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Reference Guide for State Expenditures

Department of Financial Services
Division of Accounting and Auditing
Bureau of Auditing
200 East Gaines Street
Tallahassee, Florida 32399-0355


TABLE OF CONTENTS

INTRODUCTION
DEFINITIONS
SUBJECT INDEX


INTRODUCTION

Authority

Article IV, Section 4(c), of the Constitution of the State of Florida states, “The Chief Financial Officer shall serve as the Chief Fiscal Officer of the State, and shall settle and approve accounts against the state.”

The powers and duties of the Chief Financial Officer* (CFO) are set forth in Chapter 17, Florida Statutes (F.S.). Section 17.03(1), F.S., requires that the CFO of this State, using generally accepted auditing procedures for testing or sampling shall examine, audit, and settle all accounts, claims, and demands against the State. Section 17.29, F.S., gives the CFO the authority to prescribe any rule he considers necessary to fulfill his constitutional and statutory duties, which include but are not limited to, procedures or policies related to the processing of payments from any applicable appropriation.

* Legislation will be submitted in the 2003 Legislative Session to conform these statutes to the Constitution.

Mission of the Bureau of Auditing

The primary responsibility of the Bureau of Auditing is to assist the CFO in performing his constitutional and statutory duties as the state's chief fiscal officer. This is accomplished by providing assurance to the taxpayers of Florida, through the effective and efficient pre-audit and post-audit of disbursements and other financial transactions, that funds are disbursed from the state treasury strictly in accordance with applicable laws, rules and administrative policies.

Purpose

The purpose of this manual is to provide staff of the Bureau of Auditing and state agencies guidance regarding the requirements applicable to the various categories of expenditures. The manual should provide the following benefits:

1. Provide a central source of research material that will enhance the consistency of the audit process.
2. Provide a vehicle for the dissemination of management policy and guidance.
3. Provide a document to assist in the training of new employees.

This reference guide cannot be expected to cover all situations that may be encountered. Some situations will have to be addressed on a case-by-case basis. The manual is intended to be a document that may be readily revised to meet changing conditions and requirements.

DEFINITIONS

Accountable Plan - an arrangement that reimburses an employee for business expenses.

Actual Point of Origin - the geographic location where the travel begins.

Agency Head - with respect to an agency headed by a collegial body, the executive director or chief administrative officer of the agency.

Appropriation - a legal authorization to make expenditures for specific purposes within the amounts authorized in the appropriations act.

Approved Operating Budget or Approved Budget - the plan of operations consisting of the original approved operating budget and statement of intent.

Artist - an individual or group of individuals who profess and practice a demonstrated creative talent and skill in the area of music, dance, drama, folk art, creative writing, painting, sculpture, photography, graphic arts, craft arts, industrial design, costume design, fashion design, motion pictures, television, radio, or tape and sound recording, or in any other related field.

Best Value - the highest overall value to the state based on objective factors that include, but are not limited to, price, quality, design, and workmanship.

Authorized Person:

(1) A person other than a public officer or employee as defined herein, whether elected or commissioned or not, who is authorized by an agency head to incur travel expenses in the performance of official duties.

(2) A person who is called upon by an agency to contribute time and services as consultant or adviser.

(3) A person who is a candidate for an executive or professional position.

Bureau - the Bureau of Auditing.

Cardholder - an individual issued a State of Florida Purchasing Card pursuant to the State of Florida Purchasing Card Program.

Commodity - any of the various supplies, materials, goods, merchandise, food, equipment and other personal property, including a mobile home, trailer or other portable structure with floor space of less than 5,000 square feet, purchased, leased or otherwise contracted for by the state and its agencies. "Commodity" also includes interest on deferred-payment commodity contracts approved pursuant to s. 287.063, F.S., entered into by an agency for the purchase of other commodities. However, commodities purchased for resale are excluded from this definition. Further, a prescribed drug, medical supply or device required by a licensed health care provider as a part of providing health services involving examination, diagnosis, treatment, prevention, medical consultation or administration for clients at the time the service is provided is not considered to be a "commodity." Printing of publications shall be considered a commodity when let per contract pursuant to s. 283.33, F.S., whether purchased for resale or not.

Common Carrier - train, bus, commercial airline operating scheduled flights or rental car of an established rental car firm.

Compensation - the total amount paid for professional services.

Competitive Sealed Bids, Competitive Sealed Proposals, or Competitive Sealed Replies - the process of receiving two or more sealed bids, proposals or replies submitted by responsive vendors and includes bids, proposals or replies transmitted by electronic means in lieu of or in addition to written bids, proposals, or replies.

Competitive Solicitation or Solicitation - an invitation to bid (ITB), a request for proposals (RFP), or an invitation to negotiate (ITN).

Chief Financial Officer or Department - the State of Florida, Department of Financial Services or its head, the Chief Financial Officer, and the terms shall have the same meaning and be used interchangeably.

Conference - the coming together of persons with a common interest or interests for the purpose of deliberation, interchange of views or for the removal of differences or disputes and for discussion of their common problems and interests. The term also includes similar meetings such as seminars and workshops, which are large formal group meetings that are programmed and supervised to accomplish intensive research, study, discussion and work in some specific field or on a governmental problem or problems. A conference does not mean the coming together of agency or interagency personnel.

Continuing Appropriation - an appropriation automatically renewed without further legislative action, period after period, until altered or revoked by the Legislature.

Contractor - a person who contracts to sell commodities or contractual services.

Contractual Service - the rendering by a contractor of its time and effort rather than the furnishing of specific commodities. The term applies only to those services rendered by individuals and firms who are independent contractors, and such services may include, but are not limited to: evaluations; consultations; maintenance; accounting; security; management systems; management consulting; educational training programs; research and development studies or reports on the findings of consultants engaged there under; and professional, technical, and social services. "Contractual service" does not include any contract for the furnishing of labor or materials for the construction, renovation, repair, modification or demolition of any facility, building, portion of building, utility, park, parking lot or structure or other improvement to real property entered into pursuant to Chapter 255, F.S., and rules adopted there under.

Convention - an assembly of a group of persons representing persons and groups, coming together for the accomplishment of a purpose of interest to a larger group or groups. A convention does not mean the coming together of agency or interagency personnel.

Disbursement - the payment for an expenditure.

Emergency Notice - notification of less than twenty-four (24) hours prior to scheduled departure.

Emergency Situation - circumstances in which there is an immediate danger or a threat of immediate danger to the public health, safety or welfare or of other substantial loss to the state requiring emergency action.

Exceptional Purchase - any purchase of commodities or contractual services excepted by law or rule from the requirements for competitive solicitation including, but not limited to, purchases from a single source; purchases upon receipt of less than two responsive bids, proposals, or replies; purchases made by an agency, after receiving approval from the department, from a contract procured, pursuant to s. 287.057(1), (2), or (3), F.S., by another agency; and purchases made without advertisement in the manner required by s 287.042(3)(b), F.S.

Expenditure - the creation or incurring of a legal obligation to disburse money.

Expense - the usual, ordinary and incidental expenditures by an agency or the judicial branch including, but not limited to, such items as contractual services, commodities and supplies of a consumable nature, current obligations and fixed charges and excluding expenditures classified as Operating Capital Outlay (OCO). Payments to other funds or local, state or federal agencies are included in this budget classification of expenditures.

Extension - an increase in the time allowed for a contract period due to circumstances which, without fault of either party, make performance impracticable or impossible, or which prevent a new contract from being executed, with or without a proportional increase in the total dollar amount, with any increase to be based on the method and rate previously established in the contract.

Firm - any individual, firm, partnership, corporation, association or other legal entity permitted by law to practice architecture, engineering or surveying and mapping in the state.

Fixed Capital Outlay (FCO) - an appropriation category for the purchase of real property (land, buildings, including appurtenances, fixtures and fixed equipment, structures, etc.), including additions, replacements, major repairs and renovations to real property which materially extend its useful life or materially improve or change its functional use and including furniture and equipment necessary to furnish and operate a new or improved facility, when appropriated by the Legislature in the fixed capital outlay appropriation category.

Foreign Travel - travel outside the United States.

Invitation to Bid (ITB) - a written solicitation for competitive sealed bids. The ITB is used when the agency is capable of specifically defining the scope of work for which a contractual service is required or when the agency is capable of establishing precise specifications defining the actual commodity or group of commodities required. A written solicitation includes a solicitation that is electronically posted.

Invitation to Negotiate (ITN) - a written solicitation for competitive sealed replies to select one or more vendors with which to commence negotiations for the procurement of commodities or contractual service. The ITN is used when the agency determines that negotiations may be necessary for the state to receive the best value. A written solicitation includes a solicitation that is electronically posted.

Invoice - a written document delivered to a purchaser showing the quantity, price, terms, nature of delivery and other particulars of goods or services sold or services rendered.

Legislative Budget Request - a request to the Legislature, filed pursuant to s. 216.023, F.S., or supplemental detailed requests filed with the Legislature, for the amounts of money such agency or branch believes will be needed in the performance of the functions that it is authorized, or which it is requesting authorization by law, to perform.

Meal Allowance - the amount authorized by Section 112.061(6)(b), F.S., for each meal during the travel period.

Merchant - a vendor who accepts the State of Florida Purchasing Card.

Most Economical Class Of Transportation - the class having the lowest fare available.

Most Economical Method Of Travel - the mode of transportation (state owned vehicle, privately-owned vehicle, common carrier, etc.) designated by an agency head in accordance with criteria prescribed by Section 112.061(7), F.S.

Non-Business Day - for a public officer or employee, a weekend or an authorized state holiday; for an authorized person it means a day on which such person was not scheduled to be performing service or contributing time to an agency.

Officer or Public Officer - an individual who in the performance of his or her official duties is vested by law with sovereign powers of government and who is either elected by the people or commissioned by the Governor and has jurisdiction extending throughout the State, or any person lawfully serving instead of either of the foregoing two classes of individuals as initial designee or successor.

Official Headquarters - the geographic location specified by Section 112.061(4), F.S.

Operating Capital Outlay (OCO) - an appropriation category for the purchase of equipment, fixtures and other tangible personal property of a non-consumable and nonexpendable nature, the value or cost of which is $1,000 or more and the normal expected life of which is one (1) year or more, and hardback bound books that are circulated to students or the general public, the value or cost of which is $25 or more, and hardback-covered bound books, the value or cost of which is $250 or more.

Pay And Charge - a transaction which is vouchered in favor of the vendor for payment and lists the individual to whom the expenses are being attributed as the sub-vendor.

Per Diem Rate - the amount authorized by Section 112.061(6)(a), F.S.

Personal Time - the time outside the regular work hours of a business day, a non-business day or a day for which the officer or employee had prior approval for a leave of absence.

Person with Disabilities - any person diagnosed as having a physical disability, including but not limited to blindness, or the loss of one or more life functions leaving that person mobility-impaired (or sensory-impaired) requiring the use of trained animal companions or prosthetic equipment including, but not limited to, crutches, walkers, canes or wheelchairs.

Perquisites - those things, or the use thereof, or services that confer on the officers or employees receiving them a benefit that is in the nature of additional compensation, or that reduce to some extent the normal personal expenses of the officer or employee receiving the same. The term includes, but is not limited to, such things as quarters, subsistence, utilities, laundry services, medical service and the use of state-owned vehicles for other than state purposes.

Point of Origin - the geographic location of a traveler's official headquarters or the geographic location where travel begins, whichever is lesser distance from the destination. (Refer to Attorney General Opinion 75-275.)

Professional Services - pursuant to Section 287.055, F.S., - those services within the scope of the practice of architecture, professional engineering, landscape architecture or registered surveying and mapping, as defined by the laws of the State, or those performed by any architect, professional engineer, landscape architect or registered surveyor and mapper in connection with his or her professional employment or practice.

Renewal - contracting with the same contractor for an additional contract period after the initial contract period, only if pursuant to contract terms specifically providing for such renewal.

Request for Information (RFI) - a written request made by an agency to vendors for information concerning commodities or contractual services. Responses to these requests are not offers and may not be accepted by the agency to form a bidding contract.

Request For Proposals (RFP) - a written solicitation for competitive sealed proposals. The request for proposals is used when it is not practicable for the agency to specifically define the scope of work for which the commodity, group of commodities or contractual service is required and when the agency is requesting that a responsible vendor propose a commodity, group of commodities or contractual service to meet the specifications of the solicitation document. A written solicitation includes a solicitation that is electronically posted.

Responsible Vendor - a vendor who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good-faith performance.

Responsive Bid, Responsive Proposal or Responsive Reply - a bid, or proposal or reply submitted by a responsive and responsible vendor, which conforms in all material respects to the solicitation.

Responsive Vendor - a vendor that has submitted a bid, proposal or reply that conforms in all material respects to the solicitation.

State of Florida Purchasing Card or Purchasing Card - the purchasing card issued to an individual pursuant to the State of Florida's Purchasing Card Program.

State of Florida Purchasing Card Transaction, Purchasing Card Transaction or Charge - the acquisition of and/or payment for a commodity, group of commodities, contractual service or actual travel expenses otherwise reimbursable to the authorized person (traveler) pursuant to Section 112.061, F.S., using the State of Florida Purchasing Card. Also includes all purchasing card credits obtained for the return of items, refund of Florida sale and/or use taxes or any refund or rebate provided by a merchant/vendor.

State Term Contract - a term contract that is negotiated and executed by the Department of Management Services and that is used by agencies and eligible users pursuant to Section 287.056, F.S.

Term Contract - an indefinite quantity contract to furnish commodities or contractual services during a defined period.

Travel Day - a period of 24 hours consisting of four quarters of 6 hours each.

Travel Period - a period of time between the time of departure and time of return.

Voucher - a standard Florida Accounting Information Resource (FLAIR) voucher schedule as prescribed by the Chief Financial Officer complete with invoices and such other supporting documentation necessary to authenticate the recording of a transaction into the accounting records of an agency which will also serve as an official request by an agency to the Bureau of Auditing for a payment in satisfaction of an obligation incurred by an agency.


SUBJECT INDEX (Alphabetical)
A B C D E F G H I J K L M N O P Q R S T U V

A

ADVANCE PAYMENTS
ADVERTISING
AMERICANS WITH DISABILITIES ACT
ARTWORK IN STATE BUILDINGS
ASSIGNMENT OF PAYMENTS
AWARDS

Satisfactory Service Awards
Employee Gathering for Awards Presentation – State Owned Space
Rental Space and Travel Costs
Volunteer Recognition

B

BUILDING LEASES – PRIVATE SECTOR
BUSINESS CARDS

C

CLAIMS AGAINST THE STATE; Statute of Limitations
COMMUNICATIONS; General and Cellular Telephones
CONTRACTUAL SERVICES  

General
Advances Pursuant to Section 216.181(16) F.S.
Contracts for $1,800 or Less
Contract Document Requirements
Exceptions to Provision Requirements of Section 287.058 F.S.
Contract Document Changes
Contract Payment Requirements
Contract Review Process
Contracts Signed After Services Are Rendered
Court Reporter Services
Determination of Employee-Employer Relationship
Extra Compensation
Federal and State Financial Assistance
FCO Grants and Aids Appropriations
Interchange of Personnel Among State Agencies
Legal Services
Limitation of Indirect Costs
Professional Services
Exhibits

COUNTY HEALTH UNIT TRUST FUND
COURT REPORTER SERVICES (See “Contractual Services")
CREDIT CARD FEES

D

DEFERRED-PAYMENT COMMODITY CONTRACTS

E

EDUCATIONAL COURSES
EQUIPMENT LEASES
EXECUTIVE ORDERS

F

FCO GRANTS AND AID APPROPRIATIONS (See “Contractual Services")
FEDERAL AND STATE FINANCIAL ASSISTANCE (See “Contractual Services")
FURNITURE

G

H

I

INDIRECT COSTS; LIMITATION ON (See “Contractual Services")
INSURANCE
INTERCHANGE OF PERSONNEL AMONG STATE AGENCIES (See “Contractual Services")
INVOICES
INVOICE SAMPLING

J

JOURNAL TRANSFERS

JT Exhibit 1
JT Exhibit 2
JT Exhibit 3
JT Exhibit 4
JT Exhibit 5
JT Exhibit 6
JT Exhibit 7
JT Exhibit 8
JT Exhibit 9
JT Exhibit 10
JT Exhibit 11
JT Exhibit 12

K

L

LAND PURCHASES
LEGAL SERVICES (See “Contractual Services")
LEVIES

Department of Revenue
Internal Revenue Service (IRS)

LICENSE FEES (See “Membership Dues”)
LOBBYIST

M

MEMBERSHIP DUES/LICENSE FEES
MOTOR VEHICLES
MOVING EXPENSES/EMPLOYEE

Exhibit

N

NOTARY

O

OCO VS. EXPENSE

P

PERQUISITES
PHOTOGRAPHS OF PUBLIC OFFICIALS; MAKING AND DISSEMINATING
POSTAGE
PROCUREMENT; METHOD OF
PROHIBITED EXPENDITURES
PROMOTIONAL ITEMS
PURCHASING CARD TRANSACTIONS

General Information
Advances Pursuant to Section 215.422(14) F.S.
Airline Tickets
Americans With Disabilities Act
Awards
Cellular Telephones
Co-Traveler's Travel Costs
Contractual Services/Section 287.058(4), F.S. Requirements
County Health Unit Trust Fund
Employee Moving Expenses
Department of Revenue Levies
Interagency Payments
Internal Revenue Service Levies
Receipt Requirements
Leases of Buildings and Equipment
Multiple Registration Fees
Perquisites
Retention Schedule For Original Receipts and Supporting Documents
Sales and Use Tax
Travel
Travel Voucher Filing
Vendor Ids/Federal Employer Identification Number

Q

R

RECYCLING PROCEEDS

S

SETTLEMENTS OF CLAIMS AGAINST THE STATE
SPORTS EQUIPMENT; DEPARTMENT OF CORRECTIONS

T

TAXES
TRAVEL

General Information
Automated Travel
Conferences and Conventions
Direct Billing Travel Cards
Direct Payment
Emergency Situations
Foreign Travel
Hotel and Auto Rental Receipts
Hotel Costs Shared By Multiple Travelers
Incidental Travel Expenses
Meals, Food, Beverages and Travel Expenses for Emergency Operation and Relief Staff During Times of Disaster/Emergency Assistance
Per Diem and Subsistence Allowances
Per Diem and Subsistence Allowance – Mileage Limits
Reimbursement of Travel Expenditures By Individuals With Disabilities
State of Florida Purchasing Card – Travel
Transportation
Travel Advance Requests
Travel Forms
Exhibits

U

V

VOLUNTEERS
VOUCHERS


ADVANCE PAYMENTS

Contractual Advance Payments Pursuant To Section 216.181(16), F.S. - (See “Contractual Services”)

Advances Pursuant To Section 215.422(14), F.S.

Advance payments may be made under Section 215.422(14), F.S., and Rule 3A-40.120(3), Florida Administrative Code (FAC), in accordance with the following:

1. Advance payment may be made for maintenance agreements, software license agreements, and subscriptions that meet one of the following criteria:

  • Advance payment will result in a savings to the State that is equal to or greater than the amount the State would earn by investing the funds and paying in arrears.

  • The goods or services are essential to the operation of a state agency and are available only if advance payment is made.
  • Prior approval of the Bureau of Auditing is not required for advance payments that are equal to or less than the threshold of Category Two as defined in Section 287.017, F.S., and meets one of the above criteria. The payment request must document that the payment meets one of the above criteria.

    Prior approval of the Bureau of Auditing is required for advance payments that exceed the threshold of Category Two as defined by Section 287.017, F.S.

    Requests for advance payment approval must include information indicating that the payment meets one of the above criteria and that the agency has complied with applicable procurement requirements.

    2. Advance payment may be made for other goods and services if approved in advance by the Bureau of Auditing. Criteria for approval includes:

    a. Advance payment will result in a savings to the State that is equal to or greater than the amount the State would earn by investing the funds and paying in arrears.

    b. The goods or services are essential to the operation of a State agency and are available only if advance payment is made.

    Requests for advance payment approval must include information indicating that the payment meets one of the above criteria and that the agency has complied with applicable procurement requirements.

    ADVERTISING

    Pursuant to Sections 50.031 and 50.041, F.S., legal advertisements shall have proof of such publication made by uniform affidavit.

    AMERICANS WITH DISABILITIES ACT

    When a payment, which would not otherwise be a lawfully authorized use of state funds, is requested pursuant to the American with Disabilities Act (ADA), the payment request shall include a signed statement from the agency head or designee certifying that:

    1. An employee of the agency, an applicant for a position or other covered person has requested a “reasonable accommodation” pursuant to ADA to assist him/her in performing his/her duties, applying for a position or other covered activity.

    2. The agency has determined that the individual is a “qualified individual with a disability” as defined in the ADA.

    3. The agency has determined that the purchase of the item in question is a “reasonable accommodation” pursuant to ADA for that employee, applicant or person.

    4. The agency will maintain all records related to this purchase for seven years and make those records available for review to those persons authorized to review such records.

    The ADA provides that records related to an individual's disability must be kept confidential; therefore, payment information related to providing a “reasonable accommodation” shall contain a file number or other code by which the voucher can be readily traced to the confidential records maintained by the agency.

    ARTWORK IN STATE BUILDINGS

    Section 255.043, F.S., allows for the purchase of artwork for state buildings when included in the appropriation for the original construction of such building in an amount of 0.5 percent of the total appropriations not to exceed $100,000. Evidence of notification by the agencies receiving original appropriations for construction to the Florida Arts Council must be included with invoices submitted for payment pursuant to this section.

    ASSIGNMENT OF PAYMENTS

    1. Pursuant to Section 215.965, F.S., payments due vendors or employees cannot be assigned by changing the payee's name from ultimate beneficiary to an assignee. However, subject to approval of each individual agency, state warrants may be issued in favor of an employee or a vendor and be delivered to the assignee. Authorization from the payee and agency should be on file prior to payment.

    2. For the majority of vendor contracts the ultimate beneficiary is the vendor supplying the service, but on some contracts the ultimate beneficiary may be a third party that the vendor owes a legal monetary obligation. In these situations the contract may be amended to correctly state the party who is the ultimate beneficiary of state funds and the party who will be supplying the services to the State. These cases must be analyzed on a case-by-case basis. Such a contract would have all parties in agreement, especially between the vendor and the third party. The liability of the State should be addressed in the contract by the vendor supplying the service and the ultimate beneficiary. Nevertheless, the best way to handle these situations will be to have the vendor and the third party settle their financial matters between themselves and the State pay the vendor supplying the service.

    3. Section 215.965, F.S., does not preclude payments being made jointly to an ultimate beneficiary and third party.

    AWARDS

    When requesting payment for individual awards, the employee's name and social security number must be provided.

    Satisfactory Service Awards

    Pursuant to Section 110.1245, F.S., each department head is authorized to incur expenditures for giving awards in the following situations:

    1. Retiring state employees whose service has been satisfactory may be awarded suitable framed certificates, pins and other tokens of appreciation and recognition. Awards may not exceed $100 each, plus applicable taxes.

    2. Each department head is authorized to incur expenditures to award suitable framed certificates, pins, or other tokens of recognition to state employees who demonstrate satisfactory service in the agency or to the state, in appreciation and recognition of such service. Such awards may not cost in excess of $100 each plus applicable taxes.

    3. Any appointed member of a state board or commission, whose service to the State has been satisfactory, upon the expiration of the board or commission member's final term in the position may be awarded suitable framed certificates, plaques or other tokens of appreciation and recognition not to exceed $100 each, plus applicable taxes.

    Employee Gathering for Awards Presentation – State Owned Space

    While there may be benefits in bringing employees together to witness the presentation of awards, in terms of improved employee motivation and morale, such benefits are often difficult to measure. Agencies are encouraged to consider the full costs of such events against the benefits derived from such costs, and reevaluate the decision to hold such events at taxpayer expense. The cost of such a gathering can be calculated in terms of the time involved in such an event and the salaries of the employees participating. This includes not only the time of those actually attending the event (time spent going to the location of the event, at the event and returning to their workstations), but also the time spent by employees in arranging such events and in notifying employees of the time and location of the event. In addition to the salary (including overtime and compensatory time), there may be costs associated with travel that must be included.

    Rental Space and Travel Costs

    The cost of renting space for the purpose of gathering employees together for the sole purpose of witnessing the presentation of awards or the travel costs incurred for the sole purpose of attending an awards presentation event are not allowable state expenditures. However, travel expenses for award winners to travel to an awards presentation event may be paid by state funds.

    Volunteer Recognition

    Pursuant to Section 110.503(5), F.S., each department or agency using the services of volunteers is authorized to incur expenditures not to exceed $100 each, plus applicable taxes for suitable framed certificates, plaques or other tokens of recognition to honor, reward or encourage volunteers for their service.

    Pursuant to Section 110.504(6), F.S., incidental recognition benefits or incidental non-monetary awards may be furnished to volunteers serving in state departments to award, recognize or encourage volunteers for their service. The awards may not cost in excess of $100 each plus applicable tax.

    Also see “Purchasing Card Transactions – Awards.”

    BUILDING LEASES - PRIVATE SECTOR

    Pursuant to Sections 255.25 and 255.254, F.S., any agency requiring lease space must obtain approval from the Department of Management Services (DMS).

    Vouchers for the payment of building leases must include the approved lease number from DMS, if applicable. Leases may not be paid in advance, however; vouchers may be submitted for payment after the 20th of the month for which payment is required.

    Prior to leasing buildings that require renovation at state expense, agencies should determine if it is in the best interest of the state to lease the building rather than leasing space that meets the agency's needs.

    Justification must be maintained by the agency and furnished to the Bureau of Auditing upon request.

    Also see “Purchasing Card Transactions – Leasing of Buildings and Equipment.”

    BUSINESS CARDS

    State agencies should review the necessity of business cards for its employees and limit the purchase of business cards to those employees who actually need the cards to carry out their official duties and responsibilities. If there is a need to purchase business cards for employees, the purchases should be made within the following limitations. Gold sealed cards may be purchased for employees filling Selected Exempt, Senior Management and equivalent or higher positions. The more economical one-color cards may be purchased for other employees who need cards.

    Payment request for business cards other than the most economical one-color cards must include information showing that the employee for whom the cards are being purchased is filling a Selected Exempt, Senior Management or equivalent position.

    CLAIMS AGAINST THE STATE

    Claims Against The State – Statute of Limitations

    Section 95.11(2)(b), F.S., places a five-year limitation on legal or equitable actions on a contract, obligation or liability founded on a written instrument. Section 95.11(3)(k), F.S., places a four year limitation on actions on a contract, obligation, or liability not founded on a written instrument, including an action for the sale and delivery of goods, wares, and merchandise. Any claim exceeding the time limits provided herein shall be considered past the statute of limitations for claims against the State.

    Settlements – See “Settlement of Claims Against the State” section.

    COMMUNICATIONS

    General

    Expenditures properly chargeable to communications include telephone, cellular telephone, beepers, pagers, telegraph and data processing communications. The purchase, lease and use of all communication services that exceeds Category Two, Section 287.017, F.S., shall have prior approval by the Division of Communications, pursuant to Rule 60C-2.008, F.A.C., unless such authority is delegated to the agencies. A copy of the approval shall be attached to the invoice submitted for payment.

    Charges for Universal Service Support (also known as Universal Community Charges or Federal Universal Service Fees) may be paid from state funds. These are NOT taxes, therefore the State of Florida is not exempt.

    The State of Florida and its political subdivisions are exempt from federal communication tax on communications services defined as local telephone services, toll telephone services and teletypewriter exchange services. Federal communication tax included on invoices for such services should be deleted from the invoices prior to processing of payment.

    Cellular Telephones – State Owned

    Cellular telephones should only be used for conducting official state business when a conventional telephone is not readily available. State agencies should have established internal controls over the use of state-owned or leased cellular telephones to ensure that payments from public funds relating to the cellular telephones serve a specific authorized public purpose. Billing options should be reviewed to determine that the most economical option is selected considering the specific usage requirements of the cellular telephone user.

    Personal use of State-owned or leased cellular telephones should be discouraged. In the event that personal calls are made or received, there should be procedures in place to ensure that payment is received for the personal use prior to payment to the service provider while observing the requirements of Section 215.422 F.S. This may be accomplished by:

    1. Having the employee provide a personal check or money order made payable to the service provider for the personal portion of the invoice. If the personal portion of the invoice is less than one dollar ($1), agencies will not be required to obtain payment from the employee. The payment should be mailed to the service provider along with the state's portion.

    2. If an agency elects to make payment in full to the service provider, the employee should provide a personal check or money order made payable to the state agency. The personal check or money order should be deposited in the appropriate state account prior to the mailing of the state warrant.

    If the plan is based on actual usage, the employee would pay the charge for the personal call plus any applicable taxes.

    If the plan includes a specific number of minutes allowed for a specified fee, the following instructions are to be used to calculate the amount the employee would reimburse the state agency for personal calls. When the plan minutes allowed are not exceeded, the employee would pay the prorated per minute rate. Divide the number of plan minutes allowed by the monthly fee to determine the prorated per minute rate. For example, if a plan has a monthly fee of thirty dollars ($30) for 200 minutes, the employee would pay 15 cents ($30/200) for every minute of personal usage on the state cell telephone.

    When the plan minutes allowed are exceeded, the employee would pay the excess per minute rate for every minute of personal usage on the state cell telephone.

    Cellular Telephones - Personal

    Reimbursement to employees for occasional use of personal cellular telephones to conduct official state business will be made only when substantiated by documentation showing that the call was necessarily made for the official state business of the agency. If the business call made on the employee's personal cellular telephone does not result in additional charges to the employee, reimbursement for the business call is disallowed. However, if the state business call results in additional charges, the employee may be reimbursed up to the per-minute rate charged, plus applicable taxes, for the excess minutes incurred as a result of usage for official state business. Employees will be required to provide a statement certifying that the calls were necessary and were for official state business. No payment will be made for any portion of the employee's personal monthly charges, taxes on the basic monthly fee, or charges related to obtaining documentation listing individual telephone calls.

    If it is necessary for an employee to consistently use his or her personal telephone to conduct the duties and responsibilities of a state agency, then the agency should consider providing use of a state cellular telephone.

    Also see “Purchasing Card Transactions – Cellular Phones/Pagers.”

    CONTRACTUAL SERVICES

    General

    Contractual service means the rendering of time and effort by the contractor rather than the furnishing of specific commodities. Expenditures classified as contractual services include, but are not limited to: professional services such as accounting, architectural, consulting, court reporting, engineering, legal and medical and general services such as custodial, employment, entertainment, examination and testing, investigative and research.

    Advances Pursuant to Section 216.181(16), F.S.

    Section 216.181(16), F.S., provides for advances for program startup or advances for contracted services to governmental entities and not-for-profit organizations. The amount that may be advanced shall not exceed the expected cash needs of the contractor or recipient within the initial three months. Thereafter, disbursements shall only be on a reimbursement basis. Advance payments may be made for cost-reimbursement and fixed-price contracts.

    Agencies specifically authorized by the General Appropriations Act to make advance payments and wishing to advance beyond the initial three months expected cash needs must request a waiver from the Bureau of Auditing. The request for waiver must include:

    1. The appropriation line item number.
    2. Justification for advancing funds beyond the three months expected cash needs.

    The waiver request should be sent to Bureau of Auditing, Department of Financial Services, 200 East Gaines Street, Tallahassee, Florida 32399-0355 for approval prior to submitting for payment. The waiver request will then be forwarded to the appropriations committees of both houses of the Legislature for consultation and comments. The Legislature has fourteen days to respond to the request. If there is no response within the fourteen day time period, then approval will be granted by the Bureau of Auditing, provided all other applicable requirements are met. The agency will be notified in writing of the approval or disapproval of the request. If approved, a copy of the approval must be submitted with the payment.

    *Advance payments allowed under Section 215.422(14), F.S., may be found in the “Advance Payment” section.

    Contracts for $1,800 or Less

    To reduce the time and cost required to process small routine monthly or quarterly payments on annual contracts, agencies are authorized to process annual advance payments on such contracts, the annual amount of which is $1800 or less. Contracts $1800 or less are not required to meet the specific documentation required by Rule 3A-40.120(3), F.A.C., for advance payments.

    Contract Document Requirements

    Pursuant to Section 287.058, F.S., every procurement of contractual services in excess of the Category Two threshold amount provided in Section 287.017, F.S., shall be evidenced by a written agreement embodying all provisions and conditions of the procurement of such services. Section 287.058 (1), F.S., allows the use of a purchase order in lieu of a written agreement. However, the purchase order must include an adequate description of the service, the contract period and the method of payment. Additionally, the purchase order or solicitation must include the provisions of Section 287.058 (1)(a)–(f), F.S.

    Regardless of whether a purchase order or written agreement is used, the document must contain clear and specific language regarding services/deliverables that must be rendered and accepted prior to payments being received. Deliverables must be specifically related to the contract's scope of work and must be both quantifiable and measurable. The document must also contain sanctions for non-performance. Contracts which are paid on a reimbursement basis or at a fixed rate for a specific time period, e.g. monthly, quarterly, etc., should require written progress reports to be submitted detailing the activities accomplished for the invoice period.

    To process payments for services using a purchase order, the purchase order should state that the terms may not be modified by the vendor. Any such attempt to modify a purchase order for services will not be accepted as the basis for additional compensation.

    Contractual Services Exhibit 1, located at the end of this section, may be used as a reference for all of the requirements to be included in the contract document.

    Exceptions to Provision Requirements of Section 287.058 F.S.

    a. Section 287.058(1)(b), F.S. - Provision for Travel - If no travel will be incurred in connection with the contract, then this is not applicable.

    b. Section 287.058(1)(f), F.S. - Provision for Renewal - This provision applies only to contracts that will be renewed.

    Pursuant to Sections 287.057(5)(a) and (5)(c), F.S., contracts that are emergency procurements or single source procurements may not be renewed. However, contracts for which only one response to a bid or proposal was received may be renewed.

    c. Section 287.0582, F.S. - Contingency Provision - This provision is required for any contract that crosses fiscal years. If a contract is to be paid from a continuing appropriation (such as FCO), this provision is not applicable. However, it is the agency's responsibility to identify the payment as coming from a continuing appropriation.

    d. Contracts for agencies exempt from Chapter 287, F.S., are not required to meet the requirements of Section 287.058, F.S. Those agencies are the Legislature, the Auditor General, Ethics Commission, Public Service Commission, State Courts, Judicial, Department of the Lottery and State University System.

    Contract Document Changes

    a. Purchase order contracts may be amended by a change order issued prior to the service completion date as stated in the purchase order contract. Formal two-party agreements may be amended by a two-party document executed by both parties prior to the expiration of the contract.

    b. Contract renewals must be entered into prior to the expiration date of the contract, and must have all the same terms and conditions of the original contract. Contracts may be renewed for a period that may not exceed three years or the term of the original contract, whichever is longer.

    If the commodity or contractual service is purchased as the result of a competitive solicitation, the price of the commodity or contractual service to be renewed must be specified in the bid, proposal or reply.

    Contracts procured as an emergency or single source may not be renewed.

    c. Contract extensions can be for up to six months with all the same terms and conditions of the original contract. The extension must be signed prior to the expiration date of the contract. There can be only one extension of a contract unless the failure to meet the criteria set forth in the contract for completion of the contract is due to events beyond the control of the contractor.

    Contract Payment Requirements

    Payments for contractual service must include at a minimum, the invoice, a description of the services provided (i.e., specific deliverables) and the date(s) of service. The following contracts require additional documentation or information.

    Cost Reimbursement Contract

    Pursuant to Comptroller's Memorandum #1 (1997/1998) detailed supporting documentation for cost-reimbursement contract payments is not required to be submitted to the Bureau of Auditing. However, each agency will be required to maintain detailed supporting documentation and to make it available for audit purposes. In lieu of submitting detailed supporting documentation to the Bureau of Auditing, agencies may submit an itemized invoice by expenditure category (salaries, travel, expenses, etc.). By submission of the payment requests, the agency will have certified that the detailed documentation to support each item on the itemized invoice is available for audit. The following supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts as provided in Comptroller's Memorandum #04 (1996-97).

    Supporting documentation for each amount for which reimbursement is being claimed must indicate that the item has been paid. Check numbers may be provided in lieu of copies of actual checks. Each piece of documentation should clearly reflect the dates of service. Only expenditures for categories in the approved contract budget should be reimbursed.

    Listed below are the types of documentation and examples of the minimum requirements.

    (1) Salaries: A payroll register or similar documentation should be maintained. The payroll register should show gross salary charges, fringe benefits, other deductions and net pay. If an individual for whom reimbursement is being claimed is paid by the hour, a document reflecting the hours worked times the rate of pay will be acceptable.

    (2) Fringe Benefits: Fringe Benefits should be supported by invoices showing the amount paid on behalf of the employee, e.g., insurance premiums paid. If the contract specifically states that fringe benefits will be based on a specified percentage rather than the actual cost of fringe benefits, then the calculation for the fringe benefits amount must be shown.

    Exception: Governmental entities are not required to provide check numbers or copies of checks for fringe benefits.

    (3) Travel: Reimbursement for travel must be in accordance with Section 112.061, F.S., which includes submission of the claim on the approved state travel voucher.

    (4) Other direct costs: Reimbursement will be made based on paid invoices/receipts. If nonexpendable property is purchased using state funds, the contract should include a provision for the transfer of the property to the State when services are terminated. Documentation must be provided to show compliance with DMS Rule 60A-1.017, F.A.C., regarding the requirements for contracts which include services and that provide for the contractor to purchase tangible personal property as defined in Section 273.02, F.S., for subsequent transfer to the State.

    (5) In-house charges: Charges which may be of an internal nature (e.g., postage, copies, etc.) may be reimbursed based on a usage log which shows the units times the rate being charged. The rates must be reasonable.

    (6) Indirect costs: If the contract specifies that indirect costs will be paid based on a specified rate, then the calculation should be shown.

    Pursuant to Section 216.346, F.S., contracts between state agencies including any contract involving the State University System or the State Community College system, the agency receiving the contract or grant moneys shall charge no more than 5 percent of the total cost of the contract or grant for overhead or indirect cost or any other cost not required for the payment of direct costs.

    Contracts between state agencies, and or contracts between universities may submit alternative documentation to substantiate the reimbursement request that may be in the form of FLAIR reports or other detailed reports.

    Fixed Payment

    Fixed-rate contract payment requests must include an invoice that shows units of service and applicable unit rates with extensions that equal the total invoice amount.

    Contract Review Process

    Comptroller's Memorandum #11 (2001-02) outlines the contractual services processing procedures. This process eliminates the requirement for agencies to submit a copy of the contract/purchase order contract and supporting documentation for contractual services contracts of $250,000 or less. Only payments on contracts/purchase order contracts for contractual services for which the contract/purchase order amount is greater than $75,000 will be processed through the Central Contract System with the use of an agency-assigned Statewide Contract number. This includes open-dollar amount contracts.

    The contract review process requires agencies to complete a Contract Review Checklist if the contract exceeds $75,000 and submit the checklist to the Bureau of Auditing. (See Exhibit 1 and Exhibit 2. The Contract Review Checklist is available on the DFS website in Adobe Acrobat and Word formats. Agencies may use the long version (Contractual Services Exhibit 1) or the short version (Contractual Services Exhibit 2) of the Contract Review Checklist. Agencies may adapt the Contract Review Checklist to meet their agency needs with the approval of the Bureau of Auditing. Agencies already using an approved agency version of the Contract Review Checklist may continue to use their approved version of the checklist.

    For contracts with amounts greater than $75,000 and less than or equal to $250,000, agencies must submit a Contract Review Checklist in lieu of the contract and supporting documentation. For contracts in excess of $250,000 or with an open-dollar amount, the agencies must submit a Contract Review Checklist, the contract and supporting documentation. (See Guidelines in this section.)

    If the contract amount is $75,000 or less or is a “one time” payment (for any dollar value), the agency is encouraged to send the Contract Summary Form in lieu of the contract/purchase order with every payment. (See Contractual Services Exhibit 3.)

    When completing the Contract Review Checklist, please include all of the required contract information. In the event there is insufficient space on the checklist to include all deliverables/milestones or payment criteria, pages from the contract or exhibits containing this information should be attached to the checklist.

    The Contract Review Checklist and/or contract/purchase order and supporting documentation should be submitted to the Bureau of Auditing in advance of the first payment. It is very important that the checklist and/or contracts be submitted prior to the payment request in order to avoid delays and allow for more efficient and timely processing of contractual services vouchers.

    The Bureau of Auditing will review the Contract Review Checklist and/or contract/purchase order for compliance with statutory requirements, general contract requirements otherwise provided by law or rule and terms governing delivery of service and payment. Upon completion of this review and approval, the Bureau of Auditing will enter the contract information in the Central Contract System.

    Service contracts (for any dollar amount) from State Term Contracts, SNAPS, PRIDE, RESPECT, construction and one time payments are not tracked on the Central Contract System and DO NOT require submission of the Contract Review Checklist.

    Guidelines for the contract review process are as follows:

    Contracts/purchase order for services $75,000 or less:

  • Contracts will not be tracked on the Central Contract System.

  • Contract/purchase order summary form required with each payment. (See Contractual Services Exhibit 3)
  • Contracts/purchase order for services in excess of $75,000 and less than or equal to $250,000:

  • Contracts will be tracked on the Central Contract System.

  • Only Contract Review Checklist is required.

  • Copy of the contract and any supporting documentation is not required.
  • Contracts/purchase order for services greater than $250,000 or Open Dollar Amount:

  • Contracts will be tracked on the Central Contract System.

  • Contract Review Checklist required.

  • Copy of the contract and any supporting documentation required (method of procurement, etc).
  • New Contracts:

  • The contract review process guidelines listed above will apply.
  • Existing Contracts:

  • If the contract/purchase order is currently tracked on the Central Contract System and the contract/purchase order amount is $75,000 or less, the guidelines listed above for contracts for services of $75,000 or less will apply.

  • If the contract/purchase order is currently tracked on the Central Contract System and the contract amount is greater than $75,000, the contract will continue to be tracked and a Contract Review Checklist will not be required until the contract is renewed or amended.
  • Contract Renewal: (No change in contract terms)

  • If the contract/purchase order amount is $75,000 or less, the guidelines listed above for contracts for services of $75,000 or less will apply.

  • If the contract/purchase order amount is greater than $75,000 but less than or equal to $250,000, a Contract Review Checklist marked as a renewal with the renewal number is required.

  • If the contract/purchase order amount is greater than $250,000 or an open-dollar amount, a Contract Review Checklist marked as a renewal and a copy of the renewal is required.
  • Contract Amendment:

  • Contracts/purchase orders less than or equal to $75,000. If an amendment causes the contract amount to exceed $75,000, a Contract Review Checklist will be required. The contract will be tracked on the Central Contract System and a payment history will be required in order to record the previous contract payments on the system.

  • If the contract/purchase order amount is greater than $75,000 and less than or equal to $250,000, a Contract Review Checklist marked as an amendment with the amended changes noted is required.

  • If the contract amount is greater than $250,000 or an open-dollar amount, a Contract Review Checklist marked as an amendment number with amended changes noted on a copy of the amendment is required.
  • Contracts Signed After Services Are Rendered

    Section 287.058 (2), F.S., requires that both parties shall sign a written agreement or contract prior to the rendering of the services for contractual service agreements costing in excess of Category Two threshold except in the case of a valid emergency as certified by the agency head. The certification of an emergency must be prepared within thirty (30) days after the contractor begins rendering the service and must state the particular facts and circumstances which precluded the execution of the written agreement prior to the rendering of the service.

    If the agency fails to have the contract signed by the agency head and the contractor prior to rendering the contractual service, and if an emergency does not exist, the agency head must, no later than 30 days after the contractor begins rendering the service, certify the specific conditions and circumstances to DMS as well as describe actions taken to prevent recurrence of such noncompliance.

    Noncompliance with these requirements will necessitate that the agency and the contractor enter into a settlement agreement.

    Court Reporter Services

    Section 287.059(14), F.S., authorizes the Office of the Attorney General to contract with one or more court reporting services, on a circuit wide basis, on behalf of all state agencies. All agencies shall utilize the contracts for court reporting services entered into by the Office of the Attorney General. In the absence of a state contract for court reporting services, agencies contracting for court reporting services must abide by the standard fee schedule established in Rule 2-39.020, F.A.C. The standard fee schedule is established as a maximum amount allowable for court reporter services and is to be applied based on the location of the deposition or hearing. Agencies should negotiate fees below the maximum allowed whenever possible if no state court reporter contract is in effect.

    Any agency wishing to exceed the standard fee schedule must demonstrate necessity for such action to the Attorney General through a statement of waiver that must be signed by the appropriate agency head or designee prior to contracting for court reporting services. A copy of the waiver must be submitted to the Bureau of Auditing along with the payment. The waiver should be based on the following criteria:

    1. The inability of the agency to obtain adequate court reporting services within the confines of the standard fee schedule.

    2. The agency is unable to obtain court reporting services with the special expertise necessary to perform the particular reporting function needed.

    3. The waiver is necessary in order to provide court-reporting services as a result of an emergency, or an immediate danger to public health, safety and welfare. The agency shall set forth in detail the emergency or danger that requires contracting in excess of the standard fee schedule.

    Determination of Employee-Employer Relationship

    When entering into agreements for personal services, agencies should determine if an employer-employee relationship exists. The IRS provides generally that the relationship of employer and employee exists when the person or persons for whom the services are performed have the right to control and direct the individual who performs the services, not only as the result to be accomplished by the work but also as to the details and means by which that result is accomplished. If it is determined that such a relationship does exist, the employee should be paid through the payroll system and not as an independent contractor. It is incumbent on each agency to evaluate the circumstances of each contractual relationship. Any penalties that may be imposed by the IRS for failure to make the proper determination of the employment relationship will be borne by the agency making the initial determination.

    Circumstances of an employment relationship may be submitted to the IRS for its determination using a Form SS-8.

    As an aid to assist agencies in making a determination of the employee-employer relationship, the following twenty factors have been established. These factors have been developed only as guides for determining whether an individual is an employee. Special scrutiny is required in applying the twenty factors to assure that formalistic aspects of an arrangement designed to achieve a particular status do not obscure the substance of the arrangement. The twenty factors are as follows:

    1. Instructions. A worker who is required to comply with other persons' instructions about when, where and how he or she is to work is ordinarily an employee. This control factor is present if the person or persons for whom the services are performed have the right to require compliance with instructions.

    2. Training. Training a worker by requiring an experienced employee to work with the worker by corresponding with the worker, by requiring the worker to attend meetings or by using other methods, indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.

    3. Integration. Integration of the worker's services into the business operations generally shows that the worker is subject to direction and control. When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business.

    4. Services Rendered Personally. If the services must be rendered personally presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as in the results.

    5. Hiring, Supervising and Paying Assistants. If the person or persons for whom the services are performed hire, supervise and pay assistants, that factor generally shows control over the workers on the job. However, if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status.

    6. Continuing Relationship. A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals.

    7. Set Hours of Work. The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control.

    8. Full-Time Required. If the worker must devote substantially full time to the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor, on the other hand is free to work when and for whom he or she chooses.

    9. Doing Work on Employer's Premises. If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Work done off the premises of the person or persons receiving the services, such as at the office of the worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer's premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time or to work at specific places as required.

    10. Order of Sequence Set. If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker's own pattern of work but must follow the established routines and schedules of the person or persons for whom the services are performed. Often, because of the nature of an occupation, the person or persons for whom the services are performed do not set the order of the services or set the order infrequently. It is sufficient to show control, however, if such a person or persons retain the right to do so.

    11. Oral or Written Reports. A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control.

    12. Payment by Hour, Week, Month. Payment by the hour, week or month generally points to an employer-employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on a straight commission generally indicates that the worker is an independent contractor.

    13. Payment of Business and/or Traveling Expenses. If the person or persons for whom the services are performed ordinarily pay the worker's business and/or traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regulate and direct the worker's business activities.

    14. Furnishing of Tools and Materials. The fact that the person or persons for whom the services are performed furnish significant tools, materials and other equipment tends to show the existence of an employer-employee relationship.

    15. Significant Investment. If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees (such as the maintenance of an office rented at fair value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer-employee relationship.

    16. Realization of Profit or Loss. A worker who can realize a profit or suffer a loss as a result of the worker's services (in addition to the profit or loss ordinarily realized by employees) is generally an independent contractor, but the worker who cannot is an employee.

    17. Working for More Than One Firm at a Time. If a worker performs more than the minimum service for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor.

    18. Making a Service Available to General Public. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship.

    19. Right to Discharge. The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer's instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.

    20. Right to Terminate. If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship.

    Extra Compensation

    Pursuant to Section 215.425, F.S., additional compensation may not be granted after the contract has been made unless additional services will be provided. Contract amendments increasing the total contract amount are only valid if additional services are being provided and only if the ITB, ITN, or RFP provided for price increases, an expansion of the scope of services and/or future amendments to increase the total amount of the contract. If the total amount of a fixed unit rate contract is being increased and the unit rate remains the same, then it can be assumed that the contractor will be providing additional units of service. All other contracts must clearly show the additional services that will be provided. Method of procurement for additional services must be provided.

    Federal And State Financial Assistance

    Awards of federal and/or state financial assistance may be made in the form of grants, direct appropriations, loans, etc., and do not represent a purchase of service from a vendor.

    Disbursements of state financial assistance must be made from 7500 object code and should bypass FLAIR's Central Accounting Contract System. Disbursement of other types of financial assistance may be made with 7100, 7200, 7300, 7400, and 7900 object codes and should also bypass FLAIR's Central Accounting Contract System.

    Agencies are required to provide the authority for the disbursement of federal or state financial assistance. Information regarding state financial assistance and the Florida Single Audit Act can be found on the web pages of the Executive Office of the Governor, the Office of the Auditor General and the Department of Financial Services. The Governor's website also has links to information on federal financial assistance.

    The agreement awarding state/federal financial assistance must contain clear and specific language regarding services/deliverables that must be rendered and accepted prior to payments being issued by the state. Deliverables must be specifically related to the agreement's scope of work and must be both quantifiable and measurable. The document must also contain sanctions for non-performance. Agreements which are paid on a reimbursement basis or at a fixed rate for a specific time period, e.g. monthly, quarterly, etc., should require written progress reports to be submitted detailing the activities accomplished for the invoice period.

    FCO Grants And Aids Appropriations

    Where applicable, FCO grants to non-profit entities must comply with the requirements of Section 216.348, F.S.

    Interchange Of Personnel Among State Agencies

    Section 112.24, F.S., authorizes employee interchange agreements among State of Florida Agencies in order to encourage economical and effective use of public employees. Interchange agreements are exempt from the provision requirements of Section 287.058, F.S., and should be executed in accordance with the requirements set forth in Section 112.24, F.S.

    Legal Services

    Contracts for private attorney services must be in accordance with Section 287.059, F.S. Prior approval of the Attorney General must be obtained, where applicable, and shall include a statement that the private attorney services requested cannot be provided by the Office of the Attorney General or that such private attorney services are cost effective in the opinion of the Attorney General. Where applicable, evidence of approval by the Office of the Attorney General to contract for private attorney services must be included with the first payment submitted to the Bureau of Auditing for contracts tracked through the system. Contracts not tracked through the system must include evidence of approval with each payment.

    Limitation On Indirect Costs

    Pursuant to Section 216.346, F.S., any contract or grant between state agencies, including any contract involving the State University System or the State Community College System, the agency receiving the contract or grant shall charge no more than 5 percent for overhead or indirect costs or any cost not required for the payment of direct costs. This restriction applies to both state and federally funded contracts.

    Professional Services

    Section 287.055, F.S., specifically relates to the acquisition of professional architectural, engineering, landscape architecture, or land surveying or mapping.

    Section 287.055(3)(a), F.S., requires each agency to publicly announce, in a uniform and consistent manner each occasion when architectural, engineering or surveying and mapping services are required to be purchased for a project, the basic construction cost of which is estimated by the agency to exceed the threshold amount provided in Section 287.017, F.S., for Category Five or for a planning or study activity when the fee for such services exceeds the threshold amount provided in Section 287.017, F.S., for Category Two.

    Exception: When the agency head certifies there exists a valid emergency.

    The public notice shall include a general description of the project and shall indicate how interested consultants may apply for consideration. Agencies are required to submit evidence of compliance with the Consultants Competitive Negotiation Act (CCNA) along with the first payment.

    Section 287.055(4), F.S., provides for competitive selection of firms to provide professional services. The competitive selection process includes an evaluation of the qualifications and performance data of the firms submitting proposals and a selection of at least three firms in order of preference. Evidence of compliance with competitive selection requirements must be submitted with the first voucher requesting payments.

    Section 287.055, F.S., provides for the competitive negotiation of contracts for professional services. The agency must first attempt to negotiate a contract with the firm determined to be the most qualified. If the agency is unable to negotiate a contract with the firm determined to be most qualified at a price the agency determines to be fair, competitive and reasonable, negotiations shall be formally terminated. The agency should then undertake negotiations with the second most qualified firm. If negotiations fail with the second most qualified firm, then the agency must terminate negotiations. The process should be repeated in the order of the competence and qualification of the firms until an agreement is reached. Evidence must be submitted to document that the agency has negotiated a contract that provides for compensation that is fair, competitive and reasonable.

    Payment criteria for professional services contracts includes, but are not limited to:

    1. Cost reimbursements – See “Cost Reimbursement Contracts” of this section for cost reimbursement contract payments.

    2. Percentage of Completion - Payment request must include an invoice which shows the total lump sum amount times the percentage of work completed, less the amount paid to date to arrive at the current amount due.

    3. Fixed Payment - This payment type may be fixed rate or fixed fee. The fixed-rate payment request must include an invoice that shows unit of deliverables and applicable unit rates to arrive at the total invoice amount. The fixed-fee payment request must provide the deliverable along with the scheduled fixed amount authorized in the contract.

    4. Cost Plus Fixed - This payment type may be a combination of items 1 and 2 or items 1 and 3 above.

    Also see “Purchasing Card Transactions – Contractual Services

    CONTRACTUAL SERVICES EXHIBIT 1 - Contract Review Checklist - Long Form
    CONTRACTUAL SERVICES EXHIBIT 2 - Contract Review Checklist - Short Form
    CONTRACTUAL SERVICES EXHIBIT 3 - Summary of Contract/Purchase Order

    COUNTY HEALTH UNIT TRUST FUND

    Pursuant to Section 216.341, F.S., monies of a county health unit trust fund may be expended by the Department of Health for the respective county health departments in accordance with budgets and plans agreed upon by the county authorities of each health unit and the Department of Health. County health units are subject to Section 287.057, F.S., for procurement requirements unless the payment information includes a written certification from the agency stating that county purchasing procedures were followed. The certification must contain a cross reference to the specific sections of the county purchasing procedures being applied.

    Also see “Purchasing Card Transactions – County Health Unit Trust Fund.”

    CREDIT CARD FEES

    Agencies are not to contract with any credit card company that requires annual fees. Agencies should use the State of Florida Purchasing Card Program. (See “Purchasing Card Transactions” section.)

    DEFERRED-PAYMENT COMMODITY CONTRACTS

    These purchases must be made in accordance with Section 287.063, F.S. An agency entering into any commodity contract requiring deferred payments in excess of $30,000 and payment of interest, must be sent to the Bureau of Accounting for prior approval and pre-audit.

    This program is the “Consolidated Equipment Financing Program” (CEFP). Information on this program may be found on the DFS website, http://www.myfloridacfo.com/aadir/cefp/.

    Examples of equipment this program has financed are computers, copiers, communication systems, laboratory equipment, medical equipment and printers.

    Payments for CEFP should be object coded 6100 (interest), and 6200 (principal).

    Universities are exempt from this requirement, but can go through CEFP in order to take advantage of the normally lower contracted interest rate than that which is on the open market.

    EDUCATIONAL COURSES

    General

    State agencies may pay for educational training and courses that are designed to improve the efficiency of a qualified employee when the courses are directly related to the employee's current job duties. Educational courses intended to prepare an employee for a job primarily of benefit to the employee and only indirectly beneficial to the agency, do not constitute a proper expenditure of public funds absent a specific legislative authorization. All required books associated with the course may also be expended from state funds as long as the State is only paying for courses for employees which primarily benefit the State rather than the employee. Any books purchased with state funds must become the property of the State. Cost for courses that will primarily benefit the employee rather than the State will not be paid. The invoice for payment must include the improved efficiency or the benefit to the State derived from the training or course and the position title of the employee.

    Community Leadership Courses

    Various chambers of commerce throughout the State offer training courses. The courses are entitled “Leadership (city or area).” The stated purpose of these courses is to improve the quality, quantity and effectiveness of leadership in the city or area by:

    1. Identifying and selecting current and potential leaders from diverse backgrounds.

    2. Exposing the participants to social, economic and political issues facing the city or area in order to stimulate their interest in seeking leadership positions within the community.

    3. Providing the participants with factual information about the city or area.

    4. Building and maintaining networks of community leaders who know and respect each other.

    Generally, meeting these objectives do not appear to fall within the statutory duties and responsibilities of state agencies. Therefore, payment by a state agency for an employee to attend such a course would generally not be a proper expenditure of state funds.

    Agencies with specific statutory authority to provide this training to employees and wishing to send an employee to community leadership courses should request prior approval from the:

    Department of Financial Services
    Bureau of Auditing
    200 East Gaines Street
    Tallahassee, Fl. 32399-0355

    Requests must cite the specific statutory authority for the agency to send employees to the classes or cite the specific statutory duty or responsibility, which necessitates the agency sending an employee to such a class. Any payment request, which does not include prior approval may be denied.

    EQUIPMENT LEASES

    Equipment leases that have an annual cost anticipated to exceed the purchasing Category Two threshold established in Section 287.017, F.S., requires prior approval from the Bureau of Accounting. If the monthly lease cost for equipment is greater than one-twelfth of the Category Two threshold, but the annual cost will be less than the Category Two threshold, each voucher submitted for payment should include documentation indicating that the annual cost will not exceed the Category Two threshold.

    In computing the total lease cost for determination as to whether the annual lease cost exceeds the Category Two threshold, maintenance and other periodic costs to be incurred by the lessee for the equipment must be added to the lease payments. Equipment is defined as a functional unit and not as an individual component. For example, an agency may not acquire, by lease, equipment costing less than Category Two threshold annually, avoiding Bureau of Accounting approval, and then add other components to the equipment which increases the total annual cost above the threshold.

    Requests for Bureau of Accounting approval to lease equipment above the Category Two threshold should be submitted with the Lease Checklist (http://www.myfloridacfo.com/aadir/cefp/) and addressed to:

    Department of Financial Services
    Bureau of Auditing
    200 East Gaines Street
    Tallahassee, Fl. 32399-0355

    Vouchers submitted for payment of leases requiring prior approval of the Bureau of Accounting must show the lease approval number assigned by the Bureau of Accounting.

    Regardless of the annual cost of the lease or the acquisition method, it shall be the responsibility of the procuring agency to evaluate and maintain documentation to support that a lease is economically prudent and cost-effective.

    Agencies with special needs for leasing equipment, such as short-term needs for surveying, monitoring and research connected with wildlife studies or preservation are exempt from the requirement to obtain prior approval. A certification from the agency head or designee supporting the decision to lease must be attached to the voucher submitted for payment.

    The Bureau of Accounting will gladly review leases less than or equal to Category Two, upon agency request.

    Also see “Purchasing Card Transactions – Leases of Buildings and Equipment.

    EXECUTIVE ORDERS

    The Governor has the authority to sign executive orders under Section 252.36, F.S. All executive orders have the full force and effect of law. Most executive orders are for emergencies dealing with hurricanes, tropical storms, wildfires, floods, tornadoes, citrus canker and other states of emergency. An executive order may suspend the purchasing rules and regulations.

    FURNITURE

    While state agencies may purchase office and public area furniture in accordance with the State term contract in effect at the time of purchase, price limits have been established for purchasing the following furniture:

    1. Chairs (ergonomic) $ 675
    2. Sofas 3 seat $ 1,400
    3. Love Seats 2 seat $ 1,100
    4. Wing Back (or similar chair) $ 800
    5. End Tables $ 400
    6. Coffee or 48” Conf. Table $ 600
    7. Task Lighting (each) $ 175

    *Note: Item Nos. 2, 3, 4, 5, and 6 listed above may only be purchased for reception or other public areas.

    The price limits stated above also apply to furniture purchased under contracts entered into by an agency or university and to PRIDE furniture.

    If an agency needs to purchase a chair that exceeds the established limit in order to provide a reasonable accommodation under the ADA, the agency must process the invoice in accordance with the instructions in Americans with Disabilities Act section.

    All other exceptions must be fully justified by the agency and approved in advance by the Bureau of Auditing. Requests for exceptions should be addressed to:

    Department of Financial Services
    Bureau of Auditing
    200 East Gaines Street
    Tallahassee, Fl. 32399-0355

    INSURANCE

    For agencies subject to the provisions of Section 287.022, F.S., payments for the purchase of insurance, with the exception of title insurance for land purchases, must have proof of approval by DMS or a certification of emergency.

    INVOICES

    General

    Invoices to be submitted to the Bureau of Auditing for payment must be scheduled by the agency wishing to make payment using a standard format prescribed by the Department of Financial Services (DFS). Payments submitted to the Bureau of Auditing for disbursement or transfer of funds shall only be those payments authorized by law. If such authority is not evident by the nature of the payment, the agency must cite the law which has expressly authorized the agency to expend funds for the purpose under consideration or, must be considered to have been given such authority by necessary implication in order to carry out a duty or function expressly imposed or authorized by law. The information listed in this section provides general guidelines that are common to all expenditures.

    Invoice Requirements

    The following requirements apply to all invoices submitted for payment.

    1. An invoice submitted for payment of an expenditure must be a legible copy. The original invoice is maintained by the agency. If an agency is filing a copy of the invoice as its original, it must contain the statement “original invoice not available, agency records show that this obligation has not been previously paid” with the signature of the person certifying the statement. Thermofax copies, because of their temporary nature, shall not be filed as the original at the agency. It should be copied on a standard photocopy machine.

    2. Invoices for commodities must clearly reflect a description of the item or items, number of units and cost per unit. Numerical code descriptions alone will not be accepted.

    Invoices for contractual services must also clearly reflect the services/deliverables that were provided. Invoices for fixed unit rate contracts must show the number of units and cost per unit. Invoices for contracts paid out on a reimbursement basis or a fixed rate for a specific time period, e.g. quarterly, monthly, etc., must be supported by documentation (such as a progress report) that clearly reflects the services/deliverables provided during the invoice period.

    3. No balances for prior purchases will be paid unless supported by an invoice.

    4. A statement will not be paid unless it can be clearly shown that the vendor intended it to be used as an invoice.

    5. All invoices shall be in accordance with Section 215.422, F.S., and the rules set forth in Rule 3A-24, F.A.C.

    6. Invoices that are split payments require information showing the distribution of charges between funds for such invoice and a cross-reference of the statewide document numbers for all related vouchers.

    7. Invoices and other supporting documentation included in a voucher must be grouped by vendor and arranged in the same order as the vendors listed on the voucher schedule. If the voucher includes multiple invoices from the same vendor, the voucher must include a calculator tape or other evidence showing that the total of the invoices is equal to the amount shown on the voucher schedule.

    8. Acronyms and non-standard abbreviations for programs or organizational units within an agency should not be used in the supporting documentation unless an explanation is also included.

    INVOICE SAMPLING

    A selected sample of invoices for disbursement requests equal to or less than the established dollar threshold for an agency must be submitted to the Bureau of Auditing for pre-audit review. Sampling thresholds may vary by agency and/or voucher processing site, and could be changed at any point in time. Invoices equal to or less than the established dollar threshold for an agency, and not included in the sample, will be systematically posted and should not be submitted to the Bureau of Auditing.

    Invoices less than or equal to the threshold and included in the sample, invoices greater than the threshold, and invoices submitted to this office by specific request will be pre-audited by Bureau of Auditing staff. Flags are set in the Voucher Audit System for certain vendors, object codes and other criteria. Payment requests for these items generally require special review or handling by Bureau of Auditing staff. Vouchers and copies of supporting documentation for flagged items will continue to be submitted to this office, regardless of the dollar amount.

    JOURNAL TRANSFERS

    Journal transfers (JTs) are vouchers (transactions) that allow state agencies to make payments to other state agencies in lieu of issuing a state warrant, correct disbursements made in error, allocate costs within an agency, make transfers or distributions that are required by law and restore current year expenditure refunds to their original disbursement accounts. Pursuant to Rule 3A-40.002(24), F.A.C., all payments to state agencies shall be made by journal transfer unless the necessity for making payment by warrant is documented by the agency and approved by the CFO.

    There are three types of journal transfers: JT-1, JT-2 and JT-3. A JT-1 is referred to as a journal redistribution. A JT-2 can be one of three different voucher types: a journal advice, a non-operating transfer or an expenditure refund. A JT-3 involves the transfer of budget release between accounts with different Internal Budget Indicators (IBI). The JT-3 will not be discussed in this reference manual as it is a function of the Bureau of Accounting.

    Journal Transfer One (JT-1)

    I. Journal Redistribution

    The journal redistribution (JT-1) is used to make corrections of disbursements made in error and to allocate costs within an agency. JT-1s should not be used to correct non-operating transfers or service charge journal transfers. Allocating costs within an agency usually occurs when an agency wants to issue one warrant to a vendor and then charge individual sections or other units for their pro rata share of the total cost. See JT Exhibit 1 located at the end of this section, for an example of a JT-1. Transaction codes 20 and 21 are used to update the accounting system as follows:

    Transaction Code 20 - INCREASE (disbursing/initiating side of a JT-1):

    Increase journal disbursement (and disbursements year-to-date)
    Decrease unexpended release balance (budget)
    Decrease cash balance

    Transaction Code 21 - DECREASE (receiving/benefiting side of a JT-1):

    Decrease journal disbursements (and disbursements year-to-date)
    Increase unexpended release balance (budget)
    Increase cash balance

    II. Auto-posting of JT-1s

    JT-1s input into Departmental FLAIR are automatically posted to the Central Accounting System during the overnight update. Those JT-1s will include the following statement--SYSTEM POSTED JT1 - RETAIN ALL DOCUMENTATION.

    JT-1s between state agencies are not auto-posted and must be submitted to the Bureau of Auditing. Supporting information must be provided as to why it is necessary to process the transaction between state agencies as a JT-1 rather than a JT-2.

    Other information required to support JT-1s include a reference to the original transaction or a copy of the original transaction being corrected or reallocated.

    JT-1s that contain negative balances (cash, budget or other atypical balances) will not be auto-posted. The system will attempt to post all negative JT-1s for five consecutive nights. JT-1s not posted in five nights will be automatically deleted by the system.

    III. JT-1 Focus System

    There exists within FLAIR a Focus system that allows the Bureau of Auditing to view auto-posted JT-1 transactions with certain predetermined criteria. The current criteria and parameters set in the FOCUS system are:

    Transaction amounts exceeding a specified dollar amount. Auditors will review transactions in amounts specified by the Bureau of Auditing. This is done to provide a review process for large dollar amount JT-1s. Selected JT-1s will be requested for further review based upon judgment of the reviewing auditor.

    Transactions between categories within a state agency (OLO). These transactions will be reviewed to determine if expenditures that were previously paid from one category are appropriate to be transferred to another category. For example, if an agency pays for an item using OCO funds and then determines that the payment should have been paid using expense funds, then a transaction transferring the expenditure to the appropriate category would be acceptable. Upon request for the selected sample, the agency will be required to provide a copy of the original transaction along with necessary supporting documentation to substantiate the transfer of funds between categories.

    Transactions with negative amounts. The Bureau of Auditing will review such transactions to determine if it appears that an agency is utilizing this option frequently. Since the JT-1 allows an agency to utilize transaction codes to increase or decrease amounts in an account code, agencies may be contacted to determine why it is necessary to use negative transactions on a JT-1.

    Transfers of expenditures from trust fund to the General Revenue Fund. The review process is conducted to determine if the transaction originally paid from a trust fund and is now being charged to a general revenue fund is appropriate.

    Since all JT-1s with the exception of those crossing OLOs, are auto posted, the Bureau of Auditing will routinely review these transactions. The Bureau of Auditing may request supporting documentation for selected auto-posted JT-1s to determine if the transaction is valid. If documentation does not support the transaction, the agency will be asked to reverse the entry. If the agency does not reverse the entry, the Bureau of Auditing will reverse the entry and notify the agency.

    Journal Transfer Two (JT-2)

    As stated earlier, the JT-2 can be one of four different voucher types: journal advice, operating disbursement, non-operating transfer and expenditure refund.

    I. Journal Advice

    The journal advice, JT Exhibit 2 is primarily used to make payments to other state agencies for goods and services received. Supporting information for payments to other state agencies should include at a minimum the invoice that provides a description of the goods or services, the benefiting agency's account code, the quantity and unit price, if applicable, and the amount being charged. Any additional information necessary to substantiate the payment based on the type of purchase being made must also be included.

    Agencies will also use the journal advice to make payments of the service charge to general revenue, to invest funds with the Department of Financial Services, Division of Treasury, and to process payments to the Division of State Group Insurance (DSGI). Transaction codes 25 and 45 are used, with the journal advice, to update the Central Accounting System as follows:

    Transaction Code 25 - INCREASE (disbursing/initiating side of a journal advice):

    Increase journal disbursements (and year-to-date disbursements)
    Decrease unexpended release balance (budget)
    Decrease cash balance

    Transaction Code 45 - INCREASE (receiving/benefiting side of a journal advice):

    Increase journal receipts
    Increase cash balance

    Investments

    The purpose of the investment journal advice is to allow agencies to invest funds with the Division of Treasury. Investment JT-2s will have an object code of 8300XX. Investment JT-2s received in the Bureau of Auditing by 2:00 pm will be processed on that date. Investments received after 2:00 p.m. will be processed the following day. JT Exhibit 3 is an example of an investment JT-2.

    Service Charges to General Revenue Fund

    Pursuant to Section 215.20, F.S., a service charge shall be deducted from income of a revenue nature deposited in certain trust funds. This service charge is transferred to the General Revenue Fund via a JT-2 submitted to the Bureau of Auditing. Service charge JT-2s will have an object code of 880XXX. JT-2s containing negative cash or budget will not be returned to the agency or deleted without consulting with the Bureau of Accounting. JT Exhibit 4 is an example of a service charge JT-2.

    Employer/Employee Contributions

    Payments to employer/employee contributions (JT Exhibit 5) must have approval from the DSGI prior to being submitted to the Bureau of Auditing. The approval must be stamped on the face of the voucher schedule. JT Exhibit 5 is an example of this JT with the approval from DSGI.

    II. Category 10XXXX- Operating Disbursements

    This type of transaction is used when the agency receives the appropriation in a special category (10XXXX) through the General Appropriations Act and is required to “transfer” the funds to another state entity; the journal entry will normally be an operating disbursement. If the 10XXXX category used has been identified as “H” in the Itemization of Expenditures (IOE) records in LAS/PBS, the receipt category must be 001000, state grants. These are operating receipts and disbursements, though nothing is being purchased and no benefit is received by the payi