Volume 6 Number 20 May 15, 2009
You deserve transparency and accountability from government, especially when it comes to how your money is being handled. That’s why at this week’s Cabinet meeting, I took the lead in suggesting ways to create better oversight and increased transparency of the Florida State Board of Administration or “SBA”.
The SBA manages the $100-billion investment fund that our police officers, teachers and other state workers depend on for their retirement. As one of the SBA’s three trustees, I drew upon my business experience to propose significant reforms to the system last year. This Wednesday, Governor Crist and Attorney General McCollum joined with me and voted to pass two important motions requiring the SBA to hold quarterly board meetings and directing representatives from the trustees to study expanding the board.
Earlier this week, I had the opportunity to talk with engaged citizens in our state, speaking to the Forum Club of the Palm Beaches, one of Florida’s largest and most active civic groups. I also was able to welcome hundreds of Florida women to the inaugural Florida Conference of Women, something that as a wife, mother and businesswoman was close to my heart.
Chief Financial Officer
State of Florida
Florida’s CFO Alex Sink saw her two motions aimed at increasing transparency and financial safeguards over the Florida State Board of Administration (SBA) pass unanimously during Wednesday’s SBA Board of Trustees meeting. Drawing upon her nearly three decades of private-sector business experience, CFO Sink passed motions based on her recommendation from over a year ago, requiring the SBA to hold quarterly board meetings and to have representatives from the trustees study expanding the structure of the board.
“As one of the SBA’s three trustees, and the only current trustee with prior business experience, I have long argued that it requires more than three elected officials meeting twice-a-month for fifteen minutes to oversee a $100-billion fund that our police officers, teachers and other state employees depend on for a secure retirement,” said CFO Sink. “We need to be doing the business of the State Board of Administration in the sunshine, and I commend my fellow SBA Trustees for joining me in pushing for these reforms I proposed more than fourteen months ago.”
In March 2008, CFO Sink released ten specific recommendations designed to toughen the SBA’s financial safeguards, increase transparency in SBA communications and strengthen board oversight over a firm responsible for so many Floridians’ retirement funds.
CFO Sink’s first passed motion enacted her recommendation that the SBA hold public quarterly board meetings, in addition to the bimonthly SBA updates currently provided during meetings of the Florida Cabinet. These in-depth meetings will bring SBA investor advisors, legal staff, audit committee members, and trustees together to better safeguard Florida retirement accounts and other investments, and do the business of the SBA in the sunshine.
CFO Sink’s second passed motion requires that each SBA trustee appoint a staff member to an ad hoc workgroup charged with researching government structure models, identifying best practices, and making recommendations to the trustees on how the governance of the SBA can best serve the people of Florida. Appointments must be made by June 15 and a report is due by September 1, 2009. After this report, CFO Sink is hopeful that trustees’ recommendations can be made to the Legislature regarding how best to expand the SBA board.
“Given the unprecedented financial environment that we are currently in, we cannot lose sight of the need for increased accountability and transparency for the investments of Floridians’ money,” CFO Sink continued. “So many Floridians who depend on the SBA for their retirement security deserve nothing less than a more modern, businesslike approach to managing their money.”
The SBA manages the assets of the Florida Retirement System Pension Plan, the Lawton Chiles Endowment Fund, the Local Government Surplus Funds Trust Fund, the Hurricane Catastrophe Fund, and a variety of other mandates.
CFO Sink talked with the Forum Club of the Palm Beaches as a keynote speaker to its luncheon meeting held this Monday, May 11, in West Palm Beach. Hundreds of Forum Club members and attendees listened as CFO Sink spoke about her role and experiences serving the people of Florida and brining her business experience to get results. CFO Sink also answered questions about her role in government and her priorities for the state of Florida.
“Organizations like the Forum Club are essential to achieving an informed electorate,” CFO Sink said. “Promoting active participation by all citizens in the political process is fundamental to our democracy and I’m honored to be here today.”
Before the presentation, CFO Sink met with the crowd that included many area elected officials, such as State Senators Dave Aronberg and Jeff Atwater and Floridians who live and work in Palm Beach County. CFO Sink also stopped at two tables to meet dozens of high school students from the Finance Academy at the Dreyfoos School of the Arts in West Palm Beach.
CFO Alex Sink gave the welcome address Tuesday to more than 1,000 women who attended the first annual Florida Conference for Women in Orlando. The audience enthusiastically applauded the CFO’s message that, as a wife, mother, and businesswoman, she understands the importance of fostering educational and networking opportunities for women.
“I understand first-hand the importance of empowering women in the workplace and encouraging the best practices they need to succeed,” CFO Sink said.
CFO Sink also spoke about how as a working mom and businesswoman herself, she understands the difficulty women face in balancing their professional and personal lives. The CFO received a warm introduction by City of Orlando Mayor Buddy Dyer.
CFO Sink noted that the conference was an especially unique forum for women to develop new business strategies and to share their formulas for success, and she commended the Florida Commission on the Status of Women for their efforts to make this conference a reality. She advised the audience to continually seek to educate themselves on opportunities and resources, and that networking is the key to success. CFO Sink also lauded the conference for its well-balanced approach to issues, particularly the need for personal financial well-being.
During a breakout roundtable discussion, Deputy CFO Tammy Teston provided tips for “Surviving and Thriving in a Recession.” Teston said she feels fortunate to have the opportunity to work with CFO Alex Sink and discussed how being financially literate empowers women to achieve greater success in life.
Deputy CFO Teston echoed CFO Sink’s message that keeping in touch with friends and acquaintances and networking are key to success in tough economic times. She said surviving in difficult times begins with learning and developing good habits, from clipping grocery coupons to creating efficiencies at work and home to save time and money.
Florida’s CFO Alex Sink on Thursday announced the arrest of Angella Muthoni Chegge-Kraszeski, 33, of Raleigh, North Carolina, for trying to defraud Florida in a failed attempt to steal millions from the state.
Chegge-Kraszeski was arrested for allegedly establishing a fake corporation and submitting phony documentation that directed the Florida Department of Financial Services (DFS) to divert funds to a bank account set up by Chegge-Kraszeski using an alias. Security and verification procedures put in place at the direction of CFO Sink caught the attempted fraud before any money was stolen.
“This arrest proves that smart safeguards, an effective team and a quick response are the keys to cracking down on financial fraud, a crime that steals from the people of Florida,” said CFO Alex Sink. “I commend our Department’s Office Fiscal Integrity, our Division of Accounting and Auditing, and our law enforcement partners in North Carolina for taking swift action to ensure that not one dime was stolen from Florida taxpayers.”
Chegge-Kraszeski was arrested by the North Carolina State Bureau of Investigation (SBI) working in conjunction with CFO Sink’s Office of Fiscal Integrity and charged with “Attempt to Obtain Property by False Pretenses over $100,000” a Class C felony, punishable by up to 6 years in prison.
On March 31, 2009 the Florida Department of Financial Services received Chegge-Kraszeski’s fraudulent documentation that gave the appearance of being from a legitimate Florida vendor, directing the Department to change the financial institution information to an account established by Chegge-Kraszeski. The Department’s Division of Accounting and Auditing EFT Payment Section discovered the fraudulent attempt and turned it over to the Division’s Office of Fiscal Integrity for investigation.
The Office of Fiscal Integrity is responsible for statewide investigations of allegations of fraud, waste, or abuse involving State of Florida property and money. To report fraud, waste, or abuse of State of Florida resources, call1-800-GET-LEAN (1-800-438-5326) or the Office of Fiscal Integrity directly at 850-413-5514.
Florida’s CFO Alex Sink on Monday called on the Florida Department of Management Services (DMS) to post the travel logs for Florida’s state planes online, increasing transparency and accountability to the people of Florida.
“It’s important that the business of state government is as open and transparent as possible. That’s why I am calling on the Department of Management Services to post details about each state plane flight online,” said CFO Sink. “We have a responsibility to increase openness and transparency in Tallahassee, and making this travel information available to the public continues this commitment.”
DMS is responsible for the management of state-owned and operated aircraft in Florida. Currently, DMS tracks all state plane flights taken by Florida’s elected officials and is able to provide this information upon request. CFO Sink is asking DMS to post the state plane manifests online monthly for all flights going forward, including which official took the plane and where they went, after the safe return of all passengers, and following all proper security measures.
Florida’s Chief Financial Officer Alex Sink sent a letter to every Member of Florida’s Congressional Delegation asking them to repeal a 3 percent withholding requirement on government contracts, which would be harmful for Florida’s small businesses and cost millions to implement in tight budget times.
“The requirement of a three percent withholding not only places an enormous burden on state and local governments, it is extremely detrimental to the small businesses that are the backbone of Florida’s economy,” CFO Sink wrote.
CFO Sink asked Florida’s Congressional Delegation to repeal Section 511 of the Tax Increase Prevention and Reconciliation Act (TIPRA). Section 511 is set to go into effect in 2012, and Florida will be forced to spend money implementing design changes for compliance before that time if it the withholding requirement is not repealed.
Hurricane season starts June 1. Are you prepared? Get the information you need to make sure your family and home are protected.
The seminar will be held at the University of Florida Extension Service, Volusia County Agricultural Center Auditorium, 3100 E. New York Avenue, Deland, FL 32724, at 7 p.m. on May 21.
Contributors will be Randell Brown, Outreach Coordinator with the Florida Department of Financial Services discussing homeowners insurance, mitigation and insurance claims/adjusters; Debbie Shull, Management Specialist, with the Volusia County Emergency Operations Center discussing evacuation routes and Kathy Bryant, Extension Agent III, University of Florida Extension Service on storm shelters.
Sponsored by the Department of Financial Services in partnership with the University of Florida Extension Service.
The Florida Boots to Books initiative was created to welcome returning veterans to Florida’s institutions of higher learning and help each veteran meet deserved educational goals.
The largest GI bill since World War II has been signed into law and school applications are now being taken. The new legislation provides monumental benefits and an expansion of educational assistance to military veterans beginning in August, 2009. Florida has a large portion of the veterans who are eligible who claim our state as their official residence. Currently more than 17,000 veterans are already enrolled in a Florida post-secondary educational institution.
To create a seamless transition from the battlefield to the classroom, the Board of Governors has assisted the Florida Department of Veterans Affairs in providing a smooth transition and accurate information for the soldiers and their families. Check out the new Web site, Florida Boots to Books, at http://www.FLBootstoBooks.org. The program is a partnership with the Executive Office of the Governor, Florida’s community colleges, public universities and private colleges and universities. The new GI Bill is also referred to as the “Post 9/11 GI Bill.” It will provide eligible veterans with:
Reserve and National Guard members who have been activated for more than 90 days since 9/11 are also eligible for GI Bill benefits. Read News and Notes for Florida Veterans.
It’s that special time of year: going to graduation, buying that new car, saving on auto insurance. Wait, auto insurance….savings…you probably were thinking those two words couldn’t be used in the same sentence. But they can! Like the popular game show “Deal or No Deal,” choosing auto insurance may feel like a guessing game, but it doesn’t have to.
Florida Chief Financial Officer Alex Sink said many Floridians could save hundreds and even thousands of dollars every year on their auto insurance by looking at a few simple details. As part of her “Be the CFO of Your Family” initiative, Sink offers the following 5 “W’s” when thinking about automobile insurance.
“There can be a mix of excitement and pressure when you are looking to buy a car,” Sink said. “But just like buying a car, you should ask lots of questions and compare quotes when buying auto insurance.”
For more information or to tell about other ways to save on insurance, visit www.myfloridacfo.com.
Remember, these are discounts that you deserve. During these economic times, companies’ rates are competitive, so take advantage. Don’t just settle for what one auto insurer offers, keep looking until you find the right deal for you.
This week’s Hurricane Financial Checklist item is about the importance of creating a Family Disaster Plan. Creating a plan will help prepare your family to financially and physically endure difficult times. A plan will also assist your family in recovering from a disaster more quickly.
A Family Disaster Plan should take every member of the family into consideration. It should contain:
It is recommended that a Family Disaster Plan include a three-day supply of non-perishable food and drinking water. Non-perishable food can be taken with you if you evacuate and provide extra savings while you wait to return. These food items should not have to be cooked and should be stored in a dry, cool location. Two gallons of water for drinking, cooking and hygiene needs should be stored for each family member per day. Three bags of ice should also be stored. Remember to include a first-aid kit and obtain a copy of your county’s evacuation routes and Emergency Management telephone numbers.
The Florida Division of Emergency Management’s website, http://www.floridadisaster.org/family, allows you to create a customized Family Disaster Plan that automatically includes your county’s current evacuation routes and contact telephone numbers.
Check back with us next week for more ideas.
Planning for retirement starts with a focus on savings and investments with the bottom line on how much income will be needed for retirement years. But take into consideration that taxes can cost you plenty even in your retirement years and they need to have a role in your strategic planning.
During working years, we all work to minimize the impact of taxes on income. During retirement the same rules apply with some variations. The basic need is the same - to minimize taxes, which will increase cash flow needed to meet your expenses while leaving enough in savings to keep the opportunity to grow.
One often unknown tax fact is the way that Social Security income is taxed.
If the total of your adjusted gross income (AGI), nontaxable interest, and half your Social Security benefit is above a certain dollar amount based on your individual filing status, then as much as 85% of your Social Security retirement benefit may be subject to income taxes. Discuss this with a financial advisor prior to your retirement to know what to expect.
Strategies that may be able to help minimize the income tax on your Social Security include changing your tax filing status and/or reducing your AGI by changing the type of assets owned. For instance, interest earnings in a deferred annuity are not included in your AGI until they're withdrawn, whereas interest earnings on CDs and most bonds are included, even if the interest is reinvested.
Managing your income to reduce the tax impact on Social Security benefits may increase your cash flow and the comfort of your retirement years.
Helpful tips suggested by eViews reader Leroy (Royle) Smith Jr.
Do you know who originally proposed daylight savings time? It was Benjamin Franklin who thought of the idea during a sojourn as an American delegate in Paris in 1784. However, it wasn’t until 1918 that the United States first enacted a daylight-savings-time law. It was repealed a year later, but was again enacted in 1945.
Today, with the extra hour of daylight, we can do additional things to increase our use of natural light. Consider opening the blinds or curtains in the home instead of turning on the lights in the early evening. This will give you more time before you need to start using extra electricity.
While you are considering your home's lighting, take an inventory of the number of light bulbs you use in each room of your house. To save money, consider getting rid of any redundant bulbs. If you have more than one lamp in a room, place the lamps strategically to minimize the amount of power usage and maximize lighting efficiency. Removing a few bulbs around the home will take some kilowatts off your monthly bill. Become a smart user of energy!