment with its CDBG fiscal transactions as reported in its
financial management system (Naval ine/Central Square).
• The City's Accounting Department shall on a monthly basis, review and reconcile its
CDBG fiscal transactions reported in its financial management system
(Navaline/Central Square) to ensure continuity and fiscal alignment with the Office
of Long -Term Resiliency's Subrecipient Enterprises Resource Application (S.E.R.A.).
Additionally, the outside grant administration contractor shall maintain a financial
management spreadsheet that tracks receipts expenditures transaction tracking
cash control and budget to actual expenditures.
The person who prepares payrolls will not handle related paychecks. If signature stamps are
used, they will not be under the control of the same individual who retains blank checks.
The City's system of internal controls will outline specific program and financial
management responsibilities and will enable the City to maintain the necessary records
needed for compliance with Florida law and federal requirements. Where possible, the City's
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accounting policies and procedures will mirror the requirements of the Florida Office of the
Auditor General.
Financial System
The City will ensure that all source documentation for each transaction is adequately
maintained and provided upon request with all details deemed necessary by
FloridaCommerce 1390, the U.S. Department of Housing and Urban Development (HUD),
Florida's Chief Financial Officer, and Auditor General. The information contained in source
documents is necessary for accounting purposes and will be recorded in one of the books of
original entry before being filed. The City acknowledges that a variety of source documents
and records are needed to properly account for CDBG CD13G DR transactions.
Supporting documentation will demonstrate that costs charged against CDBG (;PBG DR
funds:
• were incurred during the effective period of the City's agreement with the state,
• were actually paid out (or properly accrued),
• were expended on allowable items, and
• had been approved by the responsible staff and official (s) for the City.
These documents include the following:
• Purchase Orders (if utilized) will be prepared in the same format as other purchase
orders except that appropriate CDBG ` PBG DR program classification data will be
coded on the document. Purchase orders, when utilized, will be approved by the City's
program office and other approver . After approval, one copy will be retained
by the program administrative office to verify receipt of goods, and remaining copies
must be forwarded to the finance officer.
• Contracts will be filed in the DBG GSR program administrative office. Each
contract will identify the activity, program, or project to be charged. If multiple
contracts are issued for each project or if non -contractual charges are recorded
against a project, a separate record will be maintained for each contract to provide
readily available information on contract balances. The City will ensure there is a
separate obligation for each contract relating to the same activity to prevent
overpayment of any contract. In addition, a Cash Control Register will be maintained
to provide summary information for all CDBG GDBG DR contracts.
• Vendor Invoices to be paid with CDBG CDBG DR funds will first be referred to the
program administrative office, compared to the purchase order, checked for
appropriateness and accuracy, approved, and coded, as necessary. Approved vendor
invoices and appropriate supporting documents will then be forwarded to the finance
officer for processing, entry into the financial system and payment.
• Weekly Time -distribution Sheets for all employees paid from CDBG (;PRC PR
funds. Employees will complete time sheets that indicate the number of hours worked
on CDBG CDR& PR projects, other grant projects, local government activities, and job
duties. Time sheets will then be referred to the finance department so that charges to
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Resolution 2024 R- 18 2022 R 28
the correct programs and projects can be computed and properly charged. The City
understands that payroll expenses can only be paid from CDBG GI)BG DR funds based
on time and attendance records.
CDBG Financial Files that demonstrate the program's financial soundness and
regulatory compliance. The City will maintain an orderly record of
CDBG-DR transactions that will withstand the scrutiny of FloridaCommerce BBG
monitoring and an audit. The City's financial files will be maintained in logical system.
Two broad categories of files will be utilized: process files and permanent files (see
below).
Space and Utilities: Costs for space will be supported by documentation such as
rental or lease agreements. Utility costs will be supported by bills from utility
companies. Both types of expenses will be supported by canceled checks. If the cost
of space or utilities is split between the CDBG CPBG PR program and other sources,
a reasonable method will be in place to allocate the charges fairly among the sources.
Supplies: Documentation for expenditures for supplies will include:
1. purchase orders or requisition forms initiated by an authorized representative of
the City,
2. invoices from vendors that have been signed off by the City to indicate goods were
received,
3. canceled checks from vendors demonstrating payment was made,
4. information regarding where supplies are being stored, and 5) for what cost
objective(s) the supplies are being used.
Process Files
Process files are working files that are used until source documents are processed and
posted. They include the following:
• Open Purchase Order File: All purchase orders that have been issued but not yet
filled by vendors will be filed sequentially by purchase -order number. When goods
are delivered, all invoices received, and all appropriate approvals obtained, the
purchase order will be removed and filed with related invoices and the receiving
report in the pending payments file. This file contains encumbrances against the
project budget.
• Pending Payments File: All source documents that will generate a cash
disbursement will be stored in the pending payments file and will be maintained by
due date. If a discount is offered for early payment, every effort will be made to make
the payment early. A schedule of bills payable from approved invoices and the
account to be charged will also be kept in this file.
• Pending Receipt File: This file will contain copies of outstanding bills and requests
for funds submitted to the CDBG GPBG-DR program that have not yet been recorded
in the Cash Receipts journal or posted to the CDBG GDBG Pli Cash Control Register.
Documentation will also include each completed request for funds package submitted
to FloridaCommerce DEG through SERA.
• Personnel Payroll File: This file will contain a record for each employee who works
on CDBG CDB(; 1) activities and includes the rate at which the employee's salary can
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Resolution 2024 R-18 .2022 R''' � 28
be charged to the CDBG CD13G DR program. Time sheets showing the amount of time
each employee spends on CDBG GDSG-PR activities will be kept on file. This file will
be maintained in addition to the local government's official personnel records.
Permanent Files
The City will maintain these files for all source documents and other records once they have
been processed and posted to books of original entry. Documents removed from process files
will be placed in the permanent files after all processing is complete (i.e., placing bank
verifications or CDBG CDBG DR contract payment transactions in a CDBG G])BG-DR Receipt
File).
Purchase requisitions, purchase orders, and related invoices are filed together; contracts,
related invoices, payment vouchers, and check copies are filed together; and grant fund
receipt documentation is filed together. Permanent files contain the documents necessary
for undertaking an audit of the program. For ease of FloridaCommerce DEO financial
monitoring, complete request for funds packages will be included in a permanent request for
funds (RFF) file.
CDBG Accounting Records
CDBG CDBG-DR records are used to accumulate CDBG GDBG DR accounting information for
financial reporting. The City will utilize and maintain the following required
CDBG CDBG-DR accounting records listed below.
• Cash -receipts journal: All receipts of cash that are deposited into the CDBG
CPRG DR account(s) will be recorded in the cash -receipts journal. Receipts may include
contract payments to the City from the CDBG GBRG DR program, receipts from the
disposition of land, program income, and any other CDBG related cash received. The
general procedure for using this journal will be to record everyCDBG GBRG-DR receipt
by date in the order that it was received and indicate the source of the funds received,
account or activity line item to be credited, receipt number, and date. A notation
regarding final disposition for all funds received will also be included in the journal.
• Cash -disbursements journal: The City will enter all expenditures for CDBG
GPBG DR program costs into the cash -disbursements journal. Disbursement entries will
include the names of the vendors, dates paid, purchase order numbers paid against, check
numbers, and references to the CDBG CDRG-DR program activities the disbursements
address.
• Property Register: The City will maintain a listing of all property acquired in part or
entirely using CDBG (;PRG DR funds. This list will be maintained to comply with state
and federal standards relating to acquisition, control, and disposition of real and personal
property. Examples of property that would be recorded in the register include both real
property and office equipment.
• Detailed Activity Ledger: To maintain accounting control, the City will establish and
utilize a detailed activity ledger that records all financial transactions, including receipts
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Resolution 2024 R -18----40224t-49
and expenditures, under a CDBG GI)BG PR agreement. In instances when the City has
several ongoing projects (e.g., Smith Street sewer -line installation and Jones Street
repaving), the City will maintain a separate project activity ledger, each relating to a
particular project in this ledger. The project activity ledgers will combine to create the
overall detailed activity ledger.
• Cash Control Register
In addition to the above control procedures, CDBG CDBG-DR financial reporting and
control, the City will utilize a CDBG &PBG PR Cash Control Register. This register will be
used to document and control the following:
o State of Florida funds received
o Requests for Funds (drawdowns on grant reservation)
o Balance of CDBG GPSG DR cash on hand
o Balance of CDB EP8G BR grant funds (budget balances) available by line item
o Collections, refunds, and miscellaneous receipts
o Disbursements
This register is critical because it summarizes the status of CDBG GPB6 PRcash on hand and
line -item budget balances. The City will review the Cash Control Register on a regular basis
to endure ongoing compliance with CDBG-GDBG-DR rules and regulations relating to cash on
hand. The register will also serve as a cross-reference to the journal accounts such as cash
receipts and disbursements and the detailed project ledger.
Accounting for Cash Receipts
Cash receipts for the CDBG GPBG-DR program come primarily from the state as contract
payments based on Requests for Funds. The City will log all CDBG GDBG PR project related
cash receipts from all sources including FloridaCommerce D99 and other sources in a Cash
Receipts Journal, a CDBG GDBG DR Cash Control Register, and a detailed Project Ledger.
Accounting for Cash Disbursements
The City will establish specific days on which it will disburse CDBG GDBG DR funds. The
frequency of these payment dates will depend on transaction volumes. To allow time for
orderly processing and requisitioning of CDBG GDBG DR contract funds, cut-off dates for
receipt of invoices to be paid in the next pay date will be established. The City will take
measures to ensure that all cash disbursements are supported by source documentation,
that fully explains and documents the reason for the disbursement. Examples of source
documentation include invoices, time sheets, and payroll vouchers.
Contractor payments will be made only after determining that the contractor is performing
in accordance with contract provisions and time schedules, that deliverables have been
completed, and that any problems identified by the City during compliance monitoring or
inspections have been corrected. that fully explain and document the reason for the
disbursement will record all cash disbursements in the CDBG Cash Disbursements Journal,
the CDBG Cash Control Register, and CDBG Detailed Activity Ledger.
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Resolution 2024 R-18 20 R 1" n 19
For infrastructure, public facility and some multifamily construction project, disbursements,
the contractor will be required to provide weekly signed certified payrolls to ensure
compliance with Labor Standards (Davis -Bacon, Copeland Act, and CWHSSA). The City's staff
or consultant will review the certified payrolls for compliance prior to any payments being
made to the contractor. Also, prior to payments being made to the contractor, the City's
engineer will conduct an onsite review of the work accomplished to date, compare the
accomplishments to the work reported in the contractor's invoice and will sign off on any
pay requests, certifying that the work reported by the contractor has been completed.
Prior to the final payment being made to the contractor, the City's engineer must inspect the
work site(s) and provide a Certification of Completion, and the City or its consultant will
confirm that all required documentation and reports from the contractor have been received
and are complete and in good order.
Allowable Costs
The standards for determining reasonableness, allowability, and allocability of costs
incurred as part of CDBG GDBG DR -financed activities are found in 2 CFR 200.403. According
to general guidelines contained in 2 CFR 200.403, a cost is allowable under the CDBG GDBG
DR -program as follows:
• The expenditure is necessary, reasonable, and directly related to the grant.
• The cost conforms with any limitations or exclusions established in 24 CFR 200
Subpart E (Cost Principles) or the DB GDBG DR award.
• The expenditure is consistent with policies and procedures that apply uniformly
to both federally funded and other activities of the state or the City.
• The cost is accorded equal treatment. For example, a direct cost cannot be
assigned if in other similar circumstances the cost was allocated as an indirect
cost.
• The cost is in accordance with generally accepted accounting principles, except
for states, local governments, and tribes only, as otherwise provided for in 2 CFR
200.416 and 2 CFR 200.417 (Cost Allocation Plans and Indirect Cost Proposals),
and 2 CFR 200.417 (Interagency Service).
• The cost is not used to meet cost-sharing or matching requirements of any
federally funded program. See 2 CFR 200.306(b) regarding cost sharing and
matching.
• Costs must be adequately documented. See 2 CFR 200.300 through 2 CFR 200309
for more information.
The City will ensure that all costs under the CDBG CD136 DR program are allowable as
outlined in 24 CFR 570 and the HUD's State Community Development Block Grant Program:
Guide to National Objectives and Eligible Activities, December 2014.
Necessary Costs
Costs must be necessary expenditures of Federal funding in order to meet program
objectives. Unnecessary costs are those that are not required to achieve the objectives of the
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Resolution 2024 R-18 2022 R28
CDBG CD13G DR agreement or not related to the CDBG CDBG DR program being
administered.
Reasonable Costs
Reasonable costs are described in 2 CFR 200.404: "A cost is reasonable if, in its nature and
amount, it does not exceed that which would be incurred by a prudent person under the
circumstances prevailing at the time the decision was made to incur the cost."
In determining reasonableness of a given cost, consideration must be given to the following:
• Whether the cost is of a type generally recognized as ordinary and necessary for
the operation of the non-federal entity or the proper and efficient performance of
the federal award
• Restraints or requirements imposed by such factors as sound business practices;
arm's-length bargaining; federal, state, local, tribal, and other laws and
regulations; and terms and conditions of the federal award
• Market prices for comparable goods or services for the geographic area
• Whether individuals concerned acted with prudence in the circumstances
considering their responsibilities to the non-federal entity, its employees, its
students or membership (where applicable), the public at large, and the federal
government
• Whether the non-federal entity significantly deviates from its established
practices and policies regarding incurrence of costs, which may unjustifiably
increase the federal award's cost.
The City will ensure that all costs under the CDBG CDBG 81t program are reasonable.
Allocable Costs
Allocable costs are described in 2 CFR 200.405: "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:
• Is incurred specifically for the federal award;
• 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
• 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 (2 CFR
200, Subpart E, Cost Principles).
The City will ensure that all costs under the CDBG CDBG AR program are allocable.
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Resolution 2024 R-18-�---"''_' R :29
Program Income
Program income is the gross income received by a state, a unit of general local government
(ULGL), or a subrecipient of a UGLG that was generated from the use of CDBG funds that
exceeds $35,000 received in a single year (24 CFR 570.489(e)2). Examples of program
income include the following:
• Proceeds from the sale or long-term lease of real property purchased or improved
with CDBG funds
• Proceeds from disposition of equipment purchased with CDBG funds
• Gross income from use or rental of property acquired by the City or its
subrecipient with CDBG funds, less the costs incidental to the generation of such
income
• Gross income from use or rental of property owned by the City or other entity that
was constructed or improved with CDBG funds, less any costs incidental to the
generation of such income
• Payments of principal and interest on loans made using CDBG funds
• Proceeds from the sale of loans made with CDBG funds
• Proceeds from the sale of obligations secured by loans made with CDBG funds
• Interest earned on program income, pending the disposition of such program
income
• Funds collected through special assessments made against nonresidential
properties owned and occupied by households not of low and moderate income,
where such assessments are used to recover all or part of the CDBG portion of a
public improvement
Program income received by a unit of local government must be recorded in its financial
records system and must be recorded in the same activity line item as generated the program
income. Program income must be spent first on subsequent expenditures.
The City will report any program income generated from CDBG projects in the Quarterly
Status Report. The City will return any program income generated after the closeout of the
CDBG CDBG DR agreement to FloridaCommerce DEO. The City also understands that any
program income generated prior to closeout must be returned to FloridaCommerce BEB,
unless the program income can be used for additional units ofDB Cin activities that
are specified in a modification to the agreement executed prior to the closeout. It is also
understood that program income included in the project by modification to the agreement
must be used in accordance with 2 C.F.R. part 200, 24 C.F.R. part 570.504 and the terms of
the CDBG CDBG-BR agreement.
Annual Audits
The City will maintain detailed and organized financial records and will be prepared to
provide the same to its auditor for annual audits. For years that the City expends $750,000
or more in federal funds, it will submit a Single Act or Program Specific Audit to
FloridaCommerce P90 and the Florida Auditor General no later than June 30. For years that
the City expends less than $750,000 in federal funds, it will submit a FloridaCommerce BEG
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Resolution 2024 R -I8 2022 ,R 28
Audit Certification Memo to FloridaCommerce DEB no later than June 30. Additionally, the
City will submit an Audit Compliance Certification (an attachment to the CDBG agreement)
no later than sixty calendar days following the end of its fiscal year. The City will respond in
a timely manner to any potential audit findings or issues and to any potential
FloridaCommerce BEA Audit Management Letters.
Common Deficiencies
The City is aware that the issues listed below are the most common record-keeping
deficiencies encountered during program monitoring and audits.
• Inadequate financial records
• Inadequate source documentation
• Inadequate procedures for verification of cost allowability
• Inadequate procedures for certifying operating agencies' financial systems
• Delays between drawdown and expenditure of funds
• Inadequate process to prevent overpayment of an activity budget line item
• Inadequate accounting of program income
• Inadequate or untimely financial reports
The City will take the necessary measures to be prepared and avoid these inadequacies.
CDBG Payments
Prior to transmission of contract funds, the City will complete and submit to the CDBG GBBG
DR program a Subrecipient Enterprise Resource Application (SERA) system Access
Authorization Form. The City understands that his form is used to inform FloridaCommerce
BEA of the names of persons permitted to sign Requests for Funds. Requests for Funds forms
will be signed by one or more of the City's authorized individuals identified on the form. The
Signature Authorization will identify the financial institution, its mailing address, telephone
number, and the account number to which CDBG GDBG DR funds will be transmitted.
The City understands there can be no erasures or corrections on the SERA Access
Authorization Form. The City will submit three copies, each having original signatures, to
FloridaCommerce DEB. In instances when it is necessary to change or update information on
the Signature Authorization Form, the City will follow the same instructions.
The City will ensure that there is no comingling of funds by placing
CDBG GDBGBR funds in a separate bank account or by demonstrating that its accounting
system has sufficient capacity and internal controls to separately track the receipts and
expenditures of the CDBG CDBG DR grant. For -CDB -G G-BBGDR projects that are funded
through an advance process, the City will ensure that these CDBG funds will be maintained
in a separate non-interest-bearing account. Any interest paid on the account will be remitted
to FloridaCommerce DEB for return to the U.S. Treasury.
The City will submit requests for funds through the FloridaCommerce DEA SERA system. To
ensure the timely expenditure of CDBG CDBG DR funds the City will submit requests for
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Resolution 2024 R-18'�^--'_'_' R is
funds on a regular basis and in accordance with the CDBG EDBG DR agreement's Scope of
Work, Project Detail Budget and Activity Work Plans. These request for funds will include a
signed invoice from the City as well as all contractor invoices, cancelled checks and other
documentation required by FloridaCommerce DEO that supports the expenditures reflected
in the City's invoice.
The City will not expend or obligate more than $5,000 for administration, prior to receiving
a Release of Funds from the CDBG EDBG DR program. The release will clearly state that
environmental conditions have been removed and funds have been released for expenditure.
Furthermore, the City will not draw funds for any activity that has been conditioned in the
contract agreement until a Removal of Special Conditions is granted by FloridaCommerce
DEB. The City will review its contract award agreement for special conditions prior to
obligating or requesting funds.
Record Keeping
In the simplest terms, CDBG financial transactions involve receiving cash (such as contract
funds from FloridaCommerce's DEBs CDBG EDB& -DR program or program income) and
spending cash for eligible activities. EveryCDBG &DEG DR financial transaction will be
recorded in the accounting records as soon as possible. The City will ensure timely and
accurate recording of financial transactions utilizing the appropriate source documents,
files, and accounting records. The City will maintain records a minimum of 6 years from the
date of the receipt of the final audit for the year in which the grant was closed out (2 CFR
200.333). The City understands that this period for records retention will be extended if any
litigation, claim, negotiation, audit or other action involving the records has been started
prior to the expiration of the controlling period. The City will provide access to these records
and audits to FloridaCommerce DEB, Florida's CFO, and the Auditor General upon request
for a period of six (6) years following the final audit, unless extended by FloridaCommerce
DEO. The City additionally understands that such extensions will be in place until the
completion of any associated actions and resolution of all associated issues have been
determined.
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