October 14, 2003
CHIEF FINANCIAL OFFICER MEMORANDUM NO. 02 (2003-04)
SUBJECT: CONTRACT PAYMENTS
This memorandum supercedes and inactivates Comptroller's Memorandum No. 11 (2001-2002) dated June 19, 2002.
In an effort to improve the accountability of state funds, a new contract audit process is being implemented. The new process will include expanded pre-audits of contract payments. Elements of the expanded pre-audit will include additional focus on the scope of work, deliverables, including minimum performance standards, agency contract monitoring procedures and controls, and accountability of state funds. Minimum performance standards mean the minimum level of service/activities that the contractor must perform in order to receive payment on fixed price or cost reimbursement contracts. Additionally, the expanded pre-audit for some contracts may include agency or contractor site visits. In addition to improving the accountability of state funds, the new process will benefit state agencies by providing assistance and guidance in their contract monitoring process. The effective date for the new contract audit process is November 1, 2003. Listed below are guidelines and procedures for contractual service invoices processed directly through FLAIR. Guidelines and procedures for contractual service invoices that will be processed through My Florida Market Place will be addressed in a future memorandum.
Contracts will no longer be tracked in the FLAIR Central Contract System (Central FLAIR). This includes contractual service contracts that are currently tracked in Central FLAIR. Agencies should continue assigning contract numbers to their contracts in order to link the invoices to the contracts on file in the Bureau of Auditing. This change will not affect agency use of Departmental FLAIR regarding contracts.
Contract invoices will be subject to invoice sampling at the current threshold of $1,000.
Agencies will be required to complete a Summary of Contractual Services Agreement/Purchase Order Form (Summary Form). The Summary Form replaces the Contract Review Checklist and the Summary of Contract/Purchase Orders Less than or Equal to $75,000 Form. The Summary Form is available on the Department of Financial Services website at
http://www.dbf.state.fl.us/aadir/summary_csa.html. Agencies may adapt the Summary Form to meet their needs, with the approval of the Bureau of Auditing.
The Summary Form must be fully completed, including clear, detailed, specific and measurable deliverables that contain minimum performance standards. This information may be included on an attachment if there is insufficient space on the form.
The Summary Form information will be used in the audit of the invoice and in the determination of a need for an expanded pre-audit as described above. If the invoice is selected for an expanded pre-audit, the agency may be asked to provide additional information and documentation to support the payment.
For contractual service contracts/purchase orders that are less than or equal to $75,000, agencies must submit either a copy of the purchase order or a completed Summary Form with the invoice for payments.
For contractual service contract/purchase orders, including state term contracts, in excess of $75,000, a completed Summary Form must be included with the invoice when the voucher is submitted to the Bureau of Auditing for payment processing.
Contractual service contracts/purchase orders less than or equal to $250,000, including the renewals and amendments, may be requested by the Bureau of Auditing if the invoice is selected for an expanded pre-audit as part of the additional information and documentation that may be required.
All contractual service contracts/purchase orders, except for state term contracts, in excess of $250,000 must be submitted to the Bureau of Auditing after execution and prior to submission of the payment voucher. This requirement includes amendments and renewals for these contracts and is applicable to open-ended contracts as well. This will allow for more efficient processing of contractual service vouchers and avoid delays.
Questions regarding the new contract audit process may be directed to Suzette Harris at 850-410-9314, SunCom 210-9314 or via email: firstname.lastname@example.org; Glenn Elmer at 850-410-9428, SunCom 210-9428 or via email: email@example.com; or Sharon Schrader at 850-410-9323, SunCom 210-9323 or via email: firstname.lastname@example.org.