1. Specialty License Plates Specialty License Plates Division of Motorist Services Bureau of Issuance Oversight September 26, 2013 1

2. 1.Welcome 2.Department Introductions 3.Specialty License Plate Update/Overview 4.Legislative Changes 5.Attestations/Auditing 6.Office of Inspector General 7.Redesign Process 8.Specialty License Plates Online 9.Questions and Answers 2 Meeting Objectives

3. Department of Highway Safety and Motor Vehicles Providing highway safety and security through excellence in service, education and enforcement. 3 Welcome

4. 4 Introductions Julie Baker, Chief, Bureau of Issuance Oversight Alan Busenbark, Bureau of Issuance Oversight Paula Stanfield, Bureau of Issuance Oversight Jeanette Collins, Bureau of Issuance Oversight David Ulewicz, Office of the Inspector General Cindy Fernald, Office of the Inspector General

5. 120 Specialty License Plates Currently Available Moratorium ends July 1, 2014 Division Policy RS-20 – Under revision 5 Florida Specialty License Plates

6. Pre-Sale Vouchers Organization has 24 months to record a minimum of 1,000 voucher sales Pre-sales of 1,000 meet the requirement of a survey 6 Florida Specialty License Plates

7. 2012 Legislation (Ch. 2012-181, Laws of Florida): Amended section 320.08056, F.S., to prohibit annual use fees from the sale of specialty license plates to be used for lobbying an elected member or employee of the Legislature. 2013 Legislation added: American Legion Big Brothers Big Sisters Lauren’s Kids Freemasonry 7 Florida Specialty License Plates

8. Florida Specialty License Plates (SLP) Website http://www.flhsmv.gov/specialtytags/SLP.html Affidavit Forms and Instructions USE OF FUNDS – allowable expenses

9. Florida Specialty License Plates (SLP) Website http://www.flhsmv.gov/specialtytags/ ReportingRequirementsTrainingAid.pdf USE OF FUNDS – Allowable expenses

10. Specialty License Plates Use of Funds All Organizations must ensure proceeds are used in accordance with law Procedures & Requirements – Definitions – Procedures – Statutes & Resources – Contact Information Review Statutes (specific and general) and these Procedures & Requirements annually as a reminder 10

11. Specialty License Plates Use of Funds Allowable Expenditures – Start-up costs – Program and project costs – Administrative costs – Promotion and marketing costs – Annual audit or compliance affidavit costs If NOT specified in law, it is disallowable. If the percentage is exceeded, it is disallowable. 11

12. Specialty License Plates Use of Funds Start-up Costs – Expenses for “starting-up” a specialty license plate – Start up expenses can only be considered an allowable expense prior to the sale of the first specialty license plate – Reminder that all lobbying expenses prohibited as of January 1, 2013. – Record and maintain an itemized list of all start-up costs 12

13. Specialty License Plates Use of Funds Program Expenses - incurred solely for purposes provided in law. Generally include: – Salaries of employees and officers time sheets – active participation in programs – Office supplies, equipment, travel, paper, printing, postage, internet site, contracted goods and services if directly associated with program purpose – Grants - s olicitation and award process per law 13

14. Specialty License Plates Use of Funds Administrative Costs – operating costs of entity – Permitted only if specifically stated – Permitted up to the percentage specified in law – Examples include bookkeeping and support services, and other payroll and expenses not directly related to programs 14

15. Specialty License Plates Use of Funds Promotion and Marketing Expense – Permitted only if specifically stated – Permitted up to the percentage specified in law – Examples include Website Mass media advertisements Mail-outs and postage 15

16. Specialty License Plates Use of Funds Annual Audit or Compliance Affidavit Costs Audit fees for Florida Single Audit (F.S. 215.97) – permitted in the ratio of expenditures of SLP fees to all other state financial assistance expenditures for the fiscal year (F.S.215.97(8)(k)) Compliance Affidavit preparation fees – Permitted for the actual preparation costs (does not include normal accounting function expenses) 16

17. Specialty License Plates Use of Funds Disallowed Expenses – Any expenditure of SLP fees that does not comply with Florida Statutes – Any expenditure, whether authorized or not, that cannot be substantiated with a detailed employee time sheet, or a receipt and cancelled check. Receipts (or invoices) should include relevant details of services provided, dates, etc. 17

18. Specialty License Plates Use of Funds Always unallowable–FS 320.08056 (10 and 11) – Commercial or for-profit activities – General or administrative expenses unless specifically allowed by FS 320.08058 (or for certain audit or attestation costs) – Lobbying if a ‘lobbying’ firm provides other allowable services, invoices need to adequately describe the ‘non-lobbying’ services 18

19. If expended less than $500,000 in any type of State financial assistance from any State agency or not-for- profit entity File an Attestation (Affidavit Form) with DHSMV within 9 months of entity’s fiscal year end Otherwise, CPA audit in accordance with F.S. 215.97 (Florida Single Audit). Filed with DHSMV and Auditor General within 9 months of entity’s fiscal year end. 19 Specialty License Plate Audit or Attestation

20. Specialty License Plate Attestation Annually attest, under penalties of perjury, proceeds were expended in compliance with law Within 90 days of receipt – Department will determine compliance 20

21. Florida Specialty License Plates (SLP) Website Affidavits Forms and Instructions 21 All about affidavits http://www.flhsmv.gov/specialtytags/slpaudit.html

22. Office of the Inspector General Is an office within the Department of Highway Safety and Motor Vehicles and reports directly to the executive director. Section 20.055, Florida Statutes establishes an Office of Inspector General in each state agency. The Inspector General is responsible for promoting accountability, integrity, and efficiency in government. Audits are conducted in accordance with the International Standards for the Professional Practice of Internal Auditing as published by the Institute of Internal Auditors. 22

23. May be required by entity by-laws or policy or other funding agencies – Financial Statement Audit – Federal Single Audit Required by F.S. 215.97, F.S. (related rules – Ch. 69I-5,FAC) – Florida Single Audit (FSAA) if entity expends a total amount of state financial assistance (SFA), of $500,000 or greater, during the entity’s fiscal year from ANY source Various audit types above will be consolidated by the CPA if multiple types are needed 23 Audit Types conducted by CPA firms for Specialty License Plate (SLP) recipients

24. FSAA - Schedule of Expenditures of Federal Awards and State Financial Assistance 24 FFWCC FEDFED FEDFED DHSMV Direct SLP Pass-through DACS

25. 25 FSAA – Summary of Audit Results MAJOR

26. Statutory Authority – F.S. 320.08062(3) Purpose - Determine compliance with use of SLP funds – statutes, DHSMV website guidance, good business practices Scope – generally most recent 2 years of data – will go back further in certain circumstances Methodology – Preliminary (planning) – Fieldwork (in Tallahassee and at your office) – Reporting 26 Audits by DHSMV Inspector General (IG)

27. DHSMV IG Audit Methodology Preliminary – Initial contact – phone call – Written engagement letter (email) – Entrance conference (usually by phone) CEO, accountant, person familiar with use of SLP fees Identify contact person Request records (electronic) – general ledger 27

28. DHSMV IG Audit Methodology Fieldwork – After off-site review of preliminary records: Schedule an office visit Review supporting documentation – Consider additional written and verbal information – Communicate any known issues before leaving site 28

29. DHSMV IG Audit Methodology Reporting – Auditor’s work reviewed by supervisor; findings and recommendations discussed with Motorist Services – Exit Conference (by phone) – Written ‘preliminary findings’ (email) – Entity response due in 20 working days; will be included in audit report – Final report provided to entity, and available to interested parties 29

30. DHSMV IG Audit Methodology On-site coordination goal: – Work on two entities in same geographic area – Will be in the area 2-3 days – Key to success – knowledgeable contact person with sufficient authority committed to finalizing all outstanding issues 30 Efficient on-site review for your entity and DHSMV IG Minimize time – Maximize Information Efficient on-site review for your entity and DHSMV IG Minimize time – Maximize Information

31. DHSMV IG – Recent Audit Findings related to Specialty License Plates The organization did not maintain detailed supporting documentation for expenditures funded with specialty license plate fees. The organization did not maintain detailed timesheets for employee salary expenses funded with specialty license plate fees. The organization used specialty license plate fees for program expenses not authorized by statute. The organization used specialty license plate fees for unallowable audit expenses not authorized by statute. The organization used specialty license plate fees for unallowable startup or establishment expenses. 31

32. DHSMV IG - Recent Audit Findings related to Specialty License Plates The organization used specialty license plate fees for administrative expenses not authorized by statute. The organization exceeded the percentage of specialty license plate fees that is authorized for annual administrative expenses. The organization engaged in related party transactions. The organization used specialty license plate fees for unallowable education and advocacy, educational consulting, or government relations expenses (lobbying). 32

33. Specialty License Plates Keys to Maximizing Compliance Ensure key staff: – Review Statutes and DHSMV Guidance regularly – Review FSAA Catalog and Compliance Supplement All laws regarding use of funds apply even if your entity does NOT hit the $500,000 threshold (all state funds) https://apps.fldfs.com/fsaa/index.aspx – Discuss with your CPA if they are familiar with State compliance auditing – Talk to Motorist Services Staff 33

34. Specialty License Plates - Keys to Ensuring the Trust of Donors and the Public Current knowledge of regulatory requirements Continued familiarity of SLP compliance when staffing changes occur Work Environment with high regard for compliance and integrity Accounting System -separate identification and reporting of SLP revenues and expenditures Adequate records retention Adequate (clear and complete) invoice descriptions Willingness to contact DHSMV staff with questions 34

35. DHSMV IG --- 2013-14 Audits Entities which received more than $100,000 and have not been audited by the DHSMV IG or had a F.S. 215.97 single audit recently Proposed “pool” of entities – can change throughout the year. Contact: Cindy Fernald cynthiafernald@flhsmv.gov 35 …..ALL ENTITIES….. Data Collection and Preliminary Survey Site Visits …..ALL ENTITIES….. Data Collection and Preliminary Survey Site Visits

36. Organization may not request a redesign of the specialty plate unless: The inventory of those plates has been depleted The organization purchases the remaining inventory of the specialty license plates from the department at cost 36 Redesign Process

37. Submit letter of intent to redesign, agree to purchase remaining stock and artwork Counties issue their current stock Electronic and metal plates will be submitted to organization for approval Metal plates are reviewed by Florida Highway Patrol for legibility 37 Redesign Process

38. Once approved by organization, an order for plates will be sent to PRIDE PRIDE notifies Department of final stock and invoice Department notifies organization of final buyout amount - stock at PRIDE and tax collector offices Buyout check MUST be received before new design is sent to county offices Redesign process is approximately 6 – 9 months 38 Redesign Process

39. Agreement with Tax Collectors Association was terminated earlier this year Developing new functions at www.GoRenew.com to allow purchasing specialty license plateswww.GoRenew.com During renewal Outside of renewal Personalized 39 Specialty License Plates Online

40. Thank You Division of Motorist Services Bureau of Issuance Oversight (850) 617-3001 PaulaStanfield@flhsmv.gov Audits/Attestations (850) 617-3870 JeanetteCollins@flhsmv.gov 40 Specialty License Plates