SERVICE CHARGE INSTRUCTIONS

INTRODUCTION

The service charges are administrative fees authorized by Florida Statutes 215.20 through 215.25 and charged on all assessable trust funds and assessable revenue unless specifically exempted. These fees are paid every quarter or more often if the agency chooses. In 1941 services charges were assessed on only a few trust funds and at the rate of only 3 percent. Changes were made to the Florida Statutes in 1988 and all trust funds were added except those that were specifically exempt. These exemptions are listed in Florida Statute 215.22. There are a few other references that exempt a trust fund or a specific revenue located in other statutes. Some agencies are completely exempt, but if a fund within these agencies was paying the service charge before then, the agency will continue to pay on that fund only.

The legislature designated the Department of Financial Services to establish the rules and procedures with the approval of the Executive Office of the Governor. Although that section of the Administrative Code was repealed in 1996, the same rules continue to be used.

SERVICE CHARGE REPORT OF REVENUE

This report is placed in the Report Distribution System (RDS) on the 15^th day of the month following the end of the quarter. In the fourth quarter, the report will not be available until after the year-end closing around the third week of July. Each agency should verify the accuracy of the report before doing the calculations. Occasionally there are problems with the update of the information in Information Warehouse (usually the interest amounts are not input properly) and the report may be a few days late. Please be patient and the report will be in RDS as soon as a correct version is ready. If you are printing the report from Information Warehouse on the 15^th, all revenue and interest should be verified.

REVENUE

It is important for many reasons for the revenue to be recorded in the proper category when it is received. Assessable revenue (for example fingerprinting fees) received from individuals recorded in an exempt category does not relieve the agency of its responsibility for paying the service charge on this revenue. All back service charges (including previous years) will be due and payable on any revenue that has not been specifically exempted and has not paid the service charge. If the error is not discovered for a few years, the amount owed could be larger than the account could afford at one time. If there is any doubt as to the assessable status of any type of revenue it is better to ask for a ruling. Please address these requests to Molly Merry, Bureau Chief, Bureau of Accounting, Department of Financial Services, Room 414 Fletcher Building. You can email her at molly.merry@fldfs.com.

The service charge report of revenue has exempted those categories that are usually exempt from the service charge. One column will list a year to date, all inclusive, amounts that will include the exempt categories, but the other two columns will not include the amount for the exempt categories. Sometimes a category that is usually exempt will have assessable revenue, and this revenue should be added to the total assessable revenue total at the bottom of the report and identified. For example, some funds receive transfers from the Department of Highway Safety and Motor Vehicles (DHSMV). These transfers are recorded in the 001500 or 001600 category that is usually exempt and only the year to date amount is given. If you wish to calculate the service charge on a quarterly basis, then the total amount at the end of the previous quarter needs to be subtracted from the current total to get the amount for the quarter that needs to be added.

The following categories are usually exempt.

CATEGORY LONG TITLE

000106 COUNTY FEE FOR ADMINISTRATIVE COSTS

000108** MARKETING ORDER ASSESSMENT

000109 REIMBURSEMENT FOR CLIENT CUSTODIAL

CARE

000119 FEES COLLECTED AS AGENT

000121 FEES TO COUNTY HEALTH DEPARTMENTS

000124 Article V Fees - DFS

000125 ARTICLE V FEES - GENERAL REVENUE

000326 CONSTITUTIONAL GASOLINE TAX

000333 TAXES COLLECTED AS AGENT

000335 Slot Machine Tax Receipts

000503 INTEREST DEPOSITS IN GENERAL REVENUE

000504 INTEREST - FEDERAL

000600 EMPLOYEE AND EMPLOYER CONTRIBUTIONS

000601 SUPPLEMENTAL BENEFITS PLAN

CONTRIBUTIONS

000602 PRETAX BENEFIT PROGRAM

000700 US GRANTS

000701 FEDERAL DISASTER RELIEF

000710 US GRANTS DIRECT TO CHD

000720 FEDERAL CHILD CARE FOOD PROGRAM

000799 U.S. GRANTS - INDIRECT

000801 LOCAL GOVERNMENT CONTRIBUTIONS

000810 CITY OR COUNTY GRANTS -

NO SERVICE CHARGE

001000 STATE GRANTS

001010 STATE GRANTS - NO SERVICE CHARGE

001110 OTHER GRANTS - NO SERVICE CHARGE

001204 RESTITUTION

001225 ARTICLE V FINES, FORFEITURES, &

JUDGMENTS-GENERAL REVENUE

001300 SECTION 215.20 (1) AND (2) GR SERVICE

CHARGE

001301 MOTOR FUEL SERVICE CHARGE

001303 SECTION 215.20(3) SERVICE CHARGE

001304 LOCAL OPTION GAS TAX SERVICE CHARGE

001305 DOCUMENTARY STAMP TAX SERVICE

CHARGE

001306 MOTOR VEHICLE RENTAL SURCHARGE FEE

SVC CHARGE

001500* TRANSFERS

001510 TRANSFER OF FEDERAL FUNDS

001511 DEPT OF REVENUE - MAINTENANCE

001512 TR FROM SALES TA/LOCAL ½ CENT SALES

TAX

001514 MOTOR VEHICLE LICENSE FEES - TRANSFERS

001516 MOTOR VEHICLE LICENSE FEES - ADVANCE

001517 STATEWIDE COST ALLOCATION TRANSFER

001599 TRANSFER OF FEDERAL FUNDS - INDIRECT

001600* DISTRIBUTION - TRANSFERS REQUIRED BY

LAW

001601 SEVERANCE TAX OIL & GAS

001602 SEVERANCE TAX SOLID MATERIAL

001603 INSURANCE PREMIUM TAX

001604 DOCUMENT STAMP TAX

001607 COMMUNICATIONS SERVICES TAX

TRANSFER

001608 INTANGIBLE TAX

001609 SEVERANCE TAX

001610 PARI-MUTUAL WAGERING TAX

001611 ALCOHOLIC BEVERAGE LICENSES

001612 CIGARETTE TAX

001615 TR FROM DOCUMENTARY STAMP TAX/ST

INFRA FD

001625 ARTICLE V TRANSFERS REQUIRED -

GENERAL REVENUE

001632 TRANSFER FROM SLOT MACHINE REVENUES

001800 REFUNDS

001801 REIMBURSEMENTS

001825 ARTICLE V REFUNDS - GENERAL REVENUE

001902 SALE OF LOTTERY TICKETS

001903* SALES OF GOODS/SERVICES TO STATE

AGENCIES

002000 SALE OF INVESTMENTS

002103 RENT FROM STATE AGENCIES

002200 SALE OF BONDS/REVENUE CERTIFICATES

002300 REPAYMENT OF LOANS

002400 UNEMPLOYMENT COMPENSATION

002500 COLLECTIONS OF FEDERAL AND/OR STATE

TAXES

002700 FIRE CONTROL AND FORESTRY

ASSESSMENT

002800 SECURITY/ESCROW DEPOSITS

002801 INSURANCE RECOVERIES-FIRE LOSSES

003000 RECEIPTS FROM SBA-EXCLUDING

003100 TRANSFERS BETWEEN GAAFR FUNDS

WITHIN FID

003105 CASH TRANSFER BETWEEN SAME FIDS

003600 UNCLAIMED PROPERTY RECEIPTS

003700 PRIOR YEAR WARRANT CANCELLATIONS

003800 12 MONTH OLD WARRANTS (12 MO VOID)

004000 OTHER NON-OPERATING RECEIPTS

004700 REPAYMENT OF REVOLVING FUNDS

004801 SALES OF DATA PROCESSING SVCS TO

STATE AGENCIES

004900 FLAIR/CMS REPLACEMENT LOAN PROCEEDS

005000 SUSPENSE

005001 CIT - OTHER DEPARTMENTAL DEPOSITS

005030 FORFEITED BOND PROCEEDS

005800 PREMIUMS PAID BY STATE AGENCIES

005810 STATE PROPERTY INSURANCE REVENUE

005900 CLIENT DEPOSITS

006000 TRANSFERS FROM GENERAL REVENUE

007000 UNIVERSITY DEVOLUTION PAYROLL CASH

009884 RESERVE FOR FEDERAL FUNDING OPS

*The transfer category is usually exempt, but transfers received

from 76-74-2-488001, 73-74-2-636001, 41-74-2-601001, and

73-74-2-733001 are assessable.

**Market orders are assessable at 3%.

***Sale of data processing outside state government is

assessable.

REFUNDS

The report has subtracted all refunds. If some of these refunds were given on revenue that was never assessed a service charge, then the amount of these refunds should be added back to the total assessable revenue. For example, if you receive federal funds that were recorded in category 000700, any refund of these funds would be added back to the total revenue.

EXEMPTIONS

All exemptions must relate to Florida Statute 215.22 or have an exemption letter from EOG as allowed in 215.24, F.S. A few exemptions are given in other statutes and this statute should be referenced in the explanation of the exemptions. The Department of Financial Services is responsible for determining if a type of revenue qualifies for an exemption referred to in the statutes. All exceptions to the total assessable revenue stated on the report must be identified in writing. This is usually done on the report sheet for the trust fund. If the agency is using a spreadsheet program to calculate the service charge then a space for a written explanation should be provided. Different types of exceptions must be listed separately and identified. A total of all exceptions can be placed on the adjustment line.

CALCULATION OF THE SERVICE CHARGE

After the total revenue has been adjusted for all exceptions, then you can calculate the service charge amount that is due. It is almost always best to use the year to date revenue amount, as any errors in calculations or payments made in previous quarters will be corrected in the current calculation. If you adjusted revenue in the previous quarter for an error in deposits and this error was corrected in FLAIR then you will have to reverse the adjustment in the next quarter if you are calculating on a quarterly basis. It is extremely important that all exceptions to the total reported revenue be explained in writing. If the Department of Financial Services cannot identify the exception and audit for validity then the exception will not be allowed.

PAYMENTS

A journal transfer should be prepared for the total amount of the service charge for each fund within thirty days of the end of the first three quarters. At the end of the fourth quarter, a total of 45 days is given due to the lateness of the report. The expense category is always 310322, and the general revenue receipt category is 0013XX (except 001303) for the seven and three percent service charges. The object code will be 8807XX. For the .3 percent service charges the general revenue receipt category must be 001303 and the object code is 8803XX. Please allow sufficient time for the journal transfer to be audited and posted before the deadline. If the amount of payment is insufficient to pay the total amount of service charges due, the Department of Financial Services will produce a manual journal transfer to pay any outstanding amounts. It is still the agency’s responsibility to pay the correct amount owed and within the deadline. If your account has insufficient unexpended release to pay the service charge, the Bureau of Auditing will override and post the journal transfer. If the release is not given by the Office of Planning and Budgeting by year-end, the Department of Financial Services will request the amount needed to zero out the release. The agency should request additional budget as soon as it determines the amount needed to pay the service charges for the remainder of the year. The Department of Financial Services will also override for insufficient cash except for the month of June. It is the responsibility of the agency to insure there is sufficient cash in the account to pay the service charges.

A written explanation of any changes to the total revenue stated on the service charge report should be attached to the voucher. An additional copy does not have to be sent to Jim Mullins in the Bureau of Accounting. The original will be sufficient. The voucher will be audited and copied before it is posted.

If there are any questions concerning the payments please contact Jim Mullins at 413-5603 (SUNCOM 293-5603) or James.Mullins@fldfs.com.

Questions concerning the validity of an exemption should be addressed to Kiki Evans at 413-5725 (SUNCOM 293-5725) or kiki.evans@fldfs.com.

GLOSSARY:

Agency Means any of the various Departments, Divisions, Commissions, Boards, or other units of State Government that exercise control over the funds and revenue sources subject to the service charge provided for in Section 215.20, Florida Statutes.

Income of a Gross receipts collected and deposited in

Revenue Nature the State Treasury by an agency less refunds of these receipts. Includes the interest earned on investments when the interest is deposited in the trust fund. Interest earned at SBA is exempt. Refunds of prior year expenditures, return of principal on investment, monies received and held in an agent or fiduciary capacity and revenue specifically excluded by law are not included. Most funds will pay on grants and contract funds received from another state agency. City and County grants and grants and donations received from individuals or groups can only be exempted by the Executive Office of the Governor, Planning and Budget Office.

Agent or Fiduciary Means that the agency receives no

Capacity benefit from the monies and that disbursing the monies is not part of the agencies normal duties as assigned by Florida Statutes. If an administrative fee was collected from other than another state agency or the federal government on these monies, the administrative fee would be assessable revenue.

Interest Income Means the total net gain realized from investment transactions, with the exception of the investments with the State Board of Administration. Interest given to General Revenue that was earned on the trust funds is exempt. Federal funds that have been invested and the interest is to be returned to the Federal government is also exempt. Interest or dividends on bank accounts is usually assessable unless the interest is to be returned to a third party. The total net gain does not include any administrative fees paid for the investment.

Moneys and Means distributions, which are authorized

Income Nature by statute to political subdivisions.

Shared with Distributions to political subdivisions

Political which are appropriated in the General

Subdivisions Appropriations Act, but do not have a statutorily required distribution, are not “shared” with a political subdivision. For example, if the state collects a tax in full but a portion of that tax was due to the counties, then the portion that is returned to the counties is shared revenue.

Statutorily Means distributions set out in a statute

required that requires monies, or a fixed portion

Distribution thereof, to be returned to a unit of local government or political subdivision.

End of Quarter Calendar dates of September 30,

December 31, March 31, and June 30.