FLORIDA CHIEF FINANCIAL OFFICER
Volume 5, Number 39,
September 26, 2008
Washington Mutual (WaMu), one of Florida’s 10 largest banks, was taken over
by the Federal Deposit Insurance Corporation (FDIC) Thursday night. All of
WaMu’s branches, deposits and assets were immediately sold to JPMorgan
Chase, providing customers full access to their accounts and the ability to
continue banking as usual.
It is important for Floridians banking with WaMu to understand that due to
the quick sale to JPMorgan Chase, bank branches will be open and business
will continue as normal. WaMu customers with questions can visit their local
branch, call the customer service division at 1-800-788-7000, or call the
FDIC Call Center at 1-877-275-3342 for more information.
WaMu customers should hear from JPMorgan Chase soon, as happens under normal
circumstances when one bank buys another. All deposit accounts, including
savings, checking, money market, and retirement accounts and certificates of
deposit, have become part of JPMorgan Chase Bank, although the signs may not
change for awhile.
Direct deposits such as payroll or Social Security checks will continue as
normal, as will use of your debit card. WaMu customers can still use the
checks you have now, and checks already written will be honored provided
that you have sufficient funds in the account. Loan payment amounts and due
dates will not change, automatic payments will continue as usual and online
banking remains available.
The crisis on Wall Street and in the financial markets is undoubtedly
unsettling for Floridians who bank with WaMu. It also raises questions for
all of us about what happens when a bank fails and what our individual
responsibilities are as customers.
Here are some important things you need to know to weather a bank failure:
Be sure your accounts do not exceed FDIC insurance limits. The FDIC
insures deposits titled in your name up to $100,000 in any one bank.
Deposit accounts include checking and savings accounts, money market
accounts and Certificates of Deposit (or CDs). For more information on
FDIC insurance coverage of your deposits, visit the FDIC website
www.fdic.gov or call them at 866-806-5919.
IRA accounts are also insured by the FDIC for up to $250,000. If you
have more than one IRA, talk to your banker about ways to maximize the
available FDIC insurance.
If your bank is taken over, you do NOT have to fill out any
paperwork for the FDIC for your account to receive their protection.
Floridians banking with WaMu do not have to do anything to continue
their FDIC protection.
If you have a mortgage or other loan with a bank that is taken over
by the FDIC, your loan terms will remain the same. Make your loan
payments to the same address – and be sure they are on time! Loan
payments should continue to go to the same address unless notified
properly by the FDIC to send payments to a new address. Your loan may be
transferred to a different lender, but the terms would remain the same.
Beware of scams and the opportunity for identity theft. Talk with
your bank if anything seems out of the ordinary or suspicious. The FDIC
and your bank WILL NOT call or email you to verify account numbers,
personal information including social security numbers.
If you have additional questions, please feel free to contact the
Department of Financial Services Consumer Help line at 1-877-MY-FL-CFO. Or
visit our Web site at
CFO SINK RELEASES RESULTS OF EXTERNAL AUDIT OF
ACCOUNTING AND AUDITINGContinuing her systematic performance evaluation of
the divisions within Florida’s Department of Financial
Services (DFS), Florida Chief Financial Officer Alex Sink
released the results of a performance audit of electronic
funds transfer (EFT) processes within the Division of
Accounting and Auditing. CFO Sink called for the external
audit last month after her department worked with the
Federal Bureau of Investigation to successfully apprehend a
suspect accused of wire fraud.
CFO immediately orders corrective action to increase
safeguards; CFO-ordered audit is first of its kind for
Accounting and Auditing Department in ten years
No performance audits of Accounting and Auditing’s EFT
process had been performed in ten years. The EFT process was
last audited by the department’s Inspector General in 1998
when DFS was then the Department of Banking and Finance.
“As a career banker with a lifetime in risk management, I
understand that audits and assessments over internal
controls are essential to keeping business processes running
efficiently and securely,” said CFO Sink, who oversees DFS.
“This external audit provides a blueprint for demanding and
instituting increased safeguards over the electronic
transfer of funds, and we are acting immediately to
implement the audit’s recommendations.”
At CFO Sink’s direction, the performance audit examined the
internal controls designed to prevent and detect errors or
irregularities in the EFT process. The auditors also
reviewed the information technology controls significant to
the protection and integrity of the systems and data
required for EFTs. Both the internal and information
technology controls were evaluated with respect to essential
risk management practices that provide necessary oversight.
CFO Sink has promptly appointed new leadership to guide the
Divisions of Accounting and Auditing and Information Systems
through these crucial enhancements. Effective immediately,
Craig Vollertson, the Bureau Chief of Mainframe
Infrastructure, will serve as the Interim Director of the
Division of Information Systems. Also effective immediately,
Kimberly McMurray is being promoted from Bureau Chief of
Funds Management in the Florida Treasury to the Division
Director of Accounting and Auditing.
HAILS $541 MILLION HOUSING ASSISTANCE FROM FEDERAL GOVERNMENT
Florida Chief Financial Officer Alex Sink
today hailed the award of $541 million in housing aid to Florida’s local
governments by the United States Department of Housing and Urban
Development. Florida has one of the highest foreclosure rates in the nation
and the highest rate of mortgage fraud.
The funds, appropriated by Congress as
part of the Housing and Economic Recovery Act of 2008, will be used to help
local governments renovate abandoned and foreclosed properties to make them
available for resale. In turn, local governments will make these properties
available to moderate and low-income Floridians.
“I am delighted to see that Floridians
will reap hundreds of millions of dollars worth of benefits from the new
law,” said CFO Sink, who oversees the Department of Financial Services.
“These resources will help thousands of Floridians who don’t currently own a
home have the chance to become homeowners. It will also help local
governments meet the pressing need for housing for many of our hard-working
families, including law enforcement officers, teachers and nurses.”
After Congress’ passage of the Housing and Economic
Recovery Act of 2008, CFO Sink created a Financial Action Team to review the
federal law and to conduct an outreach campaign. The Financial Action Team
is targeting new homebuyers, veterans, homeowners who are having trouble
meeting their mortgage payments, and local governments.
CFO SINK’S 'FINANCIAL
ACTION TEAM' MET ON
WEDNESDAY IN TALLAHASSEE
Sink called upon the broad coalition
last month to review federal foreclosure assistance legislation
Chief Financial Officer Alex Sink's
“Financial Action Team” met Wednesday, September 24, 2008,
in Tallahassee. The Financial Action Team is reviewing Florida’s
potential share of the billions in federal dollars available from the
recently-passed federal Housing and Economic Recovery Act of 2008.
During the workgroup meeting, members discussed how to use their
individual and collective means to inform Floridians about the benefits
of the new federal law, and also discussed the impact on the law of the
new White House proposal to rescue financial institutions that are still
troubled by the housing crisis.
The FACT Team focused on a number of key provisions of the law,
including the HOPE for Homeowners Act, which will provide federal
guarantees for up to $300 billion in troubled mortgages, the $7,500
homebuyer tax credit, which is available to Floridians who have not
owned a home in the past three years but have purchased a home this
year, extensive benefits available to veterans, and the nearly $4
billion in aid to local governments which is to be used to refurbish
foreclosed properties to be made available for resale – particularly for
moderate and low-income homeowners.
The FACT Team will conduct outreach efforts using the Department of
Financial Services Web site, member newsletters and magazines, E-mail
lists, and The Chief Financial Officer’s toll-free help line, which is
877-My-FL-CFO (877-693-5236). The CFO expects to have these resources
available to Floridians over the next few weeks.
The FACT Team will stay together to work with CFO Sink on other financial
issues facing Floridians.
CFO SINK PROMOTES WORKPLACE SAFETY WITH
FREE WORKERS’ COMPENSATION CLASSES
Free workers’ compensation classes to help business
owners, employers and contractors create a safe working
Florida Chief Financial Officer Alex Sink, who oversees the
Department of Financial Services and the Division of
Workers’ Compensation, announced today that the department
will begin offering free classes to help employers and
contractors better protect their most valuable assets –
“Floridians work hard and we want them to go home whole and
healthy everyday, so we will enforce workers’ compensation
laws to protect them,” said CFO Sink. “Our goal is to make
it easy for employers to comply with the law so that
employees can work in safe environments.”
Classes will begin October 1, 2008, and will be led by 15
compliance investigators and supervisors who are licensed to
provide instruction in Florida’s coverage and compliance
requirements. The classes will provide information on what
is required under Florida’s workers’ compensation law, when
exemptions apply, what resources are available to help
employers and contractors comply with the law, and training
on workplace safety. Contractors who successfully complete
the classes will be eligible for continuing education
credits. For an initial class schedule and to register,
www.myfloridacfo.com/wc and look under “Notices.”
Under Florida law, non-construction businesses with four
or more employees must have workers’ compensation coverage, and
construction-related businesses with one or more employees must have the
coverage. Workers’ Compensation investigators can order non-compliant
businesses to close their doors until they have coverage, and in the last
fiscal year that ended June 30, 2008, the division conducted 27,674 worksite
investigations, issued 2,518 stop-work orders and assessed $48.5 million in
Premiums have dropped by more than half since the
Legislature passed legislation in 2003 that, among other reforms, put in
place tougher enforcement penalties. In addition, compliance and enforcement
activities have added more than 43,000 employees to the workers’
compensation system during the last four years.
MY SAFE FLORIDA HOME ADVISORY COUNCIL MET
ON THURSDAY IN TALLAHASSEE
Florida Chief Financial Officer Alex Sink convened the
legislatively-created My Safe Florida Home (MSFH) Advisory
Council on Thursday, September 25, 2008, in Tallahassee at
The Council received an update on the program, which has
provided more than 400,000 free wind inspections and awarded
nearly 39,000 Floridians grants to harden their homes
against hurricane damage. Members also reviewed Florida’s
home structure rating system and new research initiatives
At its meeting, the Council unanimously agreed
to pursue additional funding during the next legislative session to continue
building on the momentum of the program. In addition, the Council
recommended a subcommittee be established to provide recommendations for
including mitigation improvements to roofs, such as roof covering,
roof-to-wall connections, roof deck attachment and secondary water barrier,
as grant-eligible in a future version of the program.
Authorized by Section 215.5586, Florida Statutes, the
council was created to provide advice and assistance to the
Department of Financial Services regarding the
administration of the MSFH program.
For more information on the MSFH program or the council
www.MySafeFloridaHome.com or call the program’s
toll-free at 1-866-513-6734. On the Web site, Floridians
can link to information on the council, its agenda and
SAVING ENERGY, SAVING MONEY
Energy tips for Florida families - these actions
represent ways to behave kindly toward Mother Earth,
AND save money as well as
CFO Alex Sink's science advisor Meg Lowman, Ph.D.,
on the faculty at New College of Florida. Dr. Lowman has
written numerous award-winning books and is an
expert on the rain forests of the world.
Energy-saving laundry tips
Major appliances account for
about 20% of your household's energy consumption with
refrigerators, clothes washers, and clothes dryers at the
top of the consumption list. Try these energy-saving ideas
to save money each month.
Wash clothes in cold water. Heating the water, not
swishing and spinning the clothes, uses most of the energy spent
to wash clothes. Save substantially by washing and rinsing
at cooler or cold temperatures. Wash most clothes in warm or
cold water, using cold-water detergents whenever possible;
rinse in cold. You'll save energy and money. Use hot water
only if absolutely necessary. Switching the washer
temperature setting from hot to warm could reduce a load's
energy in half. Most natural, organic fabrics don’t need warm water attention because they're inherently
antibacterial and antimicrobial—meaning that they
naturally discourage mold, mildew, and allergens.
Don't use too much detergent. Follow the instructions on
the box. Over-sudsing makes your machine work harder and use
Hang it up to dry. When it's sunny, a
clothesline is the most eco-friendly way to dry your
clothes—with no static! You save the energy a dryer
would use, and your clothes will smell outdoor fresh without the perfumes
and chemicals in fabric softeners and dryer sheets. Hang light items inside on a hanger or indoor
clothesline to save energy, too. You'll get longer life out of
clothes hung up to dry - dryer lint is clothes leaving
pieces behind. And keep that dryer lint-trap clean.
Reduce drying time
If you can't air-dry your laundry, save on drying time by
drying similar fabrics together, drying multiple loads in
quick succession (to take advantage of residual heat), and
make sure to clean the dryer filter after each use.
Don't overdry your laundry. Clothes will need less
ironing and hold up better if you remove them from the dryer
while they're still a little damp. When shopping for a new
clothes dryer, find one with a moisture sensor rather just a
thermostat - it will know when your clothes are
Are you the chief
financial officer of your family? Are you always
looking out for the best deals, wise investments and
smart moves for your family's financial security?
As your family's fiscal
watch dog, keep an eye on
this column for money-smart ideas from the Chief
Financial Officer of Florida,
IDEA: Protect against
Know what's in your wallet. Carry only the credit cards you
need so that access is limited to your accounts if cards are
lost or stolen. Photocopy your cards and keep a record of
customer service phone numbers.
Shred. Open all mail and read it carefully— shred any
items with personal information before discarding.
Be suspicious. Never give out personal information
until you have verified that you can trust the source --
over the phone, in-store or online.
Monitor. Check your bank, credit card and other
financial account information to reduce the risk of
unauthorized charges or credit applications. If you find a
suspicious charge, contact your financial institution.
Take action. If you notice a new account has been
opened without your permission, contact one of the three
major credit bureaus and have a fraud alert placed on your
record. The other two bureaus will be notified, and
creditors will be required to contact you directly before
opening new accounts or making changes to existing accounts.
Then file a police report and submit a complaint to the
Federal Trade Commission.
Use the Web safely. Be sure to use a secured network,
and frequently update firewall protections on your computer.
Also limit the amount of personal information you post on
networking Web sites.
STATE FIRE MARSHAL'S OFFICE PARTICIPATES IN THIRD ANNUAL
NORTHWEST FLORIDA VOLUNTEER FIREFIGHTER WEEKEND
The Florida State Fire College, a division of the State Fire
Marshal's office, sponsored and participated in the third
annual Northwest Florida Volunteer Firefighter Weekend on
September 19-14, 2008. The event was held for the first time
at the Northwest Florida State College (formerly
Okaloosa-Walton College). Nearly 200 students from Pensacola
to the Keys took part in the educational experience.
Les Hallman, left, division director of the State Fire
Marshal’s Office, spoke about safety and the importance of
training. “This is what it is all about, good training
in a safe atmosphere. The State Fire Marshal and the Florida
State Fire College are proud and pleased to be part of this
Classes began on Wednesday before the weekend with a
first-time 40-hour class teaching
Service Course Delivery. The participants will be able to
teach other firefighters.
On Friday evening, displays and demonstrations of the
newest equipment used in the field of extrication permitted
participants to try out the tools and equipment.
On Saturday, participants learned firefighting techniques
through practical and classroom training programs. The
Search and Rescue program is shown using the confined space
prop from the Florida State Fire College. From the Midway
Fire Department in Gadsden County, Colene Frederick, below
in the red t-shirt, is a new volunteer and student at
Florida State University. As part of an Emergency Medical
Technician program she got to do ride time with local fire
departments. She said, “I fell in love with the fire service
and now want to pursue it as a career. This weekend is
helping me to become acclimated with fire service and it is
reinforcing my career decision.”
The new burn building at the Northwest Florida State College
saw smoke, fire and heat for the first time. The Farmmedic
class, also taught by FSFC personnel was a big hit, teaching
how to safely work with farm equipment and how to remove
trapped victims in agricultural accidents. There were 27
classes and 187 students for almost 3,000 hours of training.
As the classes wound down on Sunday afternoon Valparaiso
Volunteer Fire Department Chief Charlie Frank, who serves as
president of the weekend committee, was already thinking
ahead to next September. “I think next year, we should be
able to draw over 300. In fact,” he said to the staff,
“let’s make that our goal.”
STILL TIME TO FILE FOR YOUR
ECONOMIC STIMULUS PAYMENT
those residents who still intend to receive an economic
stimulus payment, the Oct. 15 deadline to file a 2007 income
tax return is fast approaching.
And according to the Internal Revenue Service, there were
potential filers in Florida in
mid-September who had not submitted a tax return to get the
Nationally, the IRS is alerting the estimated 4.3 million
retirees and disabled veterans who may be eligible to
receive a stimulus payment, but who normally don't file a
tax return. It's also the deadline for the approximately 10
million people who earlier this year received extensions to
file their 2007 income tax return.
TAX CREDIT TO AID FIRST-TIME
Must Be Repaid Over 15 Years
WASHINGTON — First-time homebuyers should begin planning now to take
advantage of a new tax credit included in the recently enacted Housing and
Economic Recovery Act of 2008, IR-2008-106.
Available for a limited time only, the credit:
- Applies to home purchases after April 8, 2008, and
before July 1, 2009.
- Reduces a taxpayer’s tax bill or increases his or her
refund, dollar for dollar.
- Is fully refundable, meaning that the credit will be
paid out to eligible taxpayers, even if they owe no tax or the credit is
more than the tax that they owe.
However, the credit operates much like an interest-free
loan, because it must be repaid over a 15-year period. So, for example, an
eligible taxpayer who buys a home today and properly claims the maximum
available credit of $7,500 on his or her 2008 federal income tax return must
begin repaying the credit by including one-fifteenth of this amount, or
$500, as an additional tax on his or her 2010 return.
Eligible taxpayers will claim the credit on new IRS Form 5405. This form,
along with further instructions on claiming the first-time homebuyer credit,
will be included in 2008 tax forms and instructions and be available later
this year on IRS.gov, the IRS Web site.
If you bought a home recently, or are considering buying one, the following
questions and answers may help you determine whether you qualify for the
Q. Which home purchases qualify for the first-time homebuyer credit?
A. Only the purchase of a main home located in the United States qualifies
and only for a limited time. Vacation homes and rental property are not
eligible. You must buy the home after April 8, 2008, and before July 1,
2009. For a home that you construct, the purchase date is the first date you
occupy the home.
Taxpayers who owned a main home at any time during the three years prior to
the date of purchase are not eligible for the credit. This means that
first-time homebuyers and those who have not owned a home in the three years
prior to a purchase can qualify for the credit.
If you make an eligible purchase in 2008, you claim the first-time homebuyer
credit on your 2008 tax return. For an eligible purchase in 2009, you can
choose to claim the credit on either your 2008 (or amended 2008 return) or
Q. How much is the credit?
A. The credit is 10 percent of the purchase price of the home, with a
maximum available credit of $7,500 for either a single taxpayer or a married
couple filing jointly. The limit is $3,750 for a married person filing a
separate return. In most cases, the full credit will be available for homes
costing $75,000 or more. Whatever the size of the credit a taxpayer
receives, the credit must be repaid over a 15-year period.
Q. Are there income limits?
A. Yes. The credit is reduced or eliminated for higher-income taxpayers.
The credit is phased out based on your modified adjusted gross income
(MAGI). MAGI is your adjusted gross income plus various amounts excluded
from income—for example, certain foreign income. For a married couple filing
a joint return, the phase-out range is $150,000 to $170,000. For other
taxpayers, the phase-out range is $75,000 to $95,000.
This means the full credit is available for married couples filing a joint
return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is
$75,000 or less.
Q. Who cannot take the credit?
A. If any of the following describe you, you cannot take the credit, even if
you buy a main home:
- Your income exceeds the phase-out range. This means
joint filers with MAGI of $170,000 and above and other taxpayers with
MAGI of $95,000 and above.
- You buy your home from a close relative. This
includes your spouse, parent, grandparent, child or grandchild.
- You stop using your home as your main home.
- You sell your home before the end of the year.
- You are a nonresident alien.
- You are, or were, eligible to claim the District of
Columbia first-time homebuyer credit for any taxable year.
- Your home financing comes from tax-exempt mortgage
- You owned another main home at any time during the
three years prior to the date of purchase. For example, if you bought a
home on July 1, 2008, you cannot take the credit for that home if you
owned, or had an ownership interest in, another main home at any time
from July 2, 2005, through July 1, 2008.
Q. How and when is the credit repaid?
A. The first-time homebuyer credit is similar to a 15-year interest-free
loan. Normally, it is repaid in 15 equal annual installments beginning with
the second tax year after the year the credit is claimed. The repayment
amount is included as an additional tax on the taxpayer’s income tax return
for that year. For example, if you properly claim a $7,500 first-time
homebuyer credit on your 2008 return, you will begin paying it back on your
2010 tax return. Normally, $500 will be due each year from 2010 to 2024.
You may need to adjust your withholding or make quarterly estimated tax
payments to ensure you are not under-withheld.
However, some exceptions apply to the repayment rule. They include:
- If you die, any remaining annual installments are not
due. If you filed a joint return and then you die, your surviving spouse
would be required to repay his or her half of the remaining repayment
- If you stop using the home as your main home, all
remaining annual installments become due on the return for the year that
happens. This includes situations where the main home becomes a vacation
home or is converted to business or rental property. There are special
rules for involuntary conversions. Taxpayers are urged to consult a
professional to determine the tax consequences of an involuntary
- If you sell your home, all remaining annual
installments become due on the return for the year of sale. The
repayment is limited to the amount of gain on the sale, if the home is
sold to an unrelated taxpayer. If there is no gain or if there is a loss
on the sale, the remaining annual installments may be reduced or even
eliminated. Taxpayers are urged to consult a professional to determine
the tax consequences of a sale.
- If you transfer your home to your spouse, or, as part
of a divorce settlement, to your former spouse, that person is
responsible for making all subsequent installment payments.
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