Senate Bill sb2566
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
By Senator Atwater
25-1538A-03 See HB 1603
1 A bill to be entitled
2 An act relating to local government
3 accountability; amending s. 11.40, F.S.;
4 revising duties of the Legislative Auditing
5 Committee; amending s. 11.45, F.S.; revising
6 reporting requirements of the Auditor General;
7 amending s. 61.181, F.S.; correcting a
8 cross-reference; amending s. 75.05, F.S.;
9 deleting a requirement for an independent
10 special district to submit a copy of a
11 complaint to the Division of Bond Finance of
12 the State Board of Administration; amending s.
13 112.625, F.S.; revising the definition of
14 "governmental entity" to include counties and
15 district school boards; amending s. 112.63,
16 F.S.; providing for additional information to
17 be provided to the Department of Management
18 Services in actuarial reports with regard to
19 retirement systems and plans and providing
20 procedures therefor; providing for notification
21 of the Department of Revenue and the Department
22 of Financial Services in cases of noncompliance
23 and authorizing the withholding of certain
24 funds; requiring the Department of Management
25 Services to notify the Department of Community
26 Affairs in the case of affected special
27 districts; amending s. 130.04, F.S.; revising
28 provisions governing notice of bids and
29 disposition of bonds; amending s. 132.02, F.S.;
30 revising provisions relating to the
31 authorization to issue refund bonds; amending
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 s. 132.09, F.S.; revising provisions relating
2 to the notice of sale, bids, and awards and
3 private sale of bonds; amending s. 163.05,
4 F.S.; revising provisions governing the Small
5 County Technical Assistance Program; amending
6 s. 166.121, F.S.; revising provisions governing
7 the issuance of bonds by a municipality;
8 amending s. 166.241, F.S.; providing a
9 municipal budget amendment process and
10 requirements; amending s. 189.4044, F.S.;
11 revising special procedures for determination
12 of inactive special districts; amending s.
13 189.412, F.S.; revising duties of the Special
14 District Information Program of the Department
15 of Community Affairs; amending s. 189.418,
16 F.S.; revising reporting requirements of newly
17 created special districts; authorizing the
18 governing body of a special district to amend
19 its budget; amending s. 189.419, F.S.; revising
20 provisions relating to the failure of special
21 districts to file required reports; amending s.
22 189.421, F.S.; revising provisions governing
23 the failure of special districts to disclose
24 financial reports; providing for extension of
25 time for the filing of said reports; providing
26 remedies for noncompliance; providing for
27 attorney's fees and costs; amending s. 189.428,
28 F.S.; revising provisions governing the special
29 district oversight review process; amending s.
30 189.439, F.S.; revising provisions governing
31 the issuance of bonds by special districts;
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 amending s. 215.981, F.S.; exempting state
2 agency direct-support organizations and citizen
3 support organizations meeting specified expense
4 levels from audit requirements; amending s.
5 218.075, F.S.; revising provisions governing
6 the reduction or waiver of permit processing
7 fees for certain counties; amending s. 218.32,
8 F.S., relating to annual financial reports;
9 requiring the Department of Financial Services
10 to notify the Speaker of the House of
11 Representatives and the President of the Senate
12 of any municipality that has not had financial
13 activity for a specified period of time;
14 providing that such notice is sufficient to
15 initiate dissolution procedures; amending s.
16 218.321, F.S.; correcting a cross-reference;
17 amending s. 218.36, F.S.; revising reporting
18 requirements for boards of county commissioners
19 relating to the failure of a county officer to
20 comply with the provisions of the section;
21 amending s. 218.369, F.S.; revising the
22 definition of "unit of local government" to
23 include district school boards; renaming pt. V
24 of ch. 218, F.S., as "Local Governmental Entity
25 and District School Board Financial
26 Emergencies"; amending s. 218.50, F.S.;
27 renaming ss. 218.50-218.504, F.S., as the
28 "Local Governmental Entity and District School
29 Board Act"; amending s. 218.501, F.S.; revising
30 the stated purposes of pt. V of ch. 218, F.S.;
31 amending s. 218.502, F.S.; revising the
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 definition of "local governmental entity";
2 amending s. 218.503, F.S.; revising provisions
3 governing the determination of financial
4 emergency for local governments and district
5 school boards; amending s. 218.504, F.S.;
6 revising provisions relating to the authority
7 of the Governor and authorizing the
8 Commissioner of Education to terminate all
9 state actions pursuant to ss. 218.50-218.504,
10 F.S.; repealing ch. 131, F.S., consisting of
11 ss. 131.01, 131.02, 131.03, 131.04, 131.05, and
12 131.06, F.S., relating to refunding bonds of
13 counties, municipalities, and special
14 districts; repealing s. 132.10, F.S., relating
15 to minimum sale price of bonds; repealing s.
16 165.052, F.S., relating to special dissolution
17 procedures for municipalities; repealing s.
18 189.409, F.S., relating to determination of
19 financial emergencies of special districts;
20 repealing s. 189.422, F.S., relating to actions
21 of the Department of Community Affairs and
22 special districts; repealing s. 200.0684, F.S.,
23 relating to an annual compliance report of the
24 Department of Community Affairs regarding
25 special districts; repealing s. 218.37(1)(h),
26 F.S., relating to the requirement that the
27 Division of Bond Finance use a served copy of
28 the complaint for bond validation to verify
29 compliance by special districts with the
30 requirements in s. 218.38, F.S.; transferring a
31 position from the Executive Office of the
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 Governor to the Department of Financial
2 Services; providing an effective date.
3
4 Be It Enacted by the Legislature of the State of Florida:
5
6 Section 1. Paragraphs (a) and (b) of subsection (5) of
7 section 11.40, Florida Statutes, are amended to read:
8 11.40 Legislative Auditing Committee.--
9 (5) Following notification by the Auditor General, the
10 Department of Financial Services Banking and Finance, or the
11 Division of Bond Finance of the State Board of Administration
12 of the failure of a local governmental entity, district school
13 board, charter school, or charter technical career center to
14 comply with the applicable provisions within s. 11.45(5)-(7),
15 s. 218.32(1), or s. 218.38, the Legislative Auditing Committee
16 may schedule a hearing. If a hearing is scheduled, the
17 committee shall determine if the entity should be subject to
18 further state action. If the committee determines that the
19 entity should be subject to further state action, the
20 committee shall:
21 (a) In the case of a local governmental entity or
22 district school board, direct request the Department of
23 Revenue and the Department of Financial Services Banking and
24 Finance to withhold any funds not pledged for bond debt
25 service satisfaction which are payable to such entity until
26 the entity complies with the law. The committee, in its
27 request, shall specify the date such action shall begin, and
28 the directive request must be received by the Department of
29 Revenue and the Department of Financial Services Banking and
30 Finance 30 days before the date of the distribution mandated
31 by law. The Department of Revenue and the Department of
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 Financial Services Banking and Finance are authorized to
2 implement the provisions of this paragraph.
3 (b) In the case of a special district, notify the
4 Department of Community Affairs that the special district has
5 failed to comply with the law. Upon receipt of notification,
6 the Department of Community Affairs shall proceed pursuant to
7 the provisions specified in s. ss. 189.421 and 189.422.
8 Section 2. Subsection (5), paragraph (e) of subsection
9 (7), and subsection (8) of section 11.45, Florida Statutes,
10 are amended to read:
11 11.45 Definitions; duties; authorities; reports;
12 rules.--
13 (5) PETITION FOR AN AUDIT BY THE AUDITOR GENERAL.--The
14 Legislative Auditing Committee shall direct the Auditor
15 General to make an a financial audit of any municipality
16 whenever petitioned to do so by at least 20 percent of the
17 electors of that municipality. The supervisor of elections of
18 the county in which the municipality is located shall certify
19 whether or not the petition contains the signatures of at
20 least 20 percent of the electors of the municipality. After
21 the completion of the audit, the Auditor General shall
22 determine whether the municipality has the fiscal resources
23 necessary to pay the cost of the audit. The municipality shall
24 pay the cost of the audit within 90 days after the Auditor
25 General's determination that the municipality has the
26 available resources. If the municipality fails to pay the cost
27 of the audit, the Department of Revenue shall, upon
28 certification of the Auditor General, withhold from that
29 portion of the distribution pursuant to s. 212.20(6)(d)6.
30 which is distributable to such municipality, a sum sufficient
31
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 to pay the cost of the audit and shall deposit that sum into
2 the General Revenue Fund of the state.
3 (7) AUDITOR GENERAL REPORTING REQUIREMENTS.--
4 (e) The Auditor General shall notify the Governor or
5 the Commissioner of Education, as appropriate, and the
6 Legislative Auditing Committee of any audit report reviewed by
7 the Auditor General pursuant to paragraph (b) that which
8 contains a statement that a the local governmental entity or
9 district school board has met one or more of the conditions
10 specified is in a state of financial emergency as provided in
11 s. 218.503. If the Auditor General requests a clarification
12 regarding information included in an audit report to determine
13 whether a local governmental entity or district school board
14 has met one or more of the conditions specified in s. 218.503
15 is in a state of financial emergency, the requested
16 clarification must be provided within 45 days after the date
17 of the request. If the local governmental entity or district
18 school board does not comply with the Auditor General's
19 request, the Auditor General shall notify the Legislative
20 Auditing Committee. If, after obtaining the requested
21 clarification, the Auditor General determines that the local
22 governmental entity or district school board has met one or
23 more of the conditions specified in s. 218.503 is in a state
24 of financial emergency, he or she shall notify the Governor or
25 the Commissioner of Education, as appropriate, and the
26 Legislative Auditing Committee.
27 (8) RULES OF THE AUDITOR GENERAL.--The Auditor
28 General, in consultation with the Board of Accountancy, shall
29 adopt rules for the form and conduct of all financial audits
30 performed by independent certified public accountants pursuant
31 to ss. 215.981, 218.39, 1001.453, 1004.28, and 1004.70. The
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 rules for audits of local governmental entities and district
2 school boards must include, but are not limited to,
3 requirements for the reporting of information necessary to
4 carry out the purposes of the Local Governmental Entity and
5 District School Board Government Financial Emergencies Act as
6 stated in s. 218.501.
7 Section 3. Subsection (10) of section 61.181, Florida
8 Statutes, is amended to read:
9 61.181 Depository for alimony transactions, support,
10 maintenance, and support payments; fees.--
11 (10) Compliance with the requirements of this section
12 shall be included as part of the annual county audit required
13 pursuant to s. 218.39 11.45.
14 Section 4. Subsection (3) of section 75.05, Florida
15 Statutes, is amended to read:
16 75.05 Order and service.--
17 (3) In the case of independent special districts as
18 defined in s. 218.31(7), a copy of the complaint shall be
19 served on the Division of Bond Finance of the State Board of
20 Administration. Notwithstanding any other provision of law,
21 whether a general law or special act, validation of bonds to
22 be issued by a special district, other than a community
23 development district established pursuant to chapter 190, as
24 provided in s. 190.016(12), is not mandatory, but is at the
25 option of the issuer. However, the validation of bonds issued
26 by such community development districts shall not be required
27 on refunding issues.
28 Section 5. Subsection (5) of section 112.625, Florida
29 Statutes, is amended to read:
30 112.625 Definitions.--As used in this act:
31
8
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (5) "Governmental entity" means the state, for the
2 Florida Retirement System, and the county, municipality, or
3 special district, or district school board which is the
4 employer of the member of a local retirement system or plan.
5 Section 6. Subsection (4) of section 112.63, Florida
6 Statutes, is amended to read:
7 112.63 Actuarial reports and statements of actuarial
8 impact; review.--
9 (4) Upon receipt, pursuant to subsection (2), of an
10 actuarial report, or upon receipt, pursuant to subsection (3),
11 of a statement of actuarial impact, the Department of
12 Management Services shall acknowledge such receipt, but shall
13 only review and comment on each retirement system's or plan's
14 actuarial valuations at least on a triennial basis. If the
15 department finds that the actuarial valuation is not complete,
16 accurate, or based on reasonable assumptions or otherwise
17 fails to satisfy the requirements of this part, the department
18 requires additional information necessary to complete its
19 review of the actuarial valuation of a system or plan or
20 information necessary to satisfy the duties of the department
21 pursuant to s. 112.665(1), or if the department does not
22 receive the actuarial report or statement of actuarial impact,
23 the department shall notify the administrator of the affected
24 retirement system or plan and the affected governmental entity
25 local government and request appropriate adjustment, the
26 additional information, or the required report or statement.
27 The notification shall inform the administrator of the
28 affected retirement system or plan and the affected
29 governmental entity of the consequences for failure to comply
30 with the requirements of this subsection. If, after a
31 reasonable period of time, a satisfactory adjustment is not
9
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 made or the report, statement, or additional information is
2 not provided, the department may notify the Department of
3 Revenue and the Department of Financial Services of such
4 noncompliance, in which case the Department of Revenue and the
5 Department of Financial Services shall withhold any funds not
6 pledged for bond debt service satisfaction that are payable to
7 the affected governmental entity until the adjustment is made
8 or the report, statement, or additional information is
9 provided to the department. The department shall specify the
10 date such action is to begin and notification by the
11 department must be received by the Department of Revenue, the
12 Department of Financial Services, and the affected
13 governmental entity 30 days before the date the action is to
14 begin.
15 (a) Within 21 days after receipt of the notice, the
16 affected governmental entity local government or the
17 department may petition for a hearing under the provisions of
18 ss. 120.569 and 120.57 with the Department of Management
19 Services. The Department of Revenue and the Department of
20 Financial Services shall not be parties to any such hearing
21 but may request to intervene if requested by the Department of
22 Management Services or if either the Department of Revenue or
23 the Department of Financial Services determines its interests
24 may be adversely affected by the hearing. If the
25 administrative law judge recommends in favor of the
26 department, the department shall perform an actuarial review
27 or prepare the statement of actuarial impact, or collect the
28 requested information. The cost to the department of
29 performing such actuarial review, or preparing such statement,
30 or collecting the requested information shall be charged to
31 the affected governmental entity of which the employees are
10
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 covered by the retirement system or plan. If payment of such
2 costs is not received by the department within 60 days after
3 receipt by the affected governmental entity of the request for
4 payment, the department shall certify to the Department of
5 Revenue and the Department of Financial Services Comptroller
6 the amount due, and the Department of Revenue and the
7 Department of Financial Services Comptroller shall pay such
8 amount to the Department of Management Services from any funds
9 not pledged for bond debt service satisfaction that are
10 payable to the affected governmental entity of which the
11 employees are covered by the retirement system or plan. If the
12 administrative law judge recommends in favor of the affected
13 governmental entity local retirement system and the department
14 performs an actuarial review, prepares the statement of
15 actuarial impact, or collects the requested information, the
16 cost to the department of performing the actuarial review,
17 preparing the statement, or collecting the requested
18 information shall be paid by the Department of Management
19 Services.
20 (b) In the case of an affected special district, the
21 Department of Management Services shall also notify the
22 Department of Community Affairs. Upon receipt of notification,
23 the Department of Community Affairs shall proceed pursuant to
24 the provisions of s. 189.421 with regard to the special
25 district.
26 Section 7. Section 130.04, Florida Statutes, is
27 amended to read:
28 130.04 Sale Notice for bids and disposition of
29 bonds.--In case the issuing of bonds shall be authorized by
30 the result of such election, the county commissioners shall
31 sell the bonds in the manner provided in s. 218.385 cause
11
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 notice to be given by publication in a newspaper published in
2 the county, or in some newspaper published in the same
3 judicial circuit, if there be none published in the county,
4 that they will receive bids for the purchase of county bonds
5 at the clerk's office, on a date not less than 10 days nor
6 more than 60 days from the first publication of such notice.
7 The notice shall specify the amount of bonds offered for sale,
8 the rate of interest, and the time when principal and
9 installments of interest shall be due and payable. Any and all
10 bids shall be rejected if the commissioners shall deem it to
11 the best interest for the county so to do, and they may cause
12 a new notice to be given in like manner inviting other bids
13 for said bonds; provided, that when the rate of interest on
14 said bonds exceeds 5 percent per annum, said bonds shall not
15 be sold for less than 95 cents on the dollar, but when any
16 bonds have heretofore been provided for by election, and the
17 rate of interest is 5 percent per annum, or less, that in such
18 cases the county commissioners may accept less than 95 cents
19 upon the dollar, in the sale of said bonds, or for any portion
20 of said bonds not already sold; provided, however, no bonds
21 shall be sold for less than 90 cents on the dollar.
22 Section 8. Subsection (1) of section 132.02, Florida
23 Statutes, is amended to read:
24 132.02 Taxing units may refund obligations.--
25 (1) Each county, municipality, city, town, special
26 road and bridge district, special tax school district, or and
27 other taxing district districts in this state, herein
28 sometimes called a unit, may issue, pursuant to a resolution
29 or resolutions of the governing body thereof (meaning thereby
30 the board or body vested with the power of determining the
31 amount of tax levies required for taxing the taxable property
12
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 of such unit for the purpose of such unit) and either with or
2 without the approval of such bonds at an election, except as
3 may be required by the Constitution of the state, bonds of
4 such unit for the purpose of refunding any or all bonds,
5 coupons, or interest on any such bonds, or coupons or paving
6 certificates of indebtedness or interest on any such paving
7 certificates of indebtedness, now or hereafter outstanding, or
8 any other funded debt, all of which are herein referred to as
9 bonds, whether such unit created such indebtedness or has
10 assumed, or may become liable therefor, and whether
11 indebtedness to be refunded has matured or to thereafter
12 become matured.
13 Section 9. Section 132.09, Florida Statutes, is
14 amended to read:
15 132.09 Sale of bonds Notice of sale; bids and award;
16 private sale.--When sold, the refunding bonds (except as
17 otherwise expressly provided) shall be sold in the manner
18 provided in s. 218.385 pursuant to the terms of a notice of
19 sale which shall be published at least twice. The first
20 publication to be not less than 7 days before the date fixed
21 for the sale and to be published in a newspaper published in
22 the unit, or if no newspaper is published in the unit, then in
23 a newspaper published in the county, or if no newspaper is
24 published in the county, then in a newspaper published in
25 Tallahassee, and in the discretion of the governing body of
26 the unit may be published in a financial newspaper in the City
27 of New York. Such notices shall state the time and place and
28 when and where sealed bids will be received, shall state the
29 amount of bonds, their dates, maturities, denominations and
30 interest rate or rates (which may be a maximum rate), interest
31 payment dates, an outline of the terms, if any, on which they
13
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 are redeemable or become payable before maturity, the amount
2 which must be deposited with the bid to secure its performance
3 if accepted, and such other pertinent information as the
4 governing body of the unit may determine. The notice of sale
5 may require the bidders to fix the interest rate or rates that
6 the bonds are to bear subject to the terms of the notice and
7 the maximum rate permitted by this chapter. The award of the
8 bonds shall be made by the governing body of the unit to the
9 bidder making the most advantageous bid which shall be
10 determined by the governing body in its absolute and
11 uncontrolled discretion. The right to reject all bids shall
12 be reserved to the governing body of the unit. If no bids are
13 received at such public sale, or if all bids are rejected, the
14 bonds may be sold without notice at private sale at any time
15 within one year thereafter, but such bonds shall not be sold
16 at private sale on terms less favorable to the unit than were
17 contained in the best bid at the prior public sale.
18 Section 10. Paragraph (a) of subsection (2) of section
19 163.05, Florida Statutes, is amended to read:
20 163.05 Small County Technical Assistance Program.--
21 (2) Recognizing the findings in subsection (1), the
22 Legislature declares that:
23 (a) The financial difficulties fiscal emergencies
24 confronting small counties require an investment that will
25 facilitate efforts to improve the productivity and efficiency
26 of small counties' structures and operating procedures.
27 Section 11. Subsection (2) of section 166.121, Florida
28 Statutes, is amended to read:
29 166.121 Issuance of bonds.--
30 (2) The governing body of a municipality shall
31 determine the terms and manner of sale and distribution or
14
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 other disposition of any and all bonds it may issue,
2 consistent with the provisions of s. 218.385, and shall have
3 any and all powers necessary or convenient to such
4 disposition.
5 Section 12. Section 166.241, Florida Statutes, is
6 amended to read:
7 166.241 Fiscal years, financial reports,
8 appropriations, and budgets, and budget amendments.--
9 (1) Each municipality shall report its finances
10 annually as provided by general law.
11 (1)(2) Each municipality shall make provision for
12 establishing a fiscal year beginning October 1 of each year
13 and ending September 30 of the following year.
14 (2)(3) The governing body of each municipality shall
15 adopt a budget each fiscal year. The budget must be adopted by
16 ordinance unless otherwise specified in the respective
17 municipality's charter, except that municipalities required to
18 establish millage pursuant to chapter 200 shall adopt the
19 budget by resolution or ordinance in the manner specified in
20 s. 200.065(2). The amount available from taxation and other
21 sources, including amounts carried over from prior fiscal
22 years, must equal the total appropriations for expenditures
23 and reserves. The budget must regulate expenditures of the
24 municipality, and it is unlawful for any officer of a
25 municipal government to expend or contract for expenditures in
26 any fiscal year except in pursuance of budgeted
27 appropriations.
28 (3) The governing body of each municipality at any
29 time within a fiscal year or within up to 60 days following
30 the end of the fiscal year may amend a budget for that year as
31 follows:
15
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (a) Appropriations for expenditures within a fund may
2 be decreased or increased by motion recorded in the minutes,
3 provided that the total of the appropriations of the fund is
4 not changed.
5 (b) The governing body may establish procedures by
6 which the designated budget officer may authorize certain
7 budget amendments within a department, provided that the total
8 of the appropriations of the department is not changed.
9 (c) If a budget amendment is required for a purpose
10 not specifically authorized in paragraph (a) or paragraph (b),
11 the budget amendment must be adopted in the same manner as the
12 original budget unless otherwise specified in the charter of
13 the respective municipality.
14 Section 13. Section 189.4044, Florida Statutes, is
15 amended to read:
16 189.4044 Special procedures for inactive districts.--
17 (1) The department shall declare inactive any special
18 district in this state by documenting the following filing a
19 report with the Speaker of the House of Representatives and
20 the President of the Senate which shows that such special
21 district is no longer active. The inactive status of the
22 special district must be based upon a finding:
23 (a) That The special district meets one of the
24 following criteria:
25 1. The registered agent of the district, the chair of
26 the governing body of the district, or the governing body of
27 the appropriate local general-purpose government notifies the
28 department in writing that the district has taken no action
29 for 2 or more calendar years;
30 2. Following an inquiry from the department, the
31 registered agent of the district, the chair of the governing
16
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 body of the district, or the governing body of the appropriate
2 local general-purpose government notifies the department in
3 writing that the district has not had a governing board or a
4 sufficient number of governing board members to constitute a
5 quorum for 2 or more years or the registered agent of the
6 district, the chair of the governing body of the district, or
7 the governing body of the appropriate local general-purpose
8 government fails to respond to the department's inquiry within
9 21 days; or 18 or more months;
10 3. The department determines, pursuant to s. 189.421,
11 that the district has failed to file or make a good faith
12 effort to file any of the reports listed in s. 189.419.; or
13 4. The district has failed, for 2 consecutive fiscal
14 years, to pay fees assessed by the Special District
15 Information Program pursuant to this chapter.
16 (b) The department, special district, or local
17 general-purpose government published That a notice of the
18 proposed declaration of inactive status has been published
19 once a week for 2 weeks in a newspaper of general circulation
20 in within the county or municipality in which wherein the
21 territory of the special district is located and sent a copy
22 of such notice by certified mail to the registered agent or
23 chair of the board, if any. Such notice shall include, stating
24 the name of said special district, the law under which it was
25 organized and operating, a general description of the
26 territory included in said special district, and a statement
27 stating that any objections must be filed pursuant to chapter
28 120 within 21 days after the publication date to the proposed
29 declaration or to any claims against the assets of said
30 special district shall be filed not later than 60 days
31
17
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 following the date of last publication with the department;
2 and
3 (c) Twenty-one That 60 days have elapsed from the last
4 publication date of the notice of proposed declaration of
5 inactive status and no administrative appeals were sustained
6 objections have been filed.
7 (2) If any special district is declared inactive
8 pursuant to this section, the property or assets of the
9 special district are subject to legal process for payment of
10 any debts of the district. After the payment of all the debts
11 of said inactive special district, the remainder of its
12 property or assets shall escheat to the county or municipality
13 wherein located. If, however, it shall be necessary, in order
14 to pay any such debt, to levy any tax or taxes on the property
15 in the territory or limits of the inactive special district,
16 the same may be assessed and levied by order of the local
17 general-purpose government wherein the same is situated and
18 shall be assessed by the county property appraiser and
19 collected by the county tax collector.
20 (3) In the case of a district created by special act
21 of the Legislature, the department shall send a notice of
22 declaration of inactive status to notify the Speaker of the
23 House of Representatives and the President of the Senate. The
24 notice of declaration of inactive status shall reference of
25 each known special act creating or amending the charter of any
26 special district declared to be inactive under this
27 section. The declaration of inactive status shall be
28 sufficient notice as required by s. 10, Art. III of the State
29 Constitution to authorize the Legislature to repeal any
30 special laws so reported. In the case of a district created by
31 one or more local general-purpose governments, the department
18
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 shall send a notice of declaration of inactive status to the
2 chair of the governing body of each local general-purpose
3 government that created the district. In the case of a
4 district created by interlocal agreement, the department shall
5 send a notice of declaration of inactive status to the chair
6 of the governing body of each local general-purpose government
7 that entered into the interlocal agreement.
8 (4) The entity that created a special district
9 declared inactive under this section must dissolve the special
10 district be dissolved by repealing repeal of its enabling laws
11 or by other appropriate means.
12 Section 14. Subsection (1) of section 189.412, Florida
13 Statutes, is amended, and subsection (8) is added to that
14 section, to read:
15 189.412 Special District Information Program; duties
16 and responsibilities.--The Special District Information
17 Program of the Department of Community Affairs is created and
18 has the following special duties:
19 (1) The collection and maintenance of special district
20 noncompliance compliance status reports from the Department of
21 Management Services Auditor General, the Department of
22 Financial Services Banking and Finance, the Division of Bond
23 Finance of the State Board of Administration, and the Auditor
24 General the Department of Management Services, the Department
25 of Revenue, and the Commission on Ethics for the reporting
26 required in ss. 112.3144, 112.3145, 112.3148, 112.3149,
27 112.63, 200.068, 218.32, 218.38, and 218.39, and 280.17 and
28 chapter 121 and from state agencies administering programs
29 that distribute money to special districts. The noncompliance
30 special district compliance status reports must list those
31 consist of a list of special districts used in that state
19
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 agency and a list of which special districts that did not
2 comply with the statutory reporting requirements statutorily
3 required by that agency.
4 (8) Providing assistance to local general-purpose
5 governments and certain state agencies in collecting
6 delinquent reports or information, helping special districts
7 comply with reporting requirements, declaring special
8 districts inactive when appropriate, and, when directed by the
9 Legislative Auditing Committee, initiating enforcement
10 provisions as provided in ss. 189.4044, 189.419, and 189.421.
11 Section 15. Subsections (1) and (2) of section
12 189.418, Florida Statutes, are amended, subsection (5) is
13 renumbered as subsection (6), present subsection (6) is
14 renumbered as subsection (7) and amended, and a new subsection
15 (5) is added to that section, to read:
16 189.418 Reports; budgets; audits.--
17 (1) When a new special district is created, the
18 district must forward to the department, within 30 days after
19 the adoption of the special act, rule, ordinance, resolution,
20 or other document that provides for the creation of the
21 district, a copy of the document and a written statement that
22 includes a reference to the status of the special district as
23 dependent or independent and the basis for such
24 classification. In addition to the document or documents that
25 create the district, the district must also submit a map of
26 the district, showing any municipal boundaries that cross the
27 district's boundaries, and any county lines if the district is
28 located in more than one county. The department must notify
29 the local government or other entity and the district within
30 30 days after receipt of the document or documents that create
31
20
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 the district as to whether the district has been determined to
2 be dependent or independent.
3 (2) Any amendment, modification, or update of the
4 document by which the district was created, including changes
5 in boundaries, must be filed with the department within 30
6 days after adoption. The department may initiate proceedings
7 against special districts as provided in s. ss. 189.421 and
8 189.422 for failure to file the information required by this
9 subsection.
10 (5) The governing body of each special district at any
11 time within a fiscal year or within up to 60 days following
12 the end of the fiscal year may amend a budget for that
13 year. The budget amendment must be adopted by resolution.
14 (7)(6) All reports or information required to be filed
15 with a local governing authority under ss. 189.415, 189.416,
16 and 189.417, 218.32, and 218.39 and this section shall:
17 (a) When the local governing authority is a county, be
18 filed with the clerk of the board of county commissioners.
19 (b) When the district is a multicounty district, be
20 filed with the clerk of the county commission in each county.
21 (c) When the local governing authority is a
22 municipality, be filed at the place designated by the
23 municipal governing body.
24 Section 16. Section 189.419, Florida Statutes, is
25 amended to read:
26 189.419 Effect of failure to file certain reports or
27 information.--
28 (1) If a special district fails to file the reports or
29 information required under s. 189.415, s. 189.416, or s.
30 189.417, s. 189.418, s. 218.32, or s. 218.39 and a description
31 of all new bonds as provided in s. 218.38(1) with the local
21
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 governing authority, the person authorized to receive and read
2 the reports or information shall notify the district's
3 registered agent and the appropriate local governing authority
4 or authorities. If requested by the district At any time, the
5 governing authority shall may grant an extension of time of up
6 to 30 days for filing the required reports or information,
7 except that an extension may not exceed 30 days.
8 (2) If at any time the local governing authority or
9 authorities or the board of county commissioners determines
10 that there has been an unjustified failure to file the reports
11 or information described in subsection (1), it may notify
12 petition the department and the department may proceed
13 pursuant to initiate proceedings against the special district
14 in the manner provided in s. 189.421.
15 (3) If a special district fails to file the reports or
16 information required under s. 112.63, s. 218.32, s. 218.38, or
17 s. 218.39 with the appropriate state agency, the agency shall
18 notify the department, and the department shall proceed
19 pursuant to s. 189.421 may initiate proceedings against the
20 special district in the manner provided in s. 189.421 or
21 assess fines of not more than $25, with an aggregate total not
22 to exceed $50, when formal inquiries do not resolve the
23 noncompliance.
24 Section 17. Section 189.421, Florida Statutes, is
25 amended to read:
26 (Substantial rewording of section. See
27 s. 189.421, F.S., for present text.)
28 189.421 Failure of district to disclose financial
29 reports.--
30 (1) When notified pursuant to s. 189.419, the
31 department shall attempt to assist a special district to
22
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 comply with its financial reporting requirements by sending a
2 certified letter to the special district, and a copy of the
3 letter to the chair of the governing body of the local
4 general-purpose government, which includes the following: a
5 description of the required report, including statutory
6 submission deadlines, a contact telephone number for technical
7 assistance to help the special district comply, a 60-day
8 extension of time for filing the required report with the
9 appropriate entity, the address where the report must be
10 filed, and an explanation of the penalties for
11 noncompliance. The department may grant an additional 30-day
12 extension of time if requested to do so in writing by the
13 special district. The department shall notify the appropriate
14 entity of the new extension of time. In the case of a special
15 district that did not timely file the reports or information
16 required by s. 218.38, the department shall send a certified
17 technical assistance letter to the special district that
18 summarizes the requirements and encourages the special
19 district to take steps to prevent the noncompliance from
20 reoccurring.
21 (2) Failure of a special district to comply with the
22 financial reporting requirements after the procedures of
23 subsection (1) are exhausted shall be deemed final action of
24 the special district. The financial reporting requirements
25 are hereby declared to be essential requirements of
26 law. Remedy for noncompliance shall be by writ of certiorari
27 as set forth in subsection (3).
28 (3) Pursuant to s. 11.40(5)(b), the Legislative
29 Auditing Committee shall notify the department of those
30 districts that failed to file the required report. Within 30
31 days after receiving this notice or within 30 days after the
23
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 extension date provided in subsection (1), whichever occurs
2 later, the department shall proceed as follows:
3 notwithstanding the provisions of chapter 120, the department
4 shall file a petition for writ of certiorari with the circuit
5 court. Venue for all actions pursuant to this subsection shall
6 be in Leon County. The court shall award the prevailing party
7 attorney's fees and costs in all cases filed pursuant to this
8 section unless affirmatively waived by all parties. A writ of
9 certiorari shall be issued unless a respondent establishes
10 that the notification of the Legislative Auditing Committee
11 was issued as a result of material error. Proceedings under
12 this subsection shall otherwise be governed by the Rules of
13 Appellate Procedure.
14 Section 18. Subsection (5) of section 189.428, Florida
15 Statutes, is amended to read:
16 189.428 Special districts; oversight review process.--
17 (5) Those conducting the oversight review process
18 shall, at a minimum, consider the listed criteria for
19 evaluating the special district, but may also consider any
20 additional factors relating to the district and its
21 performance. If any of the listed criteria does do not apply
22 to the special district being reviewed, it they need not be
23 considered. The criteria to be considered by the reviewer
24 include:
25 (a) The degree to which the service or services
26 offered by the special district are essential or contribute to
27 the well-being of the community.
28 (b) The extent of continuing need for the service or
29 services currently provided by the special district.
30 (c) The extent of municipal annexation or
31 incorporation activity occurring or likely to occur within the
24
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 boundaries of the special district and its impact on the
2 delivery of services by the special district.
3 (d) Whether there is a less costly alternative method
4 of delivering the service or services that would adequately
5 provide the district residents with the services provided by
6 the district.
7 (e) Whether transfer of the responsibility for
8 delivery of the service or services to an entity other than
9 the special district being reviewed could be accomplished
10 without jeopardizing the district's existing contracts, bonds,
11 or outstanding indebtedness.
12 (f) Whether the Auditor General has notified the
13 Legislative Auditing Committee that the special district's
14 audit report, reviewed pursuant to s. 11.45(7), indicates that
15 the district has met any of the conditions specified in s.
16 218.503(1) or that a deteriorating financial condition exists
17 that may cause a condition described in s. 218.503(1) to occur
18 if actions are not taken to address such condition.
19 (g) Whether the Auditor General has determined that
20 the special district is in a state of financial emergency as
21 provided in s. 218.503(1), and has notified the Governor and
22 the Legislative Auditing Committee.
23 (g)(h) Whether the district is inactive according to
24 the official list of special districts, and whether the
25 district is meeting and discharging its responsibilities as
26 required by its charter, as well as projected increases or
27 decreases in district activity.
28 (h)(i) Whether the special district has failed to
29 comply with any of the reporting requirements in this chapter,
30 including preparation of the public facilities report.
31
25
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (i)(j) Whether the special district has designated a
2 registered office and agent as required by s. 189.416, and has
3 complied with all open public records and meeting
4 requirements.
5 Section 19. Paragraph (a) of subsection (1) of section
6 189.439, Florida Statutes, is amended to read:
7 189.439 Bonds.--
8 (1) AUTHORIZATION AND FORM OF BONDS.--
9 (a) The authority may issue and sell bonds for any
10 purpose for which the authority has the power to expend money,
11 including, without limitation, the power to obtain working
12 capital loans to finance the costs of any project and to
13 refund any bonds or other indebtedness at the time outstanding
14 at or before maturity. Bonds may be sold in the manner
15 provided in s. 218.385 and by public or negotiated sale after
16 advertisement, if any, as the board considers
17 advisable. Bonds may be authorized by resolution of the
18 board.
19 Section 20. Section 215.981, Florida Statutes, is
20 amended to read:
21 215.981 Audits of state agency direct-support
22 organizations and citizen support organizations.--
23 (1) Each direct-support organization and each citizen
24 support organization, created or authorized pursuant to law,
25 and created, approved, or administered by a state agency,
26 other than a university, district board of trustees of a
27 community college, or district school board, shall provide for
28 an annual financial audit of its accounts and records to be
29 conducted by an independent certified public accountant in
30 accordance with rules adopted by the Auditor General pursuant
31 to s. 11.45(8) and the state agency that created, approved, or
26
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 administers the direct-support organization or citizen support
2 organization. The audit report shall be submitted within 9
3 months after the end of the fiscal year to the Auditor General
4 and to the state agency responsible for creation,
5 administration, or approval of the direct-support organization
6 or citizen support organization, whenever the organization's
7 expenditures and expenses exceed $100,000. Such state agency,
8 the Auditor General, and the Office of Program Policy Analysis
9 and Government Accountability shall have the authority to
10 require and receive from the organization or from the
11 independent auditor any records relative to the operation of
12 the organization.
13 (2) Notwithstanding the provisions of subsection (1),
14 and for the 2002-2003 fiscal year only, citizen support
15 organizations for the Department of Environmental Protection
16 that are not for profit and that have annual expenditures of
17 less than $100,000 are not required to have an independent
18 audit. This subsection expires July 1, 2003.
19 Section 21. Subsection (3) of section 218.075, Florida
20 Statutes, is amended to read:
21 218.075 Reduction or waiver of permit processing
22 fees.--Notwithstanding any other provision of law, the
23 Department of Environmental Protection and the water
24 management districts shall reduce or waive permit processing
25 fees for counties with a population of 50,000 or less on April
26 1, 1994, until such counties exceed a population of 75,000 and
27 municipalities with a population of 25,000 or less, or any
28 county or municipality not included within a metropolitan
29 statistical area. Fee reductions or waivers shall be approved
30 on the basis of fiscal hardship or environmental need for a
31 particular project or activity. The governing body must
27
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 certify that the cost of the permit processing fee is a fiscal
2 hardship due to one of the following factors:
3 (3) Any condition specified in s. 218.503(1), that
4 results in the county or municipality being in determines a
5 state of financial emergency;
6
7 The permit applicant must be the governing body of a county or
8 municipality or a third party under contract with a county or
9 municipality and the project for which the fee reduction or
10 waiver is sought must serve a public purpose. If a permit
11 processing fee is reduced, the total fee shall not exceed
12 $100.
13 Section 22. Subsection (3) is added to section 218.32,
14 Florida Statutes, to read:
15 218.32 Annual financial reports; local governmental
16 entities.--
17 (3) The department shall notify the President of the
18 Senate and the Speaker of the House of Representatives of any
19 municipality that has not reported any financial activity for
20 the last 4 fiscal years. Such notice shall be sufficient to
21 initiate dissolution procedures described in s.
22 165.051(1)(a). Any special law authorizing the incorporation
23 or creation of said municipality shall be included within the
24 notification.
25 Section 23. Subsection (2) of section 218.321, Florida
26 Statutes, is amended to read:
27 218.321 Annual financial statements; local
28 governmental entities.--
29 (2) Each local governmental entity that is not
30 required to provide for an audit report in accordance with s.
31
28
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 218.39 11.45(3)(a)5. must complete its financial statements no
2 later than 12 months after the end of the fiscal year.
3 Section 24. Subsection (3) of section 218.36, Florida
4 Statutes, is amended to read:
5 218.36 County officers; record and report of fees and
6 disposition of same.--
7 (3) The board of county commissioners may shall, on
8 the 32nd day following the close of the fiscal year, notify
9 the Governor of the failure of any county officer to comply
10 with the provisions of this section. Such notification shall
11 specify the name of the officer and the office held by him or
12 her at the time of such failure and shall subject said officer
13 to suspension from office at the Governor's discretion.
14 Section 25. Section 218.369, Florida Statutes, is
15 amended to read:
16 218.369 Definitions applicable to ss.
17 218.37-218.386.--As used in this section and in ss. 218.37,
18 218.38, 218.385, and 218.386, the term "unit of local
19 government," except where exception is made, means a county,
20 municipality, special district, district school board, local
21 agency, authority, or consolidated city-county government or
22 any other local governmental body or public body corporate and
23 politic authorized or created by general or special law and
24 granted the power to issue general obligation or revenue
25 bonds; and the words "general obligation or revenue bonds"
26 shall be interpreted to include within their scope general
27 obligation bonds, revenue bonds, special assessment bonds,
28 limited revenue bonds, special obligation bonds, debentures,
29 and other similar instruments, but not bond anticipation
30 notes.
31
29
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 Section 26. Part V of chapter 218, Florida Statutes,
2 entitled "Financial Emergencies" is renamed "Local
3 Governmental Entity and District School Board Financial
4 Emergencies."
5 Section 27. Section 218.50, Florida Statutes, is
6 amended to read:
7 218.50 Popular name Short title.--Sections
8 218.50-218.504 shall be known by the popular name as the
9 "Local Governmental Entity and District School Board
10 Government Financial Emergencies Act."
11 Section 28. Section 218.501, Florida Statutes, is
12 amended to read:
13 218.501 Purposes.--The purposes of ss. 218.50-218.504
14 are:
15 (1) To promote preserve and protect the fiscal
16 responsibility solvency of local governmental entities and
17 district school boards.
18 (2) To assist local governmental entities and district
19 school boards in providing essential services without
20 interruption and in meeting their financial obligations.
21 (3) To assist local governmental entities and district
22 school boards through the improvement of local financial
23 management procedures.
24 Section 29. Section 218.502, Florida Statutes, is
25 amended to read:
26 218.502 Definition.--As used in ss. 218.50-218.504,
27 the term "local governmental entity" means a county,
28 municipality, or special district, or district school board.
29 Section 30. Section 218.503, Florida Statutes, is
30 amended to read:
31 218.503 Determination of financial emergency.--
30
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (1) A Local governmental entities and district school
2 boards shall be subject to review and oversight by the
3 Governor or the Commissioner of Education entity is in a state
4 of financial emergency when any one of the following
5 conditions occurs:
6 (a) Failure within the same fiscal year in which due
7 to pay short-term loans from banks or failure to make bond
8 debt service or other long-term debt payments when due, as a
9 result of a lack of funds.
10 (b) Failure to pay uncontested claims from creditors
11 within 90 days after the claim is presented, as a result of a
12 lack of funds.
13 (c)(b) Failure to transfer at the appropriate time,
14 due to lack of funds:
15 1. Taxes withheld on the income of employees; or
16 2. Employer and employee contributions for:
17 a. Federal social security; or
18 b. Any pension, retirement, or benefit plan of an
19 employee.
20 (d)(c) Failure for one pay period to pay, due to lack
21 of funds:
22 1. Wages and salaries owed to employees; or
23 2. Retirement benefits owed to former employees.
24 (e)(d) An unreserved or total fund balance or retained
25 earnings deficit, or unrestricted or total net assets deficit,
26 as reported on the balance sheet or statement of net assets on
27 the general purpose or fund financial statements, for which
28 sufficient resources of the local governmental entity, as
29 reported on the balance sheet or statement of net assets on
30 the general purpose or fund financial statements, are not
31 available to cover the deficit for 2 successive years.
31
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 Resources available to cover reported deficits include net
2 assets that are not otherwise restricted by federal, state, or
3 local laws, bond covenants, contractual agreements, or other
4 legal constraints. Fixed or capital assets the disposal of
5 which would impair the ability of a local governmental entity
6 to carry out its functions are not considered resources
7 available to cover reported deficits.
8 (e) Noncompliance of the local government retirement
9 system with actuarial conditions provided by law.
10 (2) A local governmental entity shall notify the
11 Governor and the Legislative Auditing Committee, and a
12 district school board shall notify the Commissioner of
13 Education and the Legislative Auditing Committee, when one or
14 more of the conditions specified in subsection (1) have
15 occurred or will occur if action is not taken to assist the
16 local governmental entity or district school board. In
17 addition, any state agency must, within 30 days after a
18 determination that one or more of the conditions specified in
19 subsection (1) have occurred or will occur if action is not
20 taken to assist the local governmental entity or district
21 school board the identification of the financial emergency,
22 notify the Governor or the Commissioner of Education, as
23 appropriate, and the Legislative Auditing Committee when one
24 or more of the conditions specified in subsection (1) have
25 occurred or will occur if action is not taken to assist a
26 local governmental entity.
27 (3) Upon notification that one or more of the
28 conditions in subsection (1) exist, the Governor or his or her
29 designee shall contact the local governmental entity or the
30 Commissioner of Education or his or her designee shall contact
31 the district school board to determine what actions have been
32
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 taken by the local governmental entity or the district school
2 board to resolve the condition financial emergency. The
3 Governor or the Commissioner of Education, as appropriate,
4 shall determine whether the local governmental entity or the
5 district school board needs state assistance to resolve the
6 condition. If state assistance is needed, the local
7 governmental entity or district school board is considered to
8 be in a state of financial emergency. The Governor or the
9 Commissioner of Education, as appropriate, has the authority
10 to implement measures as set forth in ss. 218.50-218.504 to
11 assist the local governmental entity or district school board
12 in resolving resolve the financial emergency. Such measures
13 may include, but are not limited to:
14 (a) Requiring approval of the local governmental
15 entity's budget by the Governor or approval of the district
16 school board's budget by the Commissioner of Education.
17 (b) Authorizing a state loan to a the local
18 governmental entity and providing for repayment of same.
19 (c) Prohibiting a local governmental entity or
20 district school board from issuing bonds, notes, certificates
21 of indebtedness, or any other form of debt until such time as
22 it is no longer subject to this section.
23 (d) Making such inspections and reviews of records,
24 information, reports, and assets of the local governmental
25 entity or district school board. The appropriate local
26 officials shall cooperate in such, in which inspections and
27 reviews the appropriate local officials shall cooperate.
28 (e) Consulting with the officials and auditors of the
29 local governmental entity or the district school board and the
30 appropriate state officials agency regarding any steps
31 necessary to bring the books of account, accounting systems,
33
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 financial procedures, and reports into compliance with state
2 requirements.
3 (f) Providing technical assistance to the local
4 governmental entity or the district school board.
5 (g)1. Establishing a financial emergency emergencies
6 board to oversee the activities of the local governmental
7 entity or the district school board. If a financial emergency
8 The board, if is established for a local governmental entity,
9 shall be appointed by the Governor shall appoint board members
10 and select a chair. If a financial emergency board is
11 established for a district school board, the State Board of
12 Education shall appoint board members and select a chair. The
13 Governor shall select a chair and such other officers as are
14 necessary. The financial emergency board shall adopt such
15 rules as are necessary for conducting board business. The
16 board may:
17 a. Make such reviews of records, reports, and assets
18 of the local governmental entity or the district school board
19 as are needed.
20 b. Consult with the officials and auditors of the
21 local governmental entity or the district school board and the
22 appropriate state officials regarding any steps necessary to
23 bring the books of account, accounting systems, financial
24 procedures, and reports of the local governmental entity or
25 the district school board into compliance with state
26 requirements.
27 c. Review the operations, management, efficiency,
28 productivity, and financing of functions and operations of the
29 local governmental entity or district school board.
30 2. The recommendations and reports made by the
31 financial emergency board must be submitted to the Governor
34
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 for local governmental entities or to the Commissioner of
2 Education and the State Board of Education for district school
3 boards for appropriate action.
4 (h) Requiring and approving a plan, to be prepared by
5 officials of the appropriate state agency in conjunction with
6 the local governmental entity or the district school board in
7 consultation with the appropriate state officials, prescribing
8 actions that will cause the local governmental entity or
9 district school board to no longer be subject to this
10 section. The plan must include, but need not be limited to:
11 1. Provision for payment in full of obligations
12 outlined in subsection (1), designated as priority items, that
13 are currently all payments due or will to come due on debt
14 obligations, pension payments, and all payments and charges
15 imposed or mandated by federal or state law and for all
16 judgments and past due accounts, as priority items of
17 expenditures.
18 2. Establishment of a basis of priority budgeting or
19 zero-based budgeting in order, so as to eliminate low-priority
20 items that are not affordable.
21 3. The prohibition of a level of operations which can
22 be sustained only with nonrecurring revenues.
23 (4) A During the financial emergency period, the local
24 governmental entity or district school board may not seek
25 application of laws under the bankruptcy provisions of the
26 United States Constitution except with the prior approval of
27 the Governor for local governmental entities or the
28 Commissioner of Education for district school boards.
29 (5)(a) The governing authority of any municipality
30 having a resident population of 300,000 or more on or after
31 April 1, 1999, which has been declared in a state of financial
35
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 emergency pursuant to this section may impose a discretionary
2 per-vehicle surcharge of up to 20 percent on the gross
3 revenues of the sale, lease, or rental of space at parking
4 facilities within the municipality which are open for use to
5 the general public.
6 (b) A municipal governing authority that imposes the
7 surcharge authorized by this subsection may use the proceeds
8 of such surcharge for the following purposes only:
9 1. No less than 60 percent and no more than 80 percent
10 of the surcharge proceeds shall be used by the governing
11 authority to reduce its ad valorem tax millage rate or to
12 reduce or eliminate non-ad valorem assessments.
13 2. A portion of the balance of the surcharge proceeds
14 shall be used by the governing authority to increase its
15 budget reserves; however, the governing authority shall not
16 reduce the amount it allocates for budget reserves from other
17 sources below the amount allocated for reserves in the fiscal
18 year prior to the year in which the surcharge is initially
19 imposed. When a 15-percent budget reserve is achieved, based
20 on the average gross revenue for the most recent 3 prior
21 fiscal years, the remaining proceeds from this subparagraph
22 shall be used for the payment of annual debt service related
23 to outstanding obligations backed or secured by a covenant to
24 budget and appropriate from non-ad valorem revenues.
25 (c) This subsection expires June 30, 2006.
26 Section 31. Section 218.504, Florida Statutes, is
27 amended to read:
28 218.504 Cessation of state action.--The Governor or
29 the Commissioner of Education, as appropriate, has the
30 authority to terminate all state actions pursuant to ss.
31 218.50-218.504. Cessation of state action must not occur
36
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 until the Governor or the Commissioner of Education, as
2 appropriate, has determined that:
3 (1) The local governmental entity or district school
4 board:
5 (a) Has established and is operating an effective
6 financial accounting and reporting system.
7 (b) Has resolved corrected or eliminated the fiscal
8 emergency conditions outlined in s. 218.503(1).
9 (2) None of the No new fiscal emergency conditions
10 outlined in s. 218.503(1) exists exist.
11 Section 32. Chapter 131, Florida Statutes, consisting
12 of sections 131.01, 131.02, 131.03, 131.04, 131.05, and
13 131.06, Florida Statutes, is repealed.
14 Section 33. Section 132.10, Florida Statutes, is
15 repealed.
16 Section 34. Section 165.052, Florida Statutes, is
17 repealed.
18 Section 35. Section 189.409, Florida Statutes, is
19 repealed.
20 Section 36. Section 189.422, Florida Statutes, is
21 repealed.
22 Section 37. Section 200.0684, Florida Statutes, is
23 repealed.
24 Section 38. Paragraph (h) of subsection (1) of section
25 218.37, Florida Statutes, is repealed.
26 Section 39. Section 215.195, Florida Statutes, is
27 amended to read:
28 215.195 Agency deposits relating to the Statewide Cost
29 Allocation Plan.--
30 (1) APPLICATION FOR ALLOCABLE STATEWIDE
31 OVERHEAD.--Each state agency, and the judicial branch, making
37
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 application for federal grant or contract funds shall, in
2 accordance with the Statewide Cost Allocation Plan (SWCAP),
3 include in its application a prorated share of the cost of
4 services provided by state central service agencies which are
5 reimbursable to the state pursuant to the provisions of Office
6 of Management and Budget Circular A-87. Preparation of the
7 Statewide Cost Allocation Plan and coordination thereof with
8 all applicable parties is the responsibility of the Department
9 of Financial Services. The Department of Financial Services
10 shall ensure that the SWCAP presents the most favorable
11 allocation of central services cost allowable to the state by
12 the Federal Government.
13 (2) DEPOSIT OF OVERHEAD IN THE GENERAL REVENUE
14 FUND.--If an application for federal grant or contract funds
15 is approved, the state agency or judicial branch receiving the
16 federal grant or contract shall identify that portion
17 representing reimbursement of allocable statewide overhead and
18 deposit that amount into the General Revenue Fund unallocated
19 as directed by the Department of Financial Services Executive
20 Office of the Governor. The Department of Financial Services
21 shall be responsible for monitoring agency compliance with
22 this section.
23 Section 40. Section 215.97, Florida Statutes, is
24 amended to read:
25 215.97 Florida Single Audit Act.--
26 (1) The purposes of the section are to:
27 (a) Establish uniform state audit requirements for
28 state financial assistance provided by state agencies to
29 nonstate entities to carry out state projects.
30
31
38
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (b) Promote sound financial management, including
2 effective internal controls, with respect to state financial
3 assistance administered by nonstate entities.
4 (c) Promote audit economy and efficiency by relying to
5 the extent possible on already required audits of federal
6 financial assistance provided to nonstate entities.
7 (d) Provide for identification of state financial
8 assistance transactions in the appropriations act, state
9 accounting records, and recipient organization records.
10 (e) Promote improved coordination and cooperation
11 within and between affected state agencies providing state
12 financial assistance and nonstate entities receiving state
13 assistance.
14 (f) Ensure, to the maximum extent possible, that state
15 agencies monitor, use, and followup on audits of state
16 financial assistance provided to nonstate entities.
17 (2) Definitions; as used in this section, the term:
18 (a) "Audit threshold" means the threshold amount used
19 to determine to use in determining when a state single audit
20 of a nonstate entity shall be conducted in accordance with
21 this section. Each nonstate entity that expends a total amount
22 of state financial assistance equal to or in excess of
23 $300,000 in any fiscal year of such nonstate entity shall be
24 required to have a state single audit for such fiscal year in
25 accordance with the requirements of this section. Every 2
26 years the Auditor General, after consulting with the Executive
27 Office of the Governor, the Department of Financial Services
28 Comptroller , and all state awarding agencies that provide
29 state financial assistance to nonstate entities , shall review
30 the threshold amount for requiring audits under this section
31
39
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 and may adjust such threshold dollar amount consistent with
2 the purposes purpose of this section.
3 (b) "Auditing standards" means the auditing standards
4 as stated in the rules of the Auditor General as applicable to
5 for-profit organizations, nonprofit organizations, or local
6 governmental entities.
7 (c) "Catalog of State Financial Assistance" means a
8 comprehensive listing of state projects. The Catalog of State
9 Financial Assistance shall be issued by the Department of
10 Financial Services Executive Office of the Governor after
11 conferring with the Comptroller and all state awarding
12 agencies that provide state financial assistance to nonstate
13 entities. The Catalog of State Financial Assistance shall
14 include for each listed state project: the responsible state
15 awarding agency; standard state project number identifier;
16 official title; legal authorization; and description of the
17 state project, including objectives, restrictions, application
18 and awarding procedures, and other relevant information
19 determined necessary.
20 (d) "Coordinating agency" means the state awarding
21 agency that provides the predominant amount of state financial
22 assistance expended by a recipient, as determined by the
23 recipient's Schedule of Expenditures of State Financial
24 Assistance. To provide continuity, the determination of the
25 predominant amount of state financial assistance shall be
26 based upon state financial assistance expended in the
27 recipient's fiscal years ending in 2003, 2006, and 2009, and
28 every third year thereafter.
29 (e)(d) "Financial reporting package" means the
30 nonstate entities' financial statements, Schedule of
31 Expenditures of State Financial Assistance, auditor's reports,
40
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 management letter, auditee's written responses or corrective
2 action plan, correspondence on followup of prior years'
3 corrective actions taken, and such other information
4 determined by the Auditor General to be necessary and
5 consistent with the purposes of this section.
6 (f)(e) "Federal financial assistance" means financial
7 assistance from federal sources passed through the state and
8 provided to nonstate organizations entities to carry out a
9 federal program. "Federal financial assistance" includes all
10 types of federal assistance as defined in applicable United
11 States Office of Management and Budget circulars.
12 (g)(f) "For-profit organization" means any
13 organization or sole proprietor that but is not a local
14 governmental entity or a nonprofit organization.
15 (h)(g) "Independent auditor" means an external state
16 or local governmental government auditor or a certified public
17 accountant who meets the independence standards.
18 (i)(h) "Internal control over state projects" means a
19 process, effected by a nonstate an entity's management and
20 other personnel, designed to provide reasonable assurance
21 regarding the achievement of objectives in the following
22 categories:
23 1. Effectiveness and efficiency of operations.
24 2. Reliability of financial operations.
25 3. Compliance with applicable laws and regulations.
26 (j)(i) "Local governmental entity" means a county
27 agency, municipality, or special district or any other entity
28 (other than a district school board, charter school, or
29 community college, or public university), however styled,
30 which independently exercises any type of governmental
31 function within the state.
41
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (k)(j) "Major state project" means any state project
2 meeting the criteria as stated in the rules of the Department
3 of Financial Services Executive Office of the Governor. Such
4 criteria shall be established after consultation with all the
5 Comptroller and appropriate state awarding agencies that
6 provide state financial assistance and shall consider the
7 amount of state project expenditures and or expenses or
8 inherent risks. Each major state project shall be audited in
9 accordance with the requirements of this section.
10 (l)(k) "Nonprofit organization" means any corporation,
11 trust, association, cooperative, or other organization that:
12 1. Is operated primarily for scientific, educational
13 service, charitable, or similar purpose in the public
14 interest;
15 2. Is not organized primarily for profit;
16 3. Uses net proceeds to maintain, improve, or expand
17 the operations of the organization; and
18 4. Has no part of its income or profit distributable
19 to its members, directors, or officers.
20 (m)(l) "Nonstate entity" means a local governmental
21 entity, nonprofit organization, or for-profit organization
22 that receives state financial assistance resources.
23 (n) "Nonstate organization" means a local governmental
24 entity, nonprofit organization, or for-profit organization
25 that receives state resources.
26 (o)(m) "Recipient" means a nonstate entity that
27 receives state financial assistance directly from a state
28 awarding agency.
29 (p)(n) "Schedule of Expenditures of State Financial
30 Assistance" means a document prepared in accordance with the
31 rules of the Department of Financial Services Comptroller and
42
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 included in each financial reporting package required by this
2 section.
3 (q)(o) "State awarding agency" means a the state
4 agency, as defined in s. 216.011, that provides provided state
5 financial assistance to a the nonstate entity.
6 (r)(p) "State financial assistance" means financial
7 assistance from state resources, not including federal
8 financial assistance and state matching on federal programs,
9 provided to a nonstate entity entities to carry out a state
10 project. "State financial assistance" shall include the
11 includes all types of state resources assistance as stated in
12 the rules of the Department of Financial Services Executive
13 Office of the Governor established in consultation with all
14 the Comptroller and appropriate state awarding agencies that
15 provide state financial assistance. It includes State
16 financial assistance may be provided directly by state
17 awarding agencies or indirectly by nonstate entities
18 recipients of state awards or subrecipients. State financial
19 assistance It does not include procurement contracts used to
20 buy goods or services from vendors and. Audits of such
21 procurement contracts with vendors are outside of the scope of
22 this section. Also, audits of contracts to operate state-owned
23 state-government-owned and contractor-operated facilities are
24 excluded from the audit requirements of this section.
25 (s)(q) "State matching" means state resources provided
26 to a nonstate entity entities to be used to meet federal
27 financial participation matching requirements of federal
28 programs.
29 (t) "State program" means a set of special purpose
30 activities undertaken to realize identifiable goals and
31 objectives in order to achieve a state agency's mission and
43
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 legislative intent requiring accountability for state
2 resources.
3 (u)(r) "State project" means a state program that
4 provides all state financial assistance to a nonstate
5 organization and that must be entity assigned a single state
6 project number identifier in the Catalog of State Financial
7 Assistance.
8 (v)(s) "State Projects Compliance Supplement" means a
9 document issued by the Department of Financial Services
10 Executive Office of the Governor, in consultation with the
11 Comptroller and all state awarding agencies that provide state
12 financial assistance. The State Projects Compliance Supplement
13 shall identify state projects, the significant compliance
14 requirements, eligibility requirements, matching requirements,
15 suggested audit procedures, and other relevant information
16 determined necessary.
17 (w)(t) "State project-specific audit" means an audit
18 of one state project performed in accordance with the
19 requirements of subsection (10) (9).
20 (x)(u) "State single audit" means an audit of a
21 nonstate entity's financial statements and state financial
22 assistance. Such audits shall be conducted in accordance with
23 the auditing standards as stated in the rules of the Auditor
24 General.
25 (y)(v) "Subrecipient" means a nonstate entity that
26 receives state financial assistance through another nonstate
27 entity.
28 (z)(w) "Vendor" means a dealer, distributor, merchant,
29 or other seller providing goods or services that are required
30 for the conduct of a state project. These goods or services
31
44
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 may be for an organization's own use or for the use of
2 beneficiaries of the state project.
3 (3) The Executive Office of the Governor shall be
4 responsible for notifying the Department of Financial Services
5 of any actions during the budgetary process that impact the
6 Catalog of State Financial Assistance.:
7 (a) Upon conferring with the Comptroller and all state
8 awarding agencies, adopt rules necessary to provide
9 appropriate guidance to state awarding agencies, recipients
10 and subrecipients, and independent auditors of state financial
11 assistance relating to the requirements of this section,
12 including:
13 1. The types or classes of financial assistance
14 considered to be state financial assistance which would be
15 subject to the requirements of this section. This would
16 include guidance to assist in identifying when the state
17 agency or recipient has contracted with a vendor rather than
18 with a recipient or subrecipient.
19 2. The criteria for identifying a major state project.
20 3. The criteria for selecting state projects for
21 audits based on inherent risk.
22 (b) Be responsible for coordinating the initial
23 preparation and subsequent revisions of the Catalog of State
24 Financial Assistance after consultation with the Comptroller
25 and all state awarding agencies.
26 (c) Be responsible for coordinating the initial
27 preparation and subsequent revisions of the State Projects
28 Compliance Supplement, after consultation with the Comptroller
29 and all state awarding agencies.
30 (4) The Department of Financial Services Comptroller
31 shall:
45
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (a) Upon conferring with the Executive Office of the
2 Governor and all state awarding agencies, adopt rules
3 necessary to provide appropriate guidance to state awarding
4 agencies, nonstate entities, and independent auditors of state
5 financial assistance relating to the requirements of this
6 section, including:
7 1. The types or classes of state resources considered
8 to be state financial assistance that would be subject to the
9 requirements of this section. This would include guidance to
10 assist in identifying when the state awarding agency or a
11 nonstate entity has contracted with a vendor rather than with
12 a recipient or subrecipient.
13 2. The criteria for identifying a major state project.
14 3. The criteria for selecting state projects for
15 audits based on inherent risk.
16 (b) Be responsible for coordinating revisions to the
17 Catalog of State Financial Assistance after consultation with
18 the Executive Office of the Governor and all state awarding
19 agencies.
20 (c) Be responsible for coordinating with the Executive
21 Office of the Governor actions affecting the budgetary process
22 under paragraph (b).
23 (d) Be responsible for coordinating revisions to the
24 State Projects Compliance Supplement, after consultation with
25 the Executive Office of the Governor and all state awarding
26 agencies.
27 (e)(a) Make enhancements to the state's accounting
28 system to provide for the:
29 1. Recording of state financial assistance and federal
30 financial assistance appropriations and expenditures within
31 the state awarding agencies' operating funds.
46
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 2. Recording of state project number identifiers, as
2 provided in the Catalog of State Financial Assistance, for
3 state financial assistance.
4 3. Establishment and recording of an identification
5 code for each financial transaction, including state awarding
6 agencies' disbursements of state financial assistance and
7 federal financial assistance, as to the corresponding type or
8 organization that is party to the transaction(e.g., other
9 governmental agencies, nonprofit organizations, and for-profit
10 organizations), and disbursements of federal financial
11 assistance, as to whether the party to the transaction is or
12 is not a nonstate entity recipient or subrecipient.
13 (f)(b) Upon conferring with the Executive Office of
14 the Governor and all state awarding agencies, adopt rules
15 necessary to provide appropriate guidance to state awarding
16 agencies, nonstate entities recipients and subrecipients, and
17 independent auditors of state financial assistance relating to
18 the format for the Schedule of Expenditures of State Financial
19 Assistance.
20 (g)(c) Perform any inspections, reviews,
21 investigations, or audits of state financial assistance
22 considered necessary in carrying out the Department of
23 Financial Services's Comptroller's legal responsibilities for
24 state financial assistance or to comply with the requirements
25 of this section.
26 (5) Each state awarding agency shall:
27 (a) Provide to each a recipient information needed by
28 the recipient to comply with the requirements of this section,
29 including:
30 1. The audit and accountability requirements for state
31 projects as stated in this section and applicable rules of the
47
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 Executive Office of the Governor, rules of the Department of
2 Financial Services Comptroller, and rules of the Auditor
3 General.
4 2. Information from the Catalog of State Financial
5 Assistance, including the standard state project number
6 identifier; official title; legal authorization; and
7 description of the state project including objectives,
8 restrictions, and other relevant information determined
9 necessary.
10 3. Information from the State Projects Compliance
11 Supplement, including the significant compliance requirements,
12 eligibility requirements, matching requirements, suggested
13 audit procedures, and other relevant information determined
14 necessary.
15 (b) Require the recipient, as a condition of receiving
16 state financial assistance, to allow the state awarding
17 agency, the Department of Financial Services Comptroller, and
18 the Auditor General access to the recipient's records and the
19 recipient's independent auditor's working papers as necessary
20 for complying with the requirements of this section.
21 (c) Notify the recipient that this section does not
22 limit the authority of the state awarding agency to conduct or
23 arrange for the conduct of additional audits or evaluations of
24 state financial assistance or limit the authority of any state
25 awarding agency inspector general, the Auditor General, or any
26 other state official.
27 (d) Be provided one copy of each financial reporting
28 package prepared in accordance with the requirement of this
29 section.
30 (e) Review the recipient's recipient financial
31 reporting package, including the management letters and
48
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 corrective action plans, to the extent necessary to determine
2 whether timely and appropriate corrective action has been
3 taken with respect to audit findings and recommendations
4 pertaining to state financial assistance that are specific to
5 provided by the state awarding agency.
6 (f) Designate within the state awarding agency a
7 division, bureau, or other organizational unit that will be
8 responsible for reviewing financial reporting packages
9 pursuant to paragraph (e).
10
11 If the state awarding agency is not the coordinating agency as
12 defined in paragraph (2)(d), the state awarding agency's
13 designated division, bureau, or other organizational unit
14 shall communicate to the coordinating agency the state
15 awarding agency's approval of the recipient's corrective
16 action plan with respect to findings and recommendations that
17 are not specific to the state awarding agency.
18 (6) Each coordinating agency shall:
19 (a) Review the recipient's financial reporting
20 package, including the management letter and corrective action
21 plan, to identify audit findings and recommendations that
22 affect state financial assistance that are not specific to a
23 particular state awarding agency.
24 (b) For any such findings and recommendations
25 determine:
26 1. Whether timely and appropriate corrective action
27 has been taken.
28 2. Promptly inform the state awarding agency's
29 contact, as designated pursuant to paragraph (5)(f), of
30 actions taken by the recipient to comply with the approved
31 corrective action plan.
49
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (c) Maintain records of followup actions taken for the
2 use of any succeeding coordinating agency.
3 (7)(6) As a condition of receiving state financial
4 assistance, each nonstate entity recipient that provides state
5 financial assistance to a subrecipient shall:
6 (a) Provide to each a subrecipient information needed
7 by the subrecipient to comply with the requirements of this
8 section, including:
9 1. Identification of the state awarding agency.
10 2. The audit and accountability requirements for state
11 projects as stated in this section and applicable rules of the
12 Executive Office of the Governor, rules of the Department of
13 Financial Services Comptroller, and rules of the Auditor
14 General.
15 3. Information from the Catalog of State Financial
16 Assistance, including the standard state project number
17 identifier; official title; legal authorization; and
18 description of the state project, including objectives,
19 restrictions, and other relevant information.
20 4. Information from the State Projects Compliance
21 Supplement including the significant compliance requirements,
22 eligibility requirements, matching requirements, and suggested
23 audit procedures, and other relevant information determined
24 necessary.
25 (b) Review the financial reporting package of the
26 subrecipient audit reports, including the management letter
27 and corrective action plan letters, to the extent necessary to
28 determine whether timely and appropriate corrective action has
29 been taken with respect to audit findings and recommendations
30 pertaining to state financial assistance provided by a the
31 state awarding agency or nonstate entity.
50
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (c) Perform such other procedures as specified in
2 terms and conditions of the written agreement with the state
3 awarding agency or nonstate entity including any required
4 monitoring of the subrecipient's use of state financial
5 assistance through onsite visits, limited scope audits, or
6 other specified procedures.
7 (d) Require subrecipients, as a condition of receiving
8 state financial assistance, to permit the independent auditor
9 of the nonstate entity recipient, the state awarding agency,
10 the Department of Financial Services Comptroller, and the
11 Auditor General access to the subrecipient's records and the
12 subrecipient's independent auditor's working papers as
13 necessary to comply with the requirements of this section.
14 (8)(7) Each recipient or subrecipient of state
15 financial assistance shall comply with the following:
16 (a) Each nonstate entity that receives state financial
17 assistance and meets the audit threshold requirements, in any
18 fiscal year of the nonstate entity, as stated in the rules of
19 the Auditor General, shall have a state single audit conducted
20 for such fiscal year in accordance with the requirements of
21 this act and with additional requirements established in rules
22 of the Executive Office of the Governor, rules of the
23 Department of Financial Services Comptroller, and rules of the
24 Auditor General. If only one state project is involved in a
25 nonstate entity's fiscal year, the nonstate entity may elect
26 to have only a state project-specific audit of the state
27 project for that fiscal year.
28 (b) Each nonstate entity that receives state financial
29 assistance and does not meet the audit threshold requirements,
30 in any fiscal year of the nonstate entity, as stated in this
31 law or the rules of the Auditor General is exempt for such
51
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 fiscal year from the state single audit requirements of this
2 section. However, such nonstate entity must meet terms and
3 conditions specified in the written agreement with the state
4 awarding agency or nonstate entity.
5 (c) Regardless of the amount of the state financial
6 assistance, the provisions of this section do not exempt a
7 nonstate entity from compliance with provisions of law
8 relating to maintaining records concerning state financial
9 assistance to such nonstate entity or allowing access and
10 examination of those records by the state awarding agency,
11 nonstate entity, the Department of Financial Services
12 Comptroller, or the Auditor General.
13 (d) Audits conducted pursuant to this section shall be
14 performed annually.
15 (e) Audits conducted pursuant to this section shall be
16 conducted by independent auditors in accordance with auditing
17 standards as stated in rules of the Auditor General.
18 (f) Upon completion of the audit as required by this
19 section, a copy of the recipient's financial reporting package
20 shall be filed with the state awarding agency and the Auditor
21 General. Upon completion of the audit as required by this
22 section, a copy of the subrecipient's financial reporting
23 package shall be filed with the nonstate entity recipient that
24 provided the state financial assistance and the Auditor
25 General. The financial reporting package shall be filed in
26 accordance with the rules of the Auditor General.
27 (g) All financial reporting packages prepared pursuant
28 to the requirements of this section shall be available for
29 public inspection.
30 (h) If an audit conducted pursuant to this section
31 discloses any significant audit findings relating to state
52
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 financial assistance, including material noncompliance with
2 individual state project compliance requirements or reportable
3 conditions in internal controls of the nonstate entity, the
4 nonstate entity shall submit as part of the financial
5 reporting audit package to the state awarding agency or
6 nonstate entity a plan for corrective action to eliminate such
7 audit findings or a statement describing the reasons that
8 corrective action is not necessary.
9 (i) An audit conducted in accordance with this section
10 is in addition to any audit of federal awards required by the
11 federal Single Audit Act and other federal laws and
12 regulations. To the extent that such federally required audits
13 provide the state awarding agency or nonstate entity with
14 information it requires to carry out its responsibilities
15 under state law or other guidance, the a state awarding agency
16 or nonstate entity shall rely upon and use that information.
17 (j) Unless prohibited by law, the costs cost of audits
18 pursuant to this section are is allowable charges to state
19 projects. However, any charges to state projects should be
20 limited to those incremental costs incurred as a result of the
21 audit requirements of this section in relation to other audit
22 requirements. The nonstate entity should allocate such
23 incremental costs to all state projects for which it expended
24 state financial assistance.
25 (k) Audit costs may not be charged to state projects
26 when audits required by this section have not been made or
27 have been made but not in accordance with this section. If a
28 nonstate entity fails to have an audit conducted consistent
29 with this section, a state awarding agency or nonstate entity
30 agencies may take appropriate corrective action to enforce
31 compliance.
53
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 (l) This section does not prohibit the state awarding
2 agency or nonstate entity from including terms and conditions
3 in the written agreement which require additional assurances
4 that state financial assistance meets the applicable
5 requirements of laws, regulations, and other compliance rules.
6 (m) A state awarding agency or nonstate entity that
7 provides state financial assistance to nonstate entities and
8 conducts or arranges for audits of state financial assistance
9 that are in addition to the audits conducted under this act,
10 including audits of nonstate entities that do not meet the
11 audit threshold requirements, shall, consistent with other
12 applicable law, arrange for funding the full cost of such
13 additional audits.
14 (9)(8) The independent auditor when conducting a state
15 single audit of a nonstate entity recipients or subrecipients
16 shall:
17 (a) Determine whether the nonstate entity's financial
18 statements are presented fairly in all material respects in
19 conformity with generally accepted accounting principles.
20 (b) Determine whether state financial assistance shown
21 on the Schedule of Expenditures of State Financial Assistance
22 is presented fairly in all material respects in relation to
23 the nonstate entity's financial statements taken as a whole.
24 (c) With respect to internal controls pertaining to
25 each major state project:
26 1. Obtain an understanding of internal controls;
27 2. Assess control risk;
28 3. Perform tests of controls unless the controls are
29 deemed to be ineffective; and
30 4. Determine whether the nonstate entity has internal
31 controls in place to provide reasonable assurance of
54
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 compliance with the provisions of laws and rules pertaining to
2 state financial assistance that have a material effect on each
3 major state project.
4 (d) Determine whether each major state project
5 complied with the provisions of laws, rules, and guidelines as
6 identified in the State Projects Compliance Supplement, or
7 otherwise identified by the state awarding agency, which have
8 a material effect on each major state project. When major
9 state projects are less than 50 percent of the nonstate
10 entity's total expenditures for all state financial
11 assistance, the auditor shall select and test additional state
12 projects as major state projects as necessary to achieve audit
13 coverage of at least 50 percent of the expenditures for all
14 state financial assistance provided to the nonstate entity.
15 Additional state projects needed to meet the 50-percent
16 requirement may be selected on an inherent risk basis as
17 stated in the rules of the Department of Financial Services
18 Executive Office of the Governor.
19 (e) Report on the results of any audit conducted
20 pursuant to this section in accordance with the rules of the
21 Executive Office of the Governor, rules of the Department of
22 Financial Services Comptroller, and rules of the Auditor
23 General. Financial reporting packages Audit reports shall
24 include summaries of the auditor's results regarding the
25 nonstate entity's financial statements; Schedule of
26 Expenditures of State Financial Assistance; internal controls;
27 and compliance with laws, rules, and guidelines.
28 (f) Issue a management letter as prescribed in the
29 rules of the Auditor General.
30 (g) Upon notification by the nonstate entity, make
31 available the working papers relating to the audit conducted
55
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 pursuant to the requirements of this section to the state
2 awarding agency, the Department of Financial Services
3 Comptroller, or the Auditor General for review or copying.
4 (10)(9) The independent auditor, when conducting a
5 state project-specific audit of a nonstate entity recipients
6 or subrecipients, shall:
7 (a) Determine whether the nonstate entity's Schedule
8 of Expenditures of State Financial Assistance is presented
9 fairly in all material respects in conformity with stated
10 accounting policies.
11 (b) Obtain an understanding of internal controls
12 control and perform tests of internal controls control over
13 the state project consistent with the requirements of a major
14 state project.
15 (c) Determine whether or not the auditee has complied
16 with applicable provisions of laws, rules, and guidelines as
17 identified in the State Projects Compliance Supplement, or
18 otherwise identified by the state awarding agency, which could
19 have a direct and material effect on the state project.
20 (d) Report on the results of the a state
21 project-specific audit consistent with the requirements of the
22 state single audit and issue a management letter as prescribed
23 in the rules of the Auditor General.
24 (e) Upon notification by the nonstate entity, make
25 available the working papers relating to the audit conducted
26 pursuant to the requirements of this section to the state
27 awarding agency, the Department of Financial Services
28 Comptroller, or the Auditor General for review or copying.
29 (11)(10) The Auditor General shall:
30 (a) Have the authority to audit state financial
31 assistance provided to any nonstate entity when determined
56
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2003 SB 2566
25-1538A-03 See HB 1603
1 necessary by the Auditor General or when directed by the
2 Legislative Auditing Committee.
3 (b) Adopt rules that state the auditing standards that
4 independent auditors are to follow for audits of nonstate
5 entities required by this section.
6 (c) Adopt rules that describe the contents and the
7 filing deadlines for the financial reporting package.
8 (d) Provide technical advice upon request of the
9 Department of Financial Services Comptroller, Executive Office
10 of the Governor, and state awarding agencies relating to
11 financial reporting and audit responsibilities contained in
12 this section.
13 (e) Be provided one copy of each financial reporting
14 package prepared in accordance with the requirements of this
15 section.
16 (f) Perform ongoing reviews of a sample of financial
17 reporting packages filed pursuant to the requirements of this
18 section to determine compliance with the reporting
19 requirements of this section and applicable rules of the
20 Executive Office of the Governor, rules of the Department of
21 Financial Services Comptroller, and rules of the Auditor
22 General.
23 Section 41. Effective July 1, 2003, one full-time
24 equivalent position is transferred from the Executive Office
25 of the Governor to the Department of Financial Services.
26 Section 42. This act shall take effect upon becoming a
27 law.
28
29
30
31
57
CODING: Words stricken are deletions; words underlined are additions.