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CDBG Agreement with JCS of South Florida, Inc. $100,000 ao,3 o?9�2 �v�, 7 //7/ COMMUNITY DEVELOPMENT BLOCK GRANT AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC. �f q This Agreement made and entered into this o3 day of v 4 �R r , 201 ', by and between the CITY OF MIAMI BEACH, a Florida municipal corporation having its prin ipal office at 1700 Convention Center Drive, Miami Beach, Florida, 33139, (hereinafter referred to as "City"), and JEWISH .COMMUNITY SERVICES OF SOUTH FLORIDA, INC., a not-for profit corporation having its principal office at 735 NE 125th Street, North Miami, Florida, 33161-5611 (hereinafter referred to as"Provider"). WHEREAS, the City is an entitlement recipient of U.S. Department of Housing and Urban Development (HUD) grant programs, Community Development Block Grant (CDBG)funds, and HOME Investment funds (HOME), and the City expects to continue to receive entitlement funds from these grant programs to operate the City's housing and community development activities; and WHEREAS, each year, the City prepares a One-Year Action Plan detailing how it intends to allocate funds received from HUD to conduct eligible activities for the benefit of low and moderate-income Miami Beach residents; and WHEREAS, on May 8, 2013, the City's Community Development Advisory Committee (CDAC) approved the funding recommendation of the One-Year Action Plan for Fiscal Year (FY) 2013/2014 activities; and WHEREAS, in accordance with HUD regulations and the City's Citizen Participation Plan concerning the preparation of the One-Year Action Plan, the Administration held two (2) public meetings, receiving citizens'comments, and advertised a 30-day citizen comment period,from June 13, 2013, through July 12, 2013;and WHEREAS, on July 17, 2013, the City Commission approved Resolution No. 2013- 28292, approving the One-Year Action Plan for Federal Funds for FY 2013/2014, and providing CDBG funds, in the amount of $100,000, to Provider for the Miami Beach Senior Center Capital Improvements, located at 610 Espanola Way, Miami Beach, Florida, 33139. NOW, THEREFORE, in consideration.of the mutual benefits contained herein, the City and Provider agree as follows: Section 1. Agreement Documents: Agreement documents shall consist of this Agreement and the following four (4) Exhibits, all of which are attached and incorporated in this Agreement: • Exhibit A-Scope of Services • Exhibit B-Documentation • Exhibit C- Budget • Exhibit D-Financial Management for CDBG-funded activities Section 2. Statement of Work: The Provider agrees to implement the Project in accordance with Exhibits A and B, which Project is summarized as follows: Miami Beach Senior Center Capital Improvements Improvements to the Miami Beach Senior Adult Day Care Center. This is a historic building that provides services to income-eligible elderly individuals (hereinafter, the "Project"). Section 3. Agreement Amount: The City agrees to make available ONE HUNDRED THOUSAND ($100,000) for use by the Provider during the Term of the Agreement (hereinafter, the 1 aforestated amount including, without limitation, any additional amounts included thereto as a result of a subsequent amendment(s) to the Agreement, shall be referred to as the "Funds"). Section 4. Alterations: Any proposed changes in the Project including, without limitation, the Budget in Exhibit II, shall first be submitted, reviewed, and approved, in writing, by the City Manager, which approval, if given at all, shall be at his sole reasonable judgment and discretion. Section 5. Method of Payment and Reporting Requirements: During the Term, Provider shall submit monthly Project progress reports to the City on the 10th day of each month, respectively. As part of the report submitted in October, 2014 the Provider also agrees to include, a comprehensive final report covering the agreed-upon Project objectives, activities, and expenditures, and including, but not limited to, performance data on client feedback with respect to the goals and objectives outlined in Exhibit A. Other reporting requirements may be required by the City.Manager in the event of Project changes; the need for additional information or documentation arises; and/or legislative amendments are enacted. Reports and/or requested documentation not received by the due date shall be considered delinquent and may be cause for default and termination of this Agreement, pursuant to Section 12 hereof. Section 6. Monitoring: At its discretion, the City may schedule at least one (1) annual on-site monitoring visit with the Provider to evaluate the progress of the Project, and/or to provide technical assistance. At the City's option, a desk top review of the activities may be conducted in lieu of an on-site visit. Section 7. Additional Conditions and Compensation: The parties acknowledge that the Funds originate from CDBG grant funds from HUD, and must be implemented in full compliance with all of HUD's rules and regulations. In the event of curtailment or non- production of said federal funds, the financial sources necessary to continue to pay the Provider all or any portions of the Funds will not be available. In that event, the City may terminate this Agreement, which termination shall be effective as of the date that it is determined by the City Manager, in his sole discretion and judgment, that the Funds are no longer available. In the event of such termination, the Provider agrees that it will not look to,.nor seek to hold the City, nor any individual member of the City Commission and/or City Administration, personally liable for the performance of this Agreement, and the City shall be released from any further liability to Provider under the terms of this Agreement. Section 8. Compliance with Local, State and Federal Regulations - The Provider agrees to comply with all applicable Federal regulations as they may apply to Project administration and to carry out each activity in compliance with the laws and regulations as described in 24 CFR 570 Subpart K, as same may be amended from time to time. Additionally, the Provider will comply with all State and local (City and County) laws and ordinances hereto applicable. It shall be the Provider's sole and absolute responsibility to continually familiarize itself with any and all such applicable Federal, State, County, and City regulations, laws, and/or ordinances. Section 9. Restrictions for Certain Resident Aliens - Certain newly legalized aliens, as described in 24 CFR Part 49, are not eligible to apply for benefits under covered activities funded by the CDBG Program. "Benefits" under this section means financial assistance, public services, jobs, and access to new or rehabilitated housing and other facilities made available under activities funded by the CDBG Program. "Benefits" do not include relocation services and payments to which displacees are entitled by law. 2 Section 10. Assignment/Subcontract: No part of this Agreement may be assigned or subcontracted without the prior written consent of the City, which consent, if given at all, shall be at the City's sole discretion and judgement. Section 11. Term: This Agreement shall commence on October 1, 2013, and terminate on September 30, 2014, (the Term), with the understanding that at, the end of the Term, the City Commission has the authority to reappropriate any remaining unused Funds. Section 12. Termination of Agreement: 12.1 Termination for Convenience: This Agreement may be terminated by the City, for convenience and without cause, through its City Manager, upon 30 days prior written notice to Provider. In the event of such termination for convenience, the City shall cease any payments to Provider for costs resulting from obligations which were not approved before the effective date of termination. Provider shall be solely responsible for immediately returning any unused or unapproved Funds as of the date of termination, and shall also be solely responsible for submitting a final report, as provided in Section 5 hereof, (detailing all Project objectives, activities and expenditures up to the effective date of the termination). Said final report shall be due within five (5) working days following the effective date of termination. Upon timely receipt of Provider's final report, the City, at its sole discretion, shall determine the amount (if any) of any additional portion of the Funds to be returned to the City as a result of any unapproved or unused Funds, or incomplete Project items, and shall provide Provider with written notice of any monies due. Said additional monies shall be due and payable immediately upon receipt of such notice by Provider. Notwithstanding the preceding, the City reserves any and all legal rights and remedies it may have with regard to recapture of all or any portion of the Funds, or any assets acquired or improved in whole or in part with said Funds. 12.2 Termination for Cause: Notwithstanding Subsection 12.1 above, the City may also terminate this Agreement for cause. "Cause" shall include, but not be limited to, the following: a. Failure to.comply and/or. perform, in accordance with the terms of this Agreement, or any Federal, State, County or City law, or regulation. b. Submitting reports to the City which are late, incorrect, or incomplete in any material respect. C. Implementation of this Agreement, for any reason, is rendered impossible or infeasible. d. Failure to respond in writing to any concerns raised by the City, including substantiating documents when required/requested by the City. e. Any evidence of fraud, mismanagement, and/or waste, as determined by the City's monitoring and applicable HUD rules and regulations. The City shall notify the Provider in writing when the Provider has been placed in default. Such notification shall include: (i) actions taken by or to be taken by the City, such as withholding of payments; (ii) actions to be taken by the Provider as a condition precedent to curing the default; and (iii) a reasonable cure period, which shall be no less than thirty (30) days from notification date. In the event the Provider fails to cure such default within the aforestated cure period, this Agreement shall be considered terminated for cause, without requiring further notice to Provider, and Provider shall be solely responsible for repayment to the City of all or any portion of the Funds disbursed to Provider, as deemed required by the City, in its sole and reasonable discretion. Said monies shall be immediately due and payable by Provider. Notwithstanding the preceding, the 3 City reserves any and all legal rights and remedies it may have with regard to recapture of all or any portion of the Funds, or any assets acquired or improved in whole or in part with said Funds. 12.3 Termination for Lack of Funds: In the event of curtailment of, or regulatory constraints placed on the Funds by HUD, this Agreement will terminate, effective as of the time that it is determined by the City Manager that such Funds are no longer available. Costs of the Provider incurred after termination are not allowable unless expressly authorized in writing by the City Manager (whether in the notice of termination or subsequent thereto), and, in that case, may only be allowable if, in the sole discretion of the City Manager: a. The costs resulted from obligations which were properly incurred before the effective date of termination, were not in anticipation of it, and are noncancelable; and b. The costs would be allowable.if the Agreement expired normally at the end of its Term. Section 13. Equal Employment Opportunities: The Provider shall comply with equal employment opportunities as stated in Executive Order 11246, entitled "Equal Employment Opportunity" as amended Executive Order 11375, and as supplemented in Department of Labor regulations. Section 14. Program Income: Any "Program Income" (as such term is defined under applicable Federal regulations) gained from any activity of the Provider funded by CDBG funds shall be reported to the City and utilized by the Provider in the operation of the Project. Section 15. Religious Organization or Owned Property: CDBG funds may be used by religious organizations or on property owned by religious organizations only with prior written approval from the City Manager, and only in accordance with requirements set in 24 CFR §570.2000). The Provider shall comply with First Amendment Church/State principles, as follows: a. It will not discriminate against any employee or applicant for employment on the basis of religion and will not limit employment or give preference in employment to persons on the basis of religion. b. It will not discriminate against any person applying for public services on the basis of religion and will not limit such services or give preference to persons on the basis of religion. c. It will retain its independence from Federal, State, and local governments, and may continue to carry out its mission, including the definition, practice, and expression of its religious beliefs, provided that it does not use direct CDBG funds to support any inherently religious activities, such as worship, religious instruction, or proselytizing. d. The Funds shall not be used for the acquisition, construction, or rehabilitation of structures to the extent that those structures are used for inherently religious activities. Where a structure is used for both eligible and inherently religious activities, CDBG funds may not exceed the cost of those portions of the acquisition, construction, or rehabilitation that are attributable to eligible activities in accordance with the cost accounting requirements applicable to CDBG funds in this part. Sanctuaries, chapels, or other rooms that a CDBG-funded religious congregation uses as its principal place of worship, however, are ineligible for CDBG-funded improvements. Section 16. Reversion of Assets: In the event of a termination of this Agreement, or upon expiration of the Agreement, and in addition to any and all other remedies available to 4 the City (whether under this Agreement, or at law or in equity), the Provider shall immediately transfer to the City any Funds on hand at the time of termination (or expiration) and any accounts receivable attributable to the use of CDBG funds. The City's receipt of any Funds on hand at the time of termination, shall not waive the City's right (nor excuse Provider's obligation) to recoup all or any portion of the Funds, as the City may deem necessary. Any real property under the Provider's control that was acquired or improved in whole or in part with CDBG funds (including CDBG funds provided to the Provider in the form of a loan) in excess of$25,000 must either: a. Be used to meet one of the national objectives in 24 CFR 570.208 (formerly section 570.901) until five years after expiration of the term of this Agreement, or for such longer period of time as determined to be appropriate by the City and as memorialized by the City and Provider in an amendment to this Agreement or such instrument as the City, at its discretion, determines appropriate; or b. If not used in accordance with the above subsection (a), the Provider shall pay to the City an amount equal to the current market value of the property less any portion of the value attributable to expenditures of non-CDBG funds for the acquisition of, or improvement to, the property. Section 17. Conformity to HUD regulations: The Provider agrees to abide by guidelines set forth by HUD for the administration and implementation of the CDBG Program, including applicable Uniform Administrative Requirements set forth in 24 CFR 570.502, and applicable federal laws and regulations in 24 CFR 570.600, et seq. In this regard, the Provider agrees that duly authorized representatives of HUD shall have access to any books, documents papers and records of the Provider that are direct) pertinent to this > Pa P directly for the purpose of making audits, examinations, excerpts and transcriptions. The Provider shall comply with the requirements and standards of OMB Circular No. A- 122, "Cost Principles for Non-profit Organizations", or OMB Circular No. A-21, "Cost Principles for Educational Institutions"as applicable. The Provider shall comply with the following provisions of the Uniform Administrative requirements of OMB Circular A-110 (implemented at 24 CFR Part 84, "Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations")or the related CDBG provision,.as specified in this section: a. Subpart A-"General", b. Subpart B - "Pre-Award Requirements", except for 84.12, "Forms for Applying for Federal Assistance"; C. Subpart C-"Post-Award Requirements", except for: (1) Section 84.22, "Payment Requirements"-Grantees shall follow the standards of 85.20(b)(7)and 85.21 in making payments to sub-recipients; (2) Section 84.23, "Cost Sharing and Matching"; (3) Section 84.24, "Program Income"- In lieu of 84.24, CDBG sub-recipients shall follow 570.504; 4 Section 84.25 "Revision of Budget and Program Plans"; ( ) � 9 9 (5) Section 84.32, "Real Property" - In lieu of 84.32, CDBG sub-recipients shall follow 570.505; 5 (6) Section 84.34(g), "Equipment" - In lieu of the disposition provisions of 84.34(g), the following applies: a. In all cases in which equipment is sold, the proceeds shall be program income (pro-rated to reflect the extent to which CDBG funds were used to acquire the equipment); and b. Equipment not needed by the sub-recipient for CDBG activities shall be transferred to the recipient for the CDBG program or shall be retained after compensating the recipient; (7) Section 84.51(b), (c), (d), (e), (f), (g), and (h), "Monitoring and Reporting Program Performance"; (8) Section 84.52, "Financial Reporting"; (9) Section 84.53(b), "Retention and access requirements for records". Section 84.53(b)applies with the following exceptions: a. The retention period referenced in 84.53(b) pertaining to individual CDBG activities shall be four years; and b. The retention period starts from the date of submission of the annual performance and evaluation report, as prescribed in 24 CFR 91.520, in which the specific activity is reported on for the final time rather than from the date of submission of the final expenditure report for the award; (10)Section 84.61, 'Termination"- In lieu of the provisions of 84.61, CDBG subrecipients shall comply with 570.503(b)(7); and d. Subpart D - "After-the-Award Requirements" - except for 84.71, "Closeout Procedures". Section 18. Sponsorships: The Provider agrees that all notices, informational pamphlets, press releases, advertisements, descriptions of the sponsorship of the Project, research reports, and similar public notices prepared and released by the Provider for, on behalf of, and/or about the.Project, shall include-the statement: "FUNDED BY THE CITY OF MIAMI BEACH COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM" In written materials, the words "CITY OF MIAMI BEACH COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS ADMINISTERED BY THE CITY OF MIAMI BEACH OFFICE OF REAL ESTATE HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT" shall appear in the same size letters or type as the name of the Provider. Section 19. Examination of Records: The Provider shall maintain sufficient records in accordance with 24 CFR 570.502 and 570.506 to determine compliance with the requirements of this Agreement, the CDBG Program, and all other applicable laws and regulations. This documentation shall include, but not be limited to, the following: a. Books, records and documents in accordance with generally accepted accounting principles, procedures and practices, which sufficiently and properly reflect all revenues and expenditures of funds provided directly or indirectly by this 6 Agreement, including matching funds and Program Income. These records shall be maintained to the extent of such detail as will properly reflect all net costs, direct and indirect labor, materials, equipment, supplies and services, and other costs and expenses of whatever nature for which reimbursement is claimed under the provisions of this Agreement. b. Time sheets for split-funded employees, which work on more than one activity, in order to record the CDBG activity delivery cost by Project and the non-CDBG related charges. C. How the Statutory National Objective(s) as defined in 24 CFR 570.208 and the eligibility requirement(s) under which funding has been received, have been met. These also include special requirements such as necessary and appropriate determinations as defined in 24 CFR 570.209, income certifications, and written Agreements with beneficiaries, where applicable. The Provider is responsible for,maintaining and storing all records pertinent to this Agreement in an orderly fashion in a readily accessible, permanent and secured location for a period of four (4) years after expiration of this Agreement, with the following exception: if any litigation, claim or audit is started before the expiration date of the four (4) year period, the records will be maintained until all litigation, claims or audit findings involving these records are resolved. The City shall be informed in writing after closeout of this Agreement, of the address where the records are to be kept. Section 20. Audits and Inspections: At any time during normal business hours, and as often as the City(and/or its representatives) may deem necessary, the Provider shall make available all records, documentation, and any other data relating to all matters covered by the Agreement,for review, inspection or audit. Audits shall be conducted annually and shall be submitted to the City 180 days after the end of the Provider's fiscal year. The Provider shall comply with the requirements and standards of OMB A-133, "Audits of Institutions of High Education and Other Non-Profit Institutions" (as set forth in 24 CFR Part 45), or OMB Circular A-128, "Audits of State and Local Governments" (as set forth in 24 CFR Part 44), as applicable. If this Agreement is closed-out prior to the receipt of an audit report, the City reserves the right to recover any disallowed costs identified in an audit after such closeout. Section 21. Indemnification/Insurance Requirements: The Provider shall indemnify and hold harmless the City, and its officers, employees, contractors and agents, from any and all claims, liability, losses and causes of action which may arise out of any act, error, omission, negligence or misconduct on the part of the Provider, or any of its officers, employees, contractors, agents, patrons, guests, clients, licensees, invitees, or any persons acting under the direction, control, or supervision of Provider pursuant to this Agreement and/or the Project. The Provider shall pay all claims and losses of any nature whatsoever in connection therewith and shall defend all suits in the name of the City, and shall pay all costs (including attorney's fees) and judgments which may issue thereon. This Indemnification shall survive the termination and/or expiration of this Agreement. The Provider shall not commence any work and/or services pursuant to this Agreement until all insurance required under this Section has been obtained and the City's Risk Manager has approved such insurance. In the event evidence of such insurance is not forwarded to the City's Risk Manager within thirty (30) days after the commencement date of the Term, this Agreement shall automatically terminate and become null and void, and the City shall have no obligation under the terms and conditions hereof. 7 The Provider shall maintain and carry in full force during the Term of this Agreement, and/or throughout the duration of the Project contemplated herein, whichever is longer, the following insurance: a. General Liability Policy with coverage for Bodily Injury and Property Damage, in the amount of $1,000,000 single limit, subject to adjustment for inflation. The policy must include coverage for contractual liability to cover the above indemnification. b. Worker's Compensation and Employers Liability, as required pursuant to Florida Statutes. c. Automobile and vehicle coverage shall be required when the use of automobiles and other vehicles are involved in any way in the performance of the Agreement. Limits for such coverage shall be in the amount of $500,000, subject to adjustment for inflation. The City of Miami Beach shall be named as an additional insured under all such insurance contracts. Thirty- (30) day written notice of cancellation or substantial modification of the insurance coverage must be given to the City's Risk Manager by the Provider and its insurance company. The insurance must be furnished by insurance companies authorized to do business in the State of Florida, and approved by the City's Risk Manager. The companies must be rated no less than "B+"as to management, and not less than "Class VI" as to strength by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent, subject to the approval of the City's Risk Manager. Original Certificates of Insurance for the above coverage must be submitted to the City's Risk Manager for approval prior to any work commencing. These certificates will be kept on file in the Office of the Risk Manager, Third Floor City Hall. The City shall have the right to obtain from the Provider specimen copies of the insurance policies, in the event that submitted Certificates of Insurance are inadequate to ascertain compliance with required coverage. Compliance with the foregoing requirements shall not relieve the Provider of its obligation to indemnify and hold the City harmless, as required in this section. Section 22. Conflict of Interest: The Provider covenants.that no person under its employ who presently exercises any functions or responsibilities in connection with community development funded activities has any personal financial interests, direct or indirect, in this Agreement. The Provider covenants that in the performance of this Agreement, no person having such conflicting interest shall be employed. The Provider covenants that it will comply with all provisions of 24 CFR 570.611 "Conflict of Interest", and the, State, County and City of Miami Beach statutes, regulations, ordinances or resolutions governing conflicts of interest. The Provider shall disclose, in writing, to the City any possible conflicting interest or apparent impropriety that is covered by the above provisions. This disclosure shall occur immediately upon knowledge of such possible conflict. The City will then render an opinion, which shall be binding on both parties. Section 23. Venue: This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, both substantive and remedial, without regard to principles of conflict of laws. The exclusive venue for any litigation arising out of this Agreement shall be Miami-Dade County, Florida, if in state court, and the U.S. District Court, Southern District of Florida, if in federal court. BY ENTERING INTO THIS AGREEMENT, CITY AND PROVIDER EXPRESSLY WAIVE ANY RIGHTS EITHER PARTY MAY HAVE TO A TRIAL BY JURY OF ANY CIVIL LITIGATION RELATED TO, OR ARISING OUT OF, THIS AGREEMENT. 8 Section 24. Notices: All notices required under this Agreement shall be sent to the parties at the following address: City: Maria L. Ruiz, Interim Director Office of Housing and Community Development City of Miami Beach 1700 Convention Center Drive, Miami Beach, FL 33139 Provider: Fred Stock, Chief Executive Officer Jewish Community Services of South Florida, Inc.2 735 NE 125th Street North Miami, FL 33161-5611 Section 25. Limitation of Liability: The City desires to enter into this Agreement only if in so doing the City can place a limit on City's liability for any cause of action for money damages due to an alleged breach by the City of this Agreement, so that its liability for any such breach never exceeds the sum of$10,000. Provider hereby expresses its willingness to enter into this Agreement with Provider's recovery from the City for any damage action for breach of contract to be limited to a maximum amount of$10,000. Accordingly, Provider hereby agrees that the City shall not be liable to Provider for damages in an amount in excess of $10,000, for any action or claim for breach of contract arising out of the performance or nonperformance of any obligations imposed upon the City by this Agreement. Nothing contained in this subparagraph or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon City's liability as set forth in Florida Statutes, Section 768.28. Section 26. This Agreement shall be binding upon all parties hereto and their respective heirs, executors, administrators, successors and assigns. [SIGNATURES TO FOLLOW] I 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officials on the day and date first above indicated. JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC. a Florida not-for-profit corporation ATT T: Secr0fary CEO Signature Abe Rudman Fred Stock, Chief Executive Officer Print Name Print Name and Title CITY OF MIAMI BEACH a Florida Municipal corporation ' ATTEST: City Clepk Phili le V ih t- Print Name INCORP ORATED. am 47 ; •F r) ,r!' APPROVED AS TO FORM &LANGUAGE &FOR EXECUTION � 2 ity r e at F:\RHCD\$ALL\HSG-CD\CDBG\CDBG 2013 2014 Capital Improvements\JCS FY 13 14 CIA= 10 1 EXHIBIT "A" "SCOPE OF SERVICES" The Sub-Recipient agrees to provide the following: Seevice N',urnber of Units Provision of improvements to the Miami Beach Senior 1 Adult Day Care Center. Related Definitions: Davis-Bacon Act Compliance — The Davis-Bacon Act applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The Davis-Bacon Act directs the Department of Labor to determine such locally prevailing wage rates. Affordable housing rehabilitation projects of eight (8) or more units using CDBG funds must ensure Davis-Bacon Act compliance. Affordable housing rehabilitation projects of 12 or more units using HOME funds must ensure Davis-Bacon Act compliance. Environmental Review — Projects must have an Environmental Review unless they meet criteria specified in HUD regulations that would exempt or exclude them from Request for Release of Funds (RROF) and environmental certification requirements (24 CFR sections 58.1, 58.22, 58.341 58.35 and 570.604). Evidence of Procurement—All expenses incurred with grant funds require evidence of procurement according to this Agreement. Please carefully read the Agreement and related HUD rules to ensure compliance. Monthly Progress Report — The Sub-Recipient is required to submit a monthly project progress report by the10th of the following month. The report must be signed by the person who prepared the report as well as the agency's authorizing party. The report summarizes the progress made, expenses incurred and deliverables completed. This report must be completed regardless of whether or not funds are requested. Monthly Financial Report — The Sub-Recipient is required to submit a monthly financial report by the 10th of the following month regardless of whether or not funds are requested. The report delineates project expenses incurred including non-City funds and must include the corresponding evidence of expense incurred for any expense which is being submitted for reimbursement. Monthly Proformas — All Capital projects with multiple (more than one) funding sources require the submission of monthly proformas to the City. 1 Professional Services Contracts — Professional services funded through this Agreement must adhere to procurement guidelines as appropriate and have executed written agreements between the Sub-Recipient and the respective Vendor. Contracts must, at a minimum, specify the cost, timeline and scope of service. A copy of all professional service contracts must be submitted to the City prior to reimbursement request. Proof of Insurance — Evidence of appropriate and required insurance must be submitted prior to contract execution. No City funds will be dispersed prior to submission of required insurance coverage. Retainage — All capital projects are subject to the withholding of 10 percent of appropriate expenses in the form of a retainage. All retained funds will be released when the project fulfills its National Objective. Section 3 Compliance — Any Agreement greater than $200,000 that involves rehabilitation, housing construction, or other public construction, requires that Sub- Recipient to complete and submit to the City Form HUD 60002, Section 3 Summary Report, Economic Opportunities for Low- and Very-Low Income Persons (OMB No. 2529-0043). Service Deliverables Services must be delivered as follows: Service Unit of • • Provision of 1 610 Espanola Way 10/1/13—9/30/14 improvements to the Miami Beach Senior Adult Day Care Center. Service Benchmarks Service Beinchmark(s) Provision of improvements to Certificate of Occupancy and Final Building the Miami Beach Senior Adult Inspection Day Care Center 2 Service Documentation Services will be deemed as provided when the following documentation is provided within the noted timeframes: Documentation Submission Deadline Provision of G702 Application & Certification for Payment Monthly improvements to Building Permit the Miami Beach Certified Payroll Senior Adult Day Cancelled checks Care Center Invoices from Subcontractors Applicable Federal Regulations The Sub-Recipient must apply to all applicable federal regulations including: I. Non-Discrimination and Equal Access No person in the United States shall on the grounds of race, color, national origin, religion or sex be excluded, denied benefits or subjected to discrimination under any program funded in whole or in part by CDBG funds. The Provider must take measures to ensure non-discriminatory treatment, outreach and access to program resources. This applies to employment and contracting, as well as to marketing and selection of program participants. Fair Housing and Equal Opportunity The Provider must comply with all the following Federal laws, executive orders and regulations pertaining to fair housing and equal opportunity. They are summarized below: Title Vl of the Civil Rights Act of 1964, As Amended (42 USC 2000d et seq.): States that no person may be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity receiving Federal financial assistance on the basis of race color or national origin. The regulations 9 implementing the Title VI Civil Rights Act provisions for HUD programs may be found in 24 CFR Part 1. The Fair Housing Act (42 USC 3601-3620): Prohibits discrimination in the sale or rental of housing, the financing of housing or the provision of brokerage services against any person on the basis of race, color, religion, sex, national origin, handicap of familial status. Fair Housing Act implementing regulations may be found in 24 CFR Part 100-115. Equal Opportunity in Housing (Executive Order 11063, as amended by Executive Order 12259): Prohibits discrimination against individuals on the basis of race, color, religion, sex or national origin in the sale, rental, leasing or other disposition of residential property, or in the use or occupancy of housing assisted with Federal funds. Equal Opportunity in Housing regulations may be found in 24 CFR Part 107. 3 Age Discrimination Act of 1975, As Amended (42 USC 6101): Prohibits age discrimination in programs receiving Federal financial assistance. Age Discrimination Act regulations may be found in 24 CFR Part 146. Section 109 of Title 1 of the Housing and Community Development Act of 1974: Requires that no person shall be excluded from participation in, denied the benefits of, or be subjected to discrimination under any program or activity funded with CDBG funds on the basis of race, color, religion, national origin or sex. Affirmative Marketing The Provider must adopt affirmative marketing procedures and requirements for all CDBG-assisted housing with five or more units. Requirements and procedures must include: 1. Methods for informing the public, owners and potential tenants about fair housing laws and the Provider's policies (for example: use of the Fair Housing logo or equal opportunity language); 2. A description of what owners and/or the Provider will do to affirmatively market housing assisted with CDBG funds; 3. A description of what owners and/or the Provider will do to inform persons not likely to apply for housing without special outreach; 4. Maintenance of records to document actions taken to affirmatively market CDBG-assisted units and to assess marketing effectiveness; and 5. A description of how efforts will be assessed and what corrective actions will be taken where requirements are not met. Handicapped Accessibility The CDBG regulations also require adherence to the three following regulations governing the accessibility of Federally assisted buildings, facilities and programs. Americans with Disabilities Act (42 USC 12131; 47 USC 155, 201, 218 and 225): Provides comprehensive civil rights to individuals with disabilities in the areas of employment, public accommodations, state and local government services and telecommunications. The Act, also referred to as the ADA, also states that discrimination includes the failure to design and construct facilities (built for first occupancy after January 26, 1993) that are accessible to and usable by persons with disabilities. The ADA also requires the removal of architectural and communication barriers that are structural in nature in existing facilities. Removal must be readily achievable, easily accomplishable and able to be carried out without much difficulty or expense. Fair Housing Act: Multi-family dwellings must also meet the design and construction requirements at 24 CFR 100.205, which implement the Fair Housing Act (42 USC 3601-19) Section 504: Section 504 of the Rehabilitation Act of 1973 prohibits discrimination in federally assisted programs on the basis of handicap. Section 4 504 impose requirements to ensure that "qualified individuals with handicaps" have access to programs and activities that receive Federal funds. Under Section 504, recipients and Sub-Recipients are not required to take actions that create unique financial and administrative burdens or after the fundamental nature of the program. For any Provider principally involved in housing or social services, all of the activities of the agency -- not only those directly receiving Federal assistance -- are covered under Section 504. Contractors or vendors are subject to Section 504 requirements only in the work they do on behalf of the Provider or the City. The ultimate beneficiary of the Federal assistance is not subject to Section 504 requirements. The Architectural Barriers Act of 1968 (42 USC 4151-4157): Requires certain Federal and Federally-funded buildings and other facilities to be designed, constructed or altered in accordance with standards that ensure accessibility to, and use by, physically handicapped people. II. Employment and Contracting The Provider must comply with the regulations below governing employment and contracting opportunities. These concern equal opportunity, labor requirements and contracting/procurement procedures. Equal Opportunity The Provider must comply with the following regulations that ensure equal opportunity for employment and contracting: Equal Employment Opportunity, Executive Order 11246, as amended: Prohibits discrimination against any employee or applicant for employment because of race, color, religion, sex or national origin. Provisions to effectuate this prohibition must be included in all construction contracts exceeding $10,000. Implementing regulations may be found at 41 CFR Part 60. Section 3 of the Housing and Urban Development Act of 1968: Requires that, to the greatest extent feasible, opportunities for training and employment arising from CDBG funds will be provided to low-income persons residing in the program service area. Also, to the greatest extent feasible, contracts for work (all types) to be performed in connection with CDBG will be awarded to business concerns that are located in or owned by persons residing in the program service area. Minority/Women's Business Enterprise: Under Executive Orders 11625, 12432 and 12138, the City and the Provider must prescribe procedures acceptable to HUD for a minority outreach program to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, in all contracts (see 24 CFR 85.36(e)). Labor Requirements The Provider must comply with certain regulations on wage and labor standards. In the case of Davis-Bacon and the Contract Work Hours and Safety Standards Acts, every contract for construction (in the case of residential construction, projects with eight or more units) triggers the requirements. 5 Davis-Bacon and Related Acts (40 USC 276(A)-7): Ensures that mechanics and laborers employed in construction work under Federally-assisted contracts are paid wages and fringe benefits equal to those that prevail in the locality where the work is performed. This act also provides for the withholding of funds to ensure compliance, and excludes from the wage requirements apprentices enrolled in bona fide apprenticeship programs. Contract Work Hours and Safety Standards Act, as amended (40 USC 327-333): Provides that mechanics and laborers employed on Federally-assisted construction jobs are paid time and one-half for work in excess of 40 hours per week, and provides for the payment of liquidated damages where violations occur. This act also addresses safe and healthy working conditions. Copeland (Anti-Kickback) Act (40 USC 276c): Governs the deductions from paychecks that are allowable. Makes it a criminal offense to induce anyone employed on a Federally assisted project to relinquish any compensation to which he/she is entitled, and requires all contractors to submit weekly payrolls and statements of compliance. Fair Labor Standards Act of 1938, As Amended (29 USC 201, et. seq.): Establishes the basic minimum wage for all work and requires the payment of overtime at the rate of at least time and one-half. It also requires the payment of wages for the entire time that an employee is required or permitted to work, and establishes child labor standards. Contracting and Procurement Practices The CDBG program is subject to certain Federal procurement rules. In addition, the City and the Provider must take measures to avoid hiring debarred or suspended contractors or Sub-Recipients and conflict-of-interest situations. Each is briefly discussed below. Procurement: For the City, the procurement standards of 24 CFR 85.36 apply. For non-profit organizations receiving CDBG funds, the procurement requirements at 24 CFR Part 84 apply. Conflict of Interest: The CDBG regulations require grantees (the City), state recipients and Sub-Recipients (the Provider) to comply with two different sets of conflict-of-interest provisions. The first set of provisions comes from 24 CFR Parts 84 and 85. The second, which applies only in cases not covered by 24 CFR Parts 84 and 85, is set forth in the CDBG regulations. Both sets of requirements are discussed below. - The provisions at 24 CFR 85.36 and 24 CFR 84.42 apply in the procurement of property and services by grantees (the City), state recipients, and Sub-Recipients (the Provider). These regulations require the City and the Provider to maintain written standards governing the performance of their employees engaged in awarding and administering contracts. At a minimum, these standards must: 6 Require that no employee, officer, agent of the City or the Provider shall participate in the selection, award or administration of a contract supported by CDBG if a conflict-of-interest, either real or apparent, would be involved; - Require that employees, officers and agents of the City or the Provider not accept gratuities, favors or anything of monetary value from contractors, potential contractors or parties to Sub-Agreements; and Stipulate provisions for penalties, sanctions or other disciplinary actions for violations of standards. HOME-funded projects must comply with 24 CFR 92.356. A conflict would arise when any of the following has a financial or other interest in a firm selected for an award: - An employee, agent or officer of the City or the Provider; - Any member of an employee's, agent's or officer's immediate family; An employee's, agent's or officer's partner; or An organization that employs or is about to employ an employee, agent or officer of the City or the Provider. The CDBG regulations at 24 CFR 570.611 governing conflict-of-interest apply in cases not covered by 24 CFR 85.36 and 24 CFR 84.42. These provisions cover employees, agents, consultants, officers and elected or appointed officials of the grantee (the City), state recipient or subrecipient (the Provider). The regulations state that no person covered who exercises or has exercised any functions or responsibilities with respect to CDBG activities or who is in a position to participate in decisions or gain inside information: May obtain a financial interest or benefit from a CDBG activity; or - Have an interest in any contract, subcontract or agreement for themselves or for persons with business or family ties. This requirement applies to covered persons during their tenure and for one year after leaving the grantee (the City), the state recipient or Sub-Recipient (the Provider) entity. Upon written request, exceptions to both sets of provisions may be granted by HUD on a case-by-case only after the City has: - Disclosed the full nature of the conflict and submitted proof that the disclosure has been made public; and - Provided a legal opinion from the City stating that there would be no violation of state or local law if the exception were granted. 7 Debarred contractors: In accordance with 24 CFR Part 5, CDBG funds may not be used to directly or indirectly employ, award contracts to or otherwise engage the services of any contractor or Sub-Recipient during any period of debarment, suspension or placement of ineligibility status. The City should check all contractors, subcontractors, lower-tier contractors or Sub-Recipients against the Federal publication that lists debarred, suspended and ineligible contractors. III. Environmental Requirements The City is responsible for meeting a number of environmental requirements, including environmental reviews, flood insurance, and site and neighborhood standards. Environmental Review The City is responsible for undertaking environmental reviews in accordance with the requirements imposed on "recipients" in 24 CFR 58. Reviews must be completed, and Requests for Release of Funds (RROF) submitted to HUD before CDBG funds are committed for non-exempt activities. Private citizens and organizations may object to the release of funds for CDBG projects on certain procedural grounds relating to environmental review (see 24 CFR 58.70 - 58.77). To avoid challenges, grantees (the City) and Sub-Recipients (the Provider) should be diligent about meeting procedural requirements. Flood Insurance Section 202 of the Flood Disaster Protection Act of 1973 (42 USC 4106): Requires that CDBG funds shall not be provided to an area that has been identified by the Federal Emergency Management Agency (FEMA) as having special flood hazard, unless: The community is participating in the National Flood Insurance Program, or it has been less than a year since the community was designated as having special flood hazards; and Flood insurance is obtained. IV. Lead-based Paint On September 15, 1999, the "Requirements for, Notification, Evaluation and Reduction of Lead-Based Paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance; Final Rule" was published within title 24 of the Code of Federal Regulations as part 35 (24 CFR 35). The regulation was issued under sections 1012 and 1013 of the Residential Lead-Based Paint Hazard Reduction Act of 1992, which is Title X (ten) of the Housing and Community Development Act of 1992. Sections 1012 and 1013 of Title X amended the Lead- Based Paint Poisoning Prevention Act of 1971, which is the basic law covering lead- based paint in federally associated housing. The regulation sets hazard reduction requirements that give much greater emphasis to reducing lead in house dust. Scientific research has found that exposure to lead in dust is the most common way young children become lead poisoned. Therefore, the new regulation requires dust testing after paint is disturbed to make sure the home is lead-safe. Specific requirements depend on whether the housing is being disposed of or assisted by the federal government, and also on the type and amount of 8 f financial assistance, the age of the structure, and whether the dwelling is rental or owner occupied. On April 22, 2008, the EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning to protect against the hazards created by exposure to lead dust in existing structures built prior to 1978. Under the rule, all contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination. This rule (40 CFR Part 745) is enforced as of April 22, 2010. The rule must be executed by all sub-contractors. Property Exempt from Lead-based paint regulation: • Housing built since January 1, 1978, when lead paint was banned for residential use; • Housing exclusively for the elderly or people with disabilities, unless a child under age 6 is expected to reside there; • Zero-bedroom dwellings, including efficiency apartments, single-room occupancy housing, dormitories or military barracks; • Property that has been found to be free of lead-based paint by a certified lead-based paint inspector; Property where all lead-based paint has been removed; • Unoccupied housing that will remain vacant until demolished; • Non-Residential property; and • Any rehabilitation or housing improvement that does not disturb a painted surface. Types of housing subject to 24 CFR 35: • Federally-Owned housing being sold; • Housing receiving a federal subsidy that is associated with the property, rather than with the occupants (project-based assistance); • Public housing; • Housing occupied by a family (with a child) receiving tenant-based subsidy (such as a voucher or certificate); • Multifamily housing for which mortgage insurance is being sought; and • Housing receiving federal assistance for rehabilitation, reducing homelessness, and other special needs. If you want copies of the regulation or have general questions, you can call the National Lead Information Center at (800) 424-LEAD, or TDD (800) 526-5456 for the hearing impaired. You can also download the regulation and other educational materials at httg://www.hud.gov/offices/lead/index.cfm. For further information, you may call HUD at (202) 755-1785, ext. 104, or e-mail HUD at lead regulations -hud.gov. 9 V. Displacement, Relocation, Acquisition and Replacement of Housing CDBG projects involving acquisition, rehabilitation or demolition may be subject to the provisions of the Uniform Relocation Act (UDA). Demolition or conversion of units with CDBG funds may trigger section 104 (d) (also known as the "Barney Frank Amendment" requirements.) VI. Compliance with National Objective The Provider will ensure and maintain evidence that activities assisted with CDBG funds from the City of Miami Beach comply with the primary National Objective, "Benefit to Low and Moderate Income Persons" and will provide services or activities that benefit at least 51% low and moderate income persons. A low or moderate- income household is defined as: a household having an income equal to or less than the limits cited below. Individuals who are unrelated but are sharing the same household shall each be considered as one-person households. Low and Moderate Household Income Limits (Effective 05/14/2012) (Source: U.S. Department of Housing & Urban Development) (Note: Low-Income (80% of Median Income), Very Low-Income (50 % of Median Income), Extremely Low (30% of Median Income) HUD Income Limits for FY 2013 t' , $13,750 $15,700 $17,650 $19,600 $21,200 $22,750 $24,350 $25,900 $22,900 $26,200 $29,450 $32,700 $35,350 $37,950 $40,550 $43,200 • •o' $27,480 $31, 440 $35,340 $39,240 $42,420 $45,540 $48,660 $51,840 • $36,650 $41,850 $47,100 $52,300 $56,500 $60,700 $64,900 $69,050 Change Orders/Budget Amendments The goal should be to limit the use of Change Orders or Budget Amendments. Change Orders and Budget Amendments require prior written approval by the City Manager. To request a Change Order or Budget Amendment, a written request for changes must be submitted to your Grant Monitor delineating the changes and providing a detailed justification for making the request. Approvals of any changes are at the sole discretion of the City Manager. No budget amendment will be processed after June 30, 2014 for Public Service Projects. No budget amendment will be processed for Capital Projects Budgets after eighty (80) percent of the available funds have been drawn. 10 Budget amendments or Change Orders that deviate from the original scope will be rejected and the funds in question may be subject to recapture at the sole discretion of the City Manager. Compliance with Local Rules, Regulations, Ordinances and Laws The Sub-Recipient must remain incompliance with all local rules, regulations, ordinances and laws (including having an active business license) in addition to those specified in the body of the Agreement. In addition, the Sub-Recipient must not owe any monies to the City at the time of Agreement execution or final release of grant funds. The City will verify with the Finance Department to ensure that no monies are due the City prior to Agreement execution. Employee/ Contractor File Review The following documentation must be included in the Sub-Recipient's employee/contractor file for those employees/contractors providing services under this contract. The following must be included in the employee files: • Employment Application • Evidence of degree/credentials • Job Description Signed by Employee • Evidence of Required Experience • Florida Background Criminal Screening, if applicable • National FBI Background Criminal Screening (Level 2), if applicable • Affidavit of Good Moral Character, if applicable • Proof of Knowledge of Policies & Procedures, if applicable • 1-9 Verification on File The City reserves the right to inspect those employee/contractor files whose salaries are funded in part or in whole by its funds. Evaluation In its continuing effort to ensure contract compliance and performance, the City will evaluate the Sub-Recipient in its fulfillment of the terms of this agreement including, but not limited to, the following measures: • Agreement compliance • Leverage and fiscal soundness • Accuracy and timeliness of Monthly Progress Reports • Accuracy and timeliness of Monthly Financial Reports 11 • Adherence to project timelines • Fulfillment of prescribed outcomes Fiscal Stability The Sub-Recipient is required to maintain fiscal stability throughout the terms of this Agreement. This is to ensure the Sub-Recipient's ability to fulfill the terms of this Agreement and meeting of the National Objective. For affordable housing developers, fiscal stability policies are encouraged in anticipation of additional HUD guidance regarding fiscal oversight for rental projects. More so, as projects have extended lives, fiscal stability underscores the long-term viability of the housing units. Leverage For HOME-funded projects, the Sub-Recipient must demonstrate the commitment of other sources of funds committed to the City-funded project. Furthermore, all other identified funds must be in place prior to the use of HOME funds. The documentation that demonstrates this fiscal leverage is the Subsidy Layering Review and underwriting. Monitoring & Performance Reviews The City reserves the right to inspect, monitor and/or audit the Sub-Recipient to ensure contractual compliance. This includes, but is not limited to: Review of on-site service delivery • Inspection and review of client, budgetary and employee files (for those employees providing services under this Agreement) Monitoring visits will take place within 120 days of the commencement of services. The City will notify the Sub-Recipient a minimum of three (3) business days prior to a monitoring visit. Performance Ratings The Sub-Recipient agrees that its Performance Rating, the score awarded for performance on the following measures, will be posted on the City's website on an annual basis: • Timely and accurate submission of Monthly Progress Report • Timely and accurate submissions of Monthly Financial Reports (reimbursement requests) • Delivery of contracted service units 12 Ratings will be given for each performance measure based on the following: e 0 0 0 • Store Timely and accurate submission of ➢ "0" for failing to submit on time Monthly Progress Report ➢ "25" for submitting on time Timely and accurate submissions of ➢ "0" for failing to submit accurate report Monthly Financial Report with back-up material on time (reimbursement requests) ➢ "25" for submitting accurate report on time Delivery of contracted service units Possible score of 0 to 50 based upon within contracted timeframe completion of projected service units. Score is pro-rated if total projected service units are not met. Proformas Capital projects must submit certified monthly proformas that indicate project funding sources and correlating uses. Proformas must be certified by the preparing party as well as the agency's signatory as reflected within this Agreement. Reporting Requirements The Contractor will provide the City with a Monthly Progress Report and Monthly Financial Report by the 10th of the following month. In the event that the 10th of the month lands on a Saturday, Sunday or holiday, the report must be submitted the following business day. The following chart depicts the submission dates for the term of this Agreement: Month, D. - • • • October 2013 November 12, 2013 i November 2013 December 10, 2013 December 2013 January 10, 2014 January 2014 February 10, 2014 February 2014 March 10, 2014 March 2014 April 10, 2014 April 2014 May 12, 2014 May 2014 June 10, 2014 June 2014 July 10, 2014 July 2014 August 11, 2014 August 2014 September 10, 2014 September 2014 October 10, 2014 13 Monthly reports will be submitted via any of the following methods: • Standard mail • Hand delivery Monthly reports will not be considered acceptable unless the following is met: • Forms are completely and accurately filled Necessary back-up materials are included (evidence of expense incurred, invoices, time logs, executed AIA Forms, etc.) • Reports bear the signature of the person preparing the report and the Sub- Recipient's authorized signatory Monthly Progress Reports should encapsulate a project's progress in alignment with the funds expended. Rent Roll Submissions Sub-Recipients using City funds for the creation or rehabilitation of affordable housing must submit tenant rent rolls within thirty (30) days of meeting the National Objective and every year thereafter for a minimum of fifteen (15) years in adherence with the affordability period required with use of these funds. For completed projects, certified tenant rolls must be submitted annually by November 1St. . Tenant rolls must be certified by the Sub-Recipient Agency's authorized signatory. Those projects with a longer affordability period require annual tenant rolls for the period of affordability established in the City's Restrictive Covenant and/or mortgage. These tenant rolls must be submitted by November 1 St of each year of affordability. Tenant rolls must be certified by the Sub-Recipient Agency's authorized signatory. Retainage All capital projects utilizing HUD funds are subject to a ten (10) percent retainage that will not be released until the National Objective is met. Retainage will be held as appropriate from all submitted reimbursement requests. Subsidy Layering Review All affordable housing projects using CDBG/HOME funds require the completion of an independent Subsidy Layering Review and underwriting. These reviews must be completed prior to the project being submitted via HUD's IDIS system and precedes the incurrence of any related funds. Therefore, no capital projects will be deemed eligible for reimbursement until the Subsidy Layering Review and underwriting have been received and accepted by the City. The expense for the Subsidy Layering Review and underwriting services are eligible for reimbursement if the project proceeds but is not eligible for reimbursement otherwise. 14 Timeliness of Reimbursement Requests Reimbursement requests must be submitted no later than sixty (60) days from the incurrence of the expense. The City will strictly monitor this element. Please note that cancelled checks must be submitted in conjunction with all reimbursement requests. Therefore, the Sub-Recipient should calendar itself accordingly to ensure that reimbursement requests are submitted to the City in a timely manner. Training Requirements The Sub-Recipient must ensure that the person responsible for preparing the Monthly Progress Report and Monthly Financial Report attends the City's Sub-Recipient Reporting Training and places the attendance certificate in the employee's personnel file for inspection by the City during its monitoring visit. Additional Documentation The following documentation must be submitted with this executed agreement: • All required insurance certificates • Copy of current audit • Copy of required business licenses and permits 15 i EXHIBIT "B99 "DOCUMENTATION 99 The Sub-Recipient agrees to provide the following documents as part of its reporting requirements: To Document Insurance Coverage: • Copy of insurance policy or binder (with proof of payment) with limits and scope of coverage To Document Client Eligibility and Service: • Client attendance logs • Intake and screening forms • Executed client consent agreements To Document Fiscal Leverage: • Monthly project proformas (for capital projects only) To Document Procurement: • Evidence of at least three (3) quotes obtained for service/item Formal bid process including advertisement, scope, respondents and scoring To Document Expenses Incurred: • Cancelled checks with copy of referenced invoice • Electronic payroll ledgers with corresponding bank transactions (statement) • Executed professional service agreements (subject to procurement) • Executed and notarized AIA Forms (for capital projects only) • Executed and Filed Release of Lien (for capital projects only) • Copies of valid work permits ad clearances (for capital projects only) To Document Construction Completion: • Certificate of Occupancy (CO) To Document Lease-up of Affordable Housing: • Rent rolls • Tenant applications (with proof of income) i 16 DATE(MMIDD/YYYY) ACORU CERTIFICATE OF LIABILITY INSURANCE 10/14/2013 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the pollCy(ies)must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsemen s. A PRODUCER NAME: Cathleen F@tzpatr*ck Frank Crystal&Co., Inc. PHC N _ _ A/C No): - - dba Crystal&Company E-MAIL Financial Square, 32 Old Slip ADDREss:cath lee n.fitzpatricke-crysta New York NY 10005 INSURERISI AFFORDING COVERAGE NAIC# INSURER A:Bridgefield Employers Com 10701 INSURED GREAMI INSURER B Arch Insurance Company 11150 Jewish Community Services of So. FL. Inc. INSURER C: c/o Greater Miami Jewish Federation, Inc. INSURER D: Attn: Mike Scheinblum-4200 Biscayne Blvd. Miami FL 33137 INSURER E INSURER F COVERAGES CERTIFICATE NUMBER:481771776 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED:NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDLSUBR POLICY EFF POLICY EXP LIMITS LTR TYPE OF INSURANCE IN SR WVD POLICY NUMBER IMMIDDIYYYYI (MMIDDIYYYYI B GENERAL LIABILITY NCPKGO062105 /30/2013 /30/2014 EACH OCCURRENCE $1,000,000 X DAMAGE TO RENTED COMMERCIAL GENERAL LIABILITY PREMISES Ea o urrencei $500,000 CLAIMS-MADE 15F]OCCUR MED EXP(Any one person) $20,000 PERSONAL&AD INJURY $1,000,000 GENERAL AGGREGATE $3,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS-COMP/OP AGG $3,000,000 POLICY PRO- LOC $ B AUTOMOBILE LIABILITY NCAUT0062105 /30/2013 /30/2014 Ea accident) $1,000,000 X ANY AUTO BODILY INJURY(Per person) $ X ALL OWNED X SCHEDULED BODILY INJURY(Per accident) $ AUTOS AUTOS PROPERTY DAMAGE NON-OWNED Per accident $ X HIRED AUTOS X AUTOS $ B X UMBRELLA LIAB OCCUR NCFXS0062100 /30/2013 /30/2014 EACH OCCURRENCE $10,000,000 EXCESS LIAB CLAIMS-MADE AGGREGATE $ 'DED X RETENTION$10,000 $ A WORKERS COMPENSATION BEIC083050558 /1/2013 /1/2014 X TORY L STATU OTH- AND EMPLOYERS'LIABILITY ANY PROPRIETORIPARTNER/EXECUTIVE YNIA E.L.EACH ACCIDENT $1,000,000 OFFICER/MEMBER EXCLUDED? (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE $1,000,000 If yes,describe under E.L.DISEASE-POLICY LIMIT $1,000,000 DESCRIPTION OF OPERATIONS below B Professional Liability NCPKGO062105 /30/2013 /30/2014 $1,000,000 Each Prof. Incident DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES(Attach ACORD 101,Additional Remarks Schedule,If more space Is required) Re: 833 6th Street, Miami.Beach, FL 33139. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City of Miami Beach ACCORDANCE WITH THE POLICY PROVISIONS. Office of Real Estate, Housing and Community Development AUTHORIZED REPRESENTATIVE Attention:.Dirnorah Rosario, Community Development Coordinator,555 17th Street 9L Miami Beach, FL 33139 ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(2010/05) The ACORD name and logo are registered marks of ACORD 7 ® DATE(MM/DD/YYYY) A�° EVIDENCE OF PROPERTY INSURANCE 10/14/2013 THIS EVIDENCE OF PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE ADDITIONAL INTEREST. AGENCY M 212-504-5948 COMPANY Frank Crystal & Co., Inc. Beazley Insurance Company, Inc. dba Crystal & Company 30 Batterson Park Road Financial Square, 32 Old Slip Farmington CT 06032 New York NY 10005 FAAX No)?12-504-5989 E-MAIL ADDRESS: cathleen.fitzpatrick @crystalc CODE: SUB CODE: CUSTOMER D ;GREAMI INSURED LOAN NUMBER POLICY NUMBER Jewish Community Services of South Florida, Inc. PU101550c c/o Greater Miami Jewish Federation Attn: Michael Scheinblum - 4200 Biscayne Boulevard EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL Miami, FL. 33137 5/15/2013 5/15/2014 TERMINATED IF CHECKED THIS REPLACES PRIOR EVIDENCE DATED: PROPERTY INFORMATION LOCATION/DESCRIPTION Re: 833 6th Street, Miami Beach, FL 33139. THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE All Risk of Direct Physical Loss or Damage $28,000 $10,000 Subject to the Policy Terms, Conditions & Exclusions Valuation: Replacement Cost for Building and/or Personal Property Actual Loss Sustained for Business Income _J REMARKS(including Special Conditions CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. ADDITIONAL INTEREST NAME AND ADDRESS MORTGAGEE ADDITIONAL INSURED —d LOSS PAYEE City of Miami Beach LOAN# Office of Real Estate, Housing and Community Development Attention: Dirnorah Rosario, Community AUTHORIZED REPRESENTATIVE Development Coordinator 555 17th Street �' Miami Beach, FL 33139 ACORD 27(2009/12) ©1993-2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD i STATE OF FLORIDA .DERARLMENt..OI^ F�l4LTH ' :S,ani#a 06 Certificate 13-48-1116-576 13-BID-231797 Food Hygielne.-ddult Day_:; Issued To: Miami Beach Day' fCir Frail`EIdeciy(Kagan,Joyce) County Dade 610 Apa, a__Wa� Amount Paid:$250.00 Miami Beath,.FL 33139 Date Paid:08/29/2013 Permit Expires On:-0.9130/2014 Mail To: Y Kagan(Miami Beach Day.Care for Frail Elderly) 61.0-Espanola Way Issued:8y: Mi2Il'1ii;Beach,FL 331.3.9 Department of Health in Dade'Cou�ty. 1725 NW 167 Street Maml,FL 33056 (305)623-3500" Owner Jewish'Community Services of Soutn Florida.(Kagan,Joyce) Food Type:Limited Ser vice Seating Capacity.(M* 0 iFteslrlCted by Sewage Dlspotal Type:i Operation Type:,Main ration Food Hynlaie`ai�trlctions,(if aoalicable) Original Customer.Miami Beach Day Care for Frail Elderty(Kagan,Joyce)(NON-TRANSFERABLE) DISPLAY CERTIFICATE IN A CONSPICUOUS PLACE �% •�fi � 7 •�T i C• 4��i'~ .• ••.'r•�•••• 4�i3' �i•• �i "i+•iii• :ii'�Oa��i.•� ••ii'61:•�i i=i•�1•L•i:i.!•��. 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S} @ lLte .ea. :••e4 1.le.e. . •. ♦r .� �� J a•� :ti. `L.~.t✓; L`F J. 4+.. 1 � � .t•�i S � �.�✓O C�.��J t �4.•• ..• i. •�� ll� •� � �•. f �+�1 Z�� •C ! SL l^ J �:_!� �✓,y�0�\`i1`��fjl�.��G��.�ti�r% 04119/2013 15:32 1 0 FICE MAIN PAGE 81/01 nriA7lli Yht�it I:t4EL'i�,L`96�Y idPll�AP14@7aL 59300 N.W.41"3trvt DOW.Pf,33 178 D'OML Ploridt=3178.2414 4�zckwe evvy ZJ T 305 40-1400 w.wIt wide#4A v t 2013 uetter of Appromav Mardh 01.3013 MIAMI BEACH SMNIOR CENTER AN13 DAY CARE 610 Espanola W*fir Miami Beaoh,K 33139 Dear facility Administrator. I am pleased to advise yoz that the(tuna rahcuive pow8eney M emcrt Plan>lpdate you "blitzed, m t$The stet a estublished by the State of Florida Agway bor eolth Cue rWnfat ion aad is approyW for tho oumnt year by the Miami-made county of'lice of Em 3'Managelrrexlt. We awed ate the time and effat spit on this plen, CcMVrChCTWv a Emargenq M agamew Plans are approved on so anvtlgl basis. This upolato was approved on 03/0112013. Ymr f iiity M11 be advalsed as to when your plan must be submitted to our of rice for its Wmal review. If tl>we are any key suffer or other YnAl�r rhanges in your facility durLlg the course of me year,, you mum contact us regarding.those changes as soon as pOs$iblL-. We e nccvl a you to review your plan on a regular basis and make adjustments ami improvements 9a that your facility vlrlli be as prelraCed as possible when an eamergancy situation arises. hank you for your oomtribu#ion to the safety and well-being of the neddcnts 4F MiarraiyDzds County. Sincerely, Curtis SommerhofP Chi actor 4.19.2013 1000 JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC. AND AFFILIATE CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2012 AND 2011 AFZ MORRIS.ON BROI./\7N ARGIZ &'FARRA,LLC CERTIHtD PUBLIC ACCOUNTANTS AND ADVISORS JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE TABLE OF CONTENTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1 -2 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Position 3 Consolidated Statements of Activities 4-5 Consolidated Statements of Cash Flows 6 Consolidated Statements of Functional Expenses 7-8 Notes to Consolidated Financial Statements 9-20 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 21 Schedule of Expenditures of Federal Awards 22-23 Notes to Schedule of Expenditures of Federal Awards 24 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 25-26 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 27-28 SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL PROGRAMS 29-30 SUPPLEMENTARY SCHEDULES 31 Consolidating Schedules of Financial Position 32-33 Consolidating Schedules of Activities 34-35 Schedule of Revenues and Expenses Related to Grants From the Conference on Jewish Material Claims Against Germany 36 10RR1SW B9QN ARG1 &EA,RRA.FLU cE nFiMAXUc ACCOUNTANTS AND;OV RS. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors Jewish Community Services of South Florida, Inc. and Affiliate We have audited the accompanying consolidated statements of financial position of Jewish Community Services of South Florida, Inc. and Affiliate ("JCS") as of June 30, 2012 and 2011 and the related statements of activities, cash flows, and functional expenses for the years then ended. These consolidated financial statements are the responsibility of JCS's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of JCS as of June 30, 2012 and 2011 and the changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2012 on our consideration of JCS's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audits. Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations, and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. An Independent Member of Baker Tilly International MIAMI 1001 Brickell Bay Drive,9th Floor;Miami FL 33131 T 305 373 5500 F 305 373 0056 www.mbafcpa.com FORT LAUDERDALE 301 East Las Olas Boulevard,41'Floor,Fort Lauderdale:FL 333011 T 954 760 9000 F 954 760 4465 To the Board of Directors Jewish Community Services of South Florida, Inc. and Affiliate Page Two Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The supplementary information on pages 31-36 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements.Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves,and other additional procedures in accordance with auditing standards generally accepted in the United States of America.In our opinion,the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. Fort Lauderdale, Florida December 5, 2012 JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION JUNE 30, ASSETS 2012 2011 Cash and cash equivalents $ 81,791 $ 96,671 Board or donor restricted cash 212,124 833,699 Federal, state and municipal grants and contracts receivable 1,841,145 1,122,231 Service and other receivables, net 281,209 191,983 Contribution receivable-Greater Miami Jewish Federation, Inc. 2,293,214 2,548,942 Prepaid expenses and other assets 268,096 314,582 Investments 966,558 732,012 Pledges receivable, net 90,546 188,318 Property and equipment, net 706,974 678,221 $ 6,741,657 $ 6,706,659 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued liabilities $ 1,415,356 $ 1,357,236 Advances from granting agencies 127,779 293,020 Line of credit 950,000 1,000,000 Advances from Greater Miami Jewish Federation, Inc., net 1,201,060 1,238,066 Mortgage payable 836,219 866,979 TOTAL LIABILITIES 4,530,414 4,755,301 NET ASSETS(DEFICIT) Unrestricted (2,059,297) (2,693,689) Temporarily restricted 3,088,182 3,462,689 Permanently restricted 1,182,358 1,182,358 TOTAL NET ASSETS 2,211,243 1,951,358 TOTAL LIABILITIES AND NET ASSETS $ 6,741,657 $ 6,706,659 i The accompanying notes are an integral part of these consolidated financial statements. -3- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATED STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2012 Temporarily Permanently Unrestricted Restricted Restricted Total REVENUES AND OTHER SUPPORT Grants and contracts revenue $ 8,876,005 $ - $ - $ 8,876,005 Contributions 393,191 549,441 - 942,632 Contributions-Greater Miami Jewish Federation, Inc., net - 2,293,214 - 2,293,214 Service and other income 3,446,659 - - 3,446,659 Investment income,net (813) 4,186 - 3,373 Donated facilities 318,185 - - 318,185 Net assets released from restrictions 3,221,348 (3,221,348) - - TOTAL REVENUES AND OTHER SUPPORT 16,254,575 (374,507) - 15,880,068 EXPENSES Program services: Behavioral health 6,093,657 - - 6,093,657 Senior adult 3,572,934 - - 3,572,934 Rehab&employment 2,193,961 - - 2,193,961 Masada 1,008,082 - - 1,008,082 Support services: Fundraising 344,637 - - 344,637 Management and general 2,406,912 - - 2,406,912 TOTAL EXPENSES 15,620,183 - - 15,620,183 CHANGE IN NET ASSETS 634,392 (374,507) - 259,885 NET ASSETS AT BEGINNING OF YEAR (2,693,689) 3,462,689 1,182,358 1,951,358 NET ASSETS AT END OF YEAR $ (2,059,297) $ 3,088,182 $ 1,182,358 $ 2,211,243 The accompanying notes are an integral part of these consolidated financial statements. -4- I JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATED STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2011 Temporarily Permanently Unrestricted Restricted Restricted Total REVENUES AND OTHER SUPPORT Grants and contracts revenue $ 7,797,882 $ - $ - $ 7,797,882 Contributions 315,670 632,676 - 948,346 Contributions-Greater Miami Jewish Federation,Inc.,net - 2,348,303 - 2,348,303 Service and other income 3,593,139 - - 3,593,139 Investment income,net 52,899 11,491 3,504 67,894 Donated facilities 318,176 - - 318,176 Net assets released from restrictions 3,531,790 (3,531,790) - - TOTAL REVENUES AND OTHER SUPPORT 15,609,556 (539,320) 3,504 15,073,740 EXPENSES Program services: Behavioral health 4,981,291 - - 4,981,291 Senior adult 3,939,361 - - 3,939,361 Rehab&employment 2,167,813 - - 2,167,813 Masada 1,394,953 - - 1,394,953 Support services: Fundraising 266,680 - - 266,680 Management and general 2,219,581 - - 2,219,581 TOTAL EXPENSES 14,969,679 - - 14,969,679 CHANGE IN NET ASSETS 639,877 (539,320) 3,504 104,061 NET ASSETS AT BEGINNING OF YEAR (3,333,566) 4,002,009 1,178,854 1,847,297 NET ASSETS AT END OF YEAR $ (2,693,689) $ 3,462,689 $ 1,182,358 $ 1,951,358 The accompanying notes are an integral part of these consolidated financial statements. -5- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 259,885 $ 104,061 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 89,232 86,235 Loss on property and equipment - 83,862 Provision for bad debt expense 51,550 - Change in fair value of interest rate swap agreement 4,803 (18,356) .Unrealized and realized gains on investments, net 15,454 (60,269) Discount on advances from Greater Miami Jewish Federation, Inc. 45,494 (18,021) Decrease(increase)in operating assets: Board or donor restricted cash 621,575 (505,127) Federal, state and municipal grants and contracts receivable (718,914) 66,535 Service and other receivables (89,226) 124,073 Contribution receivable-Greater Miami Jewish Federation, Inc. 255,728 223,382 Prepaid expenses and other assets (5,064) (46,257) Pledges receivable, net 97,772 520,300 (Decrease)increase in operating liabilities: Accounts payable and accrued liabilities 53,317 (601,419) Advances from granting agencies (165,241) 51,414 TOTAL ADJUSTMENTS 256,480 (93,648) NET CASH PROVIDED BY OPERATING ACTIVITIES 516,365 10,413 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (250,000) (153,898) Purchase of property and equipment, net (117,985) (37,923) NET CASH USED IN INVESTING ACTIVITIES (367,985) (191,821) CASH FLOWS FROM FINANCING ACTIVITIES: Net(payments on)proceeds from line of credit (50,000) 2,592 Repayments of mortgage payable (113,260) (30,633) NET CASH USED IN FINANCING ACTIVITIES (163,260) (28,041) NET DECREASE IN CASH AND CASH EQUIVALENTS (14,880) (209,449) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 96,671 306,120 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 81,791 $ 96,671 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for interest $ 84,961 $ 137,913 The accompanying notes are an integral part of these consolidated financial statements. -6- I LO � � (D rqw Kr N U) O � Lo O r ti z U) Lo M r CO N O CD M CD r U') M U) q�r (D CD a) r- CD r 0 CD CA N M CO V N O M m r Co N CM ql;r O CO Cl O O) r CO M CA O I` V 00 � r V (D 00 N O O T- 00 N CD f` 00 LC) O O CD N f- N O r M N O an ti M tt O U7 lqCr O +� U) N M r N ti ti LO r N V N 00 It � CD CO r CD U-) 00 r O) N 0 M CO O C) r r v r M r r r �r r M r CM M V r I` O CO CCT 1 C� M 1 f` ti N W r r r r 6A C Co v N N CO N N CA O Ln M O CD U) O CD r- M N N O N 00 I` LO r 'Cr N ti 00 U) r CO O O N Mt rl- N O r r O r cc CD O O CD CO r LO LO LO r-r O O N O ' ' U') CD 00 O O O 07 O C 06(d ti M r r- N U7 Ln O CD O d• O CO' N M V U6 CO O Cp Co O a) n N LO CO M N N CD N N r O Co M � C r r N N N Ca ad 64 O N O N O O CD r N 00 CO LO LO ti I` ti C I` Co LO O O Co O r � O O M O M M M O Co CO r ' 00 CD ' q ' CD ' ' ' CO ' Co Ca W N M r- Co N N V O V CA m qT qT et 00 r N r N N U7 It 14, !r C r N M CO M Q _ =3 J_ LL 609- 6Fs U- LL Q E O CO to N r CO CV O O r ti 00 Ln N Nr O U) O O C) CD O LO U) N LO M r a) r qT O N 19t 00 00 f- OD M N LO r m 0 Co M U) ti r M 00 M U7 O CO O M U) f` N r N ' ' M LO O CO Q 0 CD r CD �1 CO O fl OO Ni M U- r- C'M CO r Cp O M M V 00 W O M CM Co N CO O N ti m U7 v M M U) U) r CO N 00 r CO Co a m U) I` N r r cr r r r r M M v � CD CO V Z (D o0 C r r r BW N F°- 6f} 6Fs Cl J C) Q N CD LO to O N r V) M V- CD LCD 00 ti r CO Co O 00 CD N Z M O (D r m CO M O O I` P- qw ";r Co f` N m r CO O O p N M ti M C) M M N CD OO N O N 00 CD CO M CA CA O O M N (O N qq LCD N U-i M st• N M O M N q�i 00 LL Zw r CD O ti v OD r N M r m N N r Co Z CQ r r M LO CO CO O _ D Cu N N N N r r LL D LL i N Q 60. 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Cn Cn o c a) `o - c co c 3 c E (o co CD x O U C C cu a) a > O O O w C x � O U C U CO E tv a) ca m a) c o C a) E X CD (v (D o U U CL) >' (v c Q E co = `n m rn a m o ui '~ O to CO c) '� o c c) C O U � •Q-.� Q U V to Co a) V -p N � Cn a) N ca a) iii �.�. (o c�v m E f Q v Cr ° E= Q cco o° Co H o °' °� H cnaw ~ cn SOwCL cn2E-- Ocnw � J Z I JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 1. ORGANIZATION Jewish Community Services of South Florida,Inc.and Affiliate("JCS")is a private,voluntary social agency established to provide various social service activities such as: vocational and social rehabilitation, mental health services, specialized services to the elderly, meal services, financial assistance and refugee resettlement. JCS derives its principal revenue and support from government grants, contracts and allocations from the Greater Miami Jewish Federation, Inc.("GMJF")which also includes a United Way allocation and program services. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of Jewish Community Services of South Florida, Inc.and its affiliate, Masada Home Care, Inc. ("Masada"),which are under common control.All intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements. The consolidated financial statements are prepared using the accrual basis of accounting. Net assets,revenue,gains and losses are classified into three classes of net assets based on the existence or absence of donor-imposed restrictions. The three net asset categories are reflected in the accompanying consolidated financial statements as follows: Unrestricted—Net assets which are free of donor-imposed restrictions;all revenues,gains,and losses that are not changes in temporarily restricted or permanently restricted net assets. Temporarily Restricted—Net assets where the use by JCS is limited by donor-imposed stipulations that either expire by passage of time or that can be fulfilled or removed by actions of JCS pursuant to those stipulations. Permanently Restricted—Net assets where the use by JCS is limited by donor-imposed stipulations that neither expire with the passage of time nor can be fulfilled or otherwise removed by actions of JCS. Contributions and Unconditional Promises to Give Contributions received and unconditional promises to give are measured at their fair values and are reported as an increase in net assets.JCS reports gifts of cash and other assets as restricted support if they are received with donor stipulations about the use of the donated assets, or if they are designated as support for future periods. When a donor restriction expires,that is,when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Consolidated Statements of Activities as"Net assets released from restrictions."Donor-restricted contributions whose restrictions are met in the same reporting period in which received are reported as unrestricted support. JCS reports gifts of goods and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used.Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how those long-lived assets must be maintained,JCS reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. Donated Facilities and Services The use of donated facilities is recorded at fair value based on market rates and reflected in the accompanying Consolidated Statements of Activities and Consolidated Statements of Functional Expenses under the captions "Donated facilities." The donated facilities were used to provide food and day care facilities to the elderly. The estimated fair rental value of the donated facilities was approximately$318,000 for the years ended June 30,2012 and 2011. Volunteers have donated time to JCS program services during the year; however, these donated services are not reflected in the consolidated financial statements since the services do not require specialized skills. -9- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Investments JCS investments are held and administered by GMJF. Certain assets are invested in GMJF's pooled investment strategy with investments in a variety of mutual funds,hedge funds,government securities,equities,Israel bonds and other types of investments. Investments in equity securities with readily determinable fair values and all investments in debt securities are measured at fair value in the Consolidated Statements of Financial Position. Investment income or loss(including gains and losses on investments,interests,and dividends)are included in the Consolidated Statements of Activities as increases or decreases in unrestricted net assets unless the income or loss is restricted by donor or law. Cash and Cash Equivalents JCS considers all liquid investments with an original maturity at purchase of three months or less to be cash equivalents. In January 2009,JCS discontinued its commissary operations.The cash outflow during the year ended June 30, 2011 from liabilities associated with these operations are reflected as net decreases in cash and cash equivalents from discontinued operations.There were no cash outflows related to the discontinued operations during the year ended June 30,2012. Board or Donor Restricted Cash Restricted cash consists of cash held in trust for the purpose of making interest bearing loans for the training of young men and women in social work and cash limited in use by the Board,donor or contract imposed restrictions. Grants Receivables and Revenue JCS receives a significant portion of its revenues from government grants and contracts.The amounts received under these grants and contracts are designated for specific purposes by the granting agencies.Grant and contract revenue is recognized when the allowable costs as defined by the individual grants or contracts are incurred and/or the unit of service has been performed.JCS records advances at the start of each grant as a liability. Revenues and expenses, which are treated as reciprocal transactions, are recognized as the costs are incurred. Grants and contracts receivables at year end represent expenditures and/or units of service performed,which have not yet been reimbursed by the granting agency. Service and Other Receivables and Revenue Service and other receivables primarily represent amounts due from clients and unaffiliated non-profit agencies for services provided,net of an allowance for doubtful accounts of approximately$23,000 and$25,000 at June 30,2012 and 2011,respectively.Revenue is recognized when the service is provided. Revenues are included in"Service and other income"in the Consolidated Statements of Activities.Management reviews the collectability of receivables and assesses the need for an allowance for doubtful accounts.Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Concentrations of Credit Risk Financial instruments which potentially subject JCS to concentrations of credit risk consist principally of cash and cash equivalents.JCS places its cash and cash equivalents with highly rated financial institutions and,by policy,limits the amount of credit exposure to any one institution. Investments held at GMJF are subject to both credit and market risks.Credit risk is the possibility that a loss may occur from the failure of another party to perform according to the terms of a contract. Market risk is the possibility,that fluctuations in the investment market will impact the value of the portfolio. Additionally, due to the level of risk associated with certain investment securities,it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect GMJF's investment balances and the amounts reported in the Consolidated Statements of Financial Position.GMJF utilizes an investment policy and management oversight,which periodically reviews its investment portfolios to monitor these risks. - 10- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Concentrations of Credit Risk(Continued) JCS receives grants from various sources to supplement its programs.A loss in funding from a major grantor can have a significant negative impact on JCS's operations.Additionally,these grants require the fulfillment of certain conditions set forth in the grant agreement. Failure to fulfill the conditions or failure to continue to fulfill them could result in the return of the funds to the grantors. Property and Equipment, Net Property and equipment are recorded at cost or,if contributed,such assets are recorded at their fair market value at the time of donation.If donors stipulate how long the assets must be used,the contributions are recorded as restricted support. In the absence of such stipulations,contributions are recorded as unrestricted support.JCS's capitalization policy requires individual assets to be capitalized if the original cost or fair value at date of donation exceeds$1,000. Depreciation is provided using the straight-line method over the useful lives of the assets,which are as follows: Building and improvements 10—40 years Furniture,fixtures and equipment 3—7 years Leasehold improvements Shorter of lease term or useful life Computer hardware and software 5—7 years Transportation equipment 7 years Maintenance and repairs are charged to expense when incurred. The carrying value of long-lived assets is reviewed if the facts and circumstances, such as significant declines in revenues,earnings or cash flows or material adverse changes in JCS's climate,indicate that they may be impaired. If any impairment in the value of the long-lived assets is indicated,the carrying value of the long-lived assets is adjusted to reflect such impairment based on the fair value of the impaired assets or an estimate of fair value based on discounted cash flows. Income Taxes JCS recognizes and measures tax positions based on their technical.merit and assesses the likelihood that the positions will be sustained upon examination based on the facts,circumstances and information available at the end of each period. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other non- interest expense,respectively. The U.S.Federal jurisdiction is the major tax jurisdiction where JCS files income tax returns.JCS is generally no longer subject to U.S. Federal examinations by tax authorities for fiscal years before 2009. JCS is a non-profit corporation whose revenue is derived from contributions and other fund raising activities and is not subject to federal or state income taxes. JCS is exempt from Federal income taxes under section 501(c)(3)of the Internal Revenue Code.Masada is a non-profit corporation whose revenue is mainly derived from home health care services and is not subject to federal or state income taxes. Masada is exempt from Federal income taxes under section 501(c)(3)of the Internal Revenue Code. Functional Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the Consolidated Statements of Functional Expenses.Accordingly,certain costs have been allocated among the programs and support services benefited. - 11 - JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) Management Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Derivative Financial Instruments JCS adopted the provision of an accounting standard for utilizing derivative instruments and hedging activities.The standard requires that all derivative financial instruments,such as interest rate swaps contracts and foreign exchange contracts,be recognized in the consolidated financial statements and measured at fair value regardless of the purpose or intent for holding them. If the derivative is a hedge,depending on the nature of the hedge,a change in fair value of the derivative will be offset against the change in the fair value of a hedge asset or liability through earnings. JCS utilizes interest rate swaps to manage interest rate costs and to hedge against risks associated with changing interest rates. JCS designates interest rate swaps as hedges of specific debt instruments. Interest differentials on interest rate swaps are recognized as adjustments to interest incurred on the related debt instruments(NOTE 14). Subsequent Events JCS has evaluated subsequent events through December 5, 2012, which is the date the consolidated financial statements were available to be issued. 3. OPERATING DEFICIT AND MANAGEMENT PLANS JCS entered the year ending June 30,2013 after having concluded three years of major restructuring followed by one year of taking actions and implementing programs designed to generate revenue streams not related to grant and government funding.Specifically,JCS added both marketing and fund raising resources during the fiscal year ended June 30, 2012, while expanding its housekeeping services, behavioral health counseling services, and its job placement services. There was a continuation of the weak economy throughout the fiscal year;and this,coupled with significant government revenue shortfalls at all levels of government resulted in further downward pressure on JCS revenues during the fiscal year ended June 30,2012. JCS,however,continued to eliminate costs associated with the lost revenues, continued to improve its efficiency by delivering services to remaining programs and was able to maintain overall revenues and improve its financial position. Additionally, GMJF continued its support of JCS by continuing to provide an allocation to JCS and guaranteeing a significant portion of the new facility(NOTE 12). 4. PLEDGES RECEIVABLE, NET Pledges receivable resulting from fundraising are summarized as follows for the years ended June 30,: 2012 2011 Gross pledges receivable $ 118,490 $ 307,088 Less:Allowance for doubtful accounts and discount (27,944) (118,770) Pledges receivable, net $ 90,546 $ 188,318 - 12- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 4. PLEDGES RECEIVABLE, NET(CONTINUED) Pledges receivable with payment terms in excess of one year have been discounted using an interest rate of approximately 4%to reflect their estimated present value. Pledges receivable are unsecured and are primarily from South Florida residents. Approximate payments to be received on the pledges receivable are as follows: Year ended June 30; 2013 $ 43,000 2014 37,000 2015 31,000 2016 7,000 $ 118,000 5. CONTRIBUTION RECEIVABLE—GREATER MIAMI JEWISH FEDERATION, INC. JCS received contributions from GMJF of approximately$2,293,000 and$2,348,000 for the years ended June 30, 2012 and 2011, respectively. This contribution includes amounts passed through the United Way amounting to approximately$645,000 and $754,000 for the years ended June 30, 2012 and 2011, respectively. During the year ended June 30,2011,JCS notified GMJF that approximately$248,000 of a temporarily restricted contribution made in the prior year was to be reversed due to the fact JCS received other sources of funding for the particular program for which the funds were allocated to. Accordingly, contributions revenue from the GMJF for the year ended June 30, 2011 is reflected net of the approximate$248,000 adjustment.Total receivables due from the GMJF, including the United Way pass through,at June 30,2012 and 2011 totaled approximately$2,293,000 and$2,549,000,respectively. These receivables are due in less than one year. 6. INVESTMENTS JCS investments are held and administrated by GMJF.Certain assets are invested in the pooled blended investment strategy of GMJF.The pooled investment strategy includes investments in a variety of mutual funds, hedge funds, government securities,equities,Israel Bonds and other types of investments.All monies held at GMJF are recorded at their fair market value and totaled approximately$967,000 and$732,000 at June 30,2012 and 2011,respectively.The investment income, net of fees, for the years ended June 30, 2012 and 2011 totaled approximately $3,000 and $68,000, respectively, as reflected in the Consolidated Statements of Activities. 7. FAIR VALUE MEASUREMENTS The FASB established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities(Level 1 measurements) and the lowest priority to unobservable inputs(Level 3 measurements). The three levels of the fair value hierarchy are described as follows: • Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that JCS has the ability to access. • Level 2 Inputs to the valuation methodology include: • quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • .inputs other than quoted prices that are observable for the asset or liability; • inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. • Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. - 13- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 7. FAIR VALUE MEASUREMENTS(CONTINUED) The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The values of the assets invested with GMJF are determined by calculating JCS's net asset value("NAV")in the pool.JCS has the ability to redeem the investment at NAV upon request;as such,JCS investment is reflected at NAV on the Consolidated Statements of Financial Position and reported as level 2 under the fair value hierarchy. At June 30,2012 and 2011,approximately$784,000 and$551,000,respectively,of the total investment balance was invested in the blended strategy pool with underlying securities in each.level.of the fair value hierarchy.The blended strategy pool has a high concentration in mutual funds but also includes less liquid investments such as private equity and hedge funds.The remaining balance was invested in the fixed investment strategy pool comprised of level 1 bond funds.The investment strategy is to place emphasis on broad diversification to reduce portfolio volatility and maximize investment returns at appropriate levels of risk over time. The carrying amount of all financial assets and current liabilities approximates fair value because of their short-term nature.The carrying amount of the mortgage payable and line of credit approximates their fair value because the rates and term reflect current market rates for debt with similar maturities and credit quality. Additionally, the fair value of the interest rate swap is based on dealer quotations which generally represent an estimate of the amount JCS would pay or receive to terminate the agreement at the reporting date. Although JCS believes its valuation methods are appropriate and consistent with other market participants,the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables represent JCS's financial instruments measured at fair value on a recurring basis at June 30,2012 and 2011 for each of the fair value hierarchy levels: Fair Value Measurements Quoted Prices In Active Significant Other Significant Other Markets for Observable Unobservable Identical Assets Inputs Inputs Description 613012012 (Level 1) (Level 2) (Level 3) Assets: Fixed investment strategy pool $ 182,863 $ - $ 182,863 $ - Blended investments strategy pool 783,695 - 783,695 - Total $ 966,558 $ - $ 966,558 $ - Liability: Interest rate swap $ (159,478) $ - $ (159,478) $ - - 14- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 7. FAIR VALUE MEASUREMENTS(CONTINUED) Fair Value Measurements Quoted Prices In Active Significant Other Significant Other Markets for Observable Unobservable Identical Assets Inputs Inputs Description 613012011 (Level 1) (Level 2) (Level 3) Assets: Fixed investment strategy pool $ .180,548 $ $ 180,548 $ - Blended investments strategy pool 551,464 - 551,464 - Total $ 732,012 $ - $ 732,012 $ - Liability: Interest rate swap $ (154,675) $ - $ (154,675) $ - 8. PROPERTY AND EQUIPMENT, NET The major classifications of property and equipment consist of the following at June 30,: 2012 2011 Land $ 92,340 $ 92,340 Building and improvements 979,535 940,039 Fumiture,fixtures and equipment 688,966 664,975 Leasehold improvements 734,125 707,934 Computer hardware and software 669,763 641,456 Transportation equipment 696,376 696,376 3,861,105 3,743,120 Less accumulated depreciation (3,154,131) (3,064,899) $ 706,974 $ 678,221 Depreciation expense was approximately $89,000 and $86,000 for the years ended June 30, 2012 and 2011, respectively. Additionally,during the year ended June 30,2011,JCS wrote off approximately$84,000 of property and equipment as a result of the abandonment of a senior center in Miami-Dade County,FL.The property was abandoned because it could not be occupied without improvements required to meet current safety codes and Miami-Dade County,the owner of the facility, estimated the required improvements would take over one year to complete. 9. BENEFICIAL INTEREST IN REMAINDER TRUSTS Under the provisions of an accounting standard,a contribution is not recorded as an unconditional contribution if there are conditions based upon future events.JCS has a beneficial interest in a charitable remainder annuity trust of which GMJF is the second successor trustee.The revocable trust was donated to JCS in December 2003 and provides the agency with 100%of the remaining principal and 75%of the income of the trust. The remaining income of the trust is to be used to create an endowment fund within GMJF Foundation of Jewish Philanthropies.Five percent of the assets of the endowment fund,determined as of December 31 each year,shall be distributed,of which 10%goes to JCS for development and enhancement of information systems,50%goes to JCS to meet the needs and expand the services to senior adults, 15%goes to JCS for enhancing programs and activities in Broward County,Florida and 25%goes to the United Jewish Community of Broward County. - 15- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 9. BENEFICIAL INTEREST IN REMAINDER TRUSTS(CONTINUED) In this case,JCS has determined that JCS'beneficial interest in the remainder trust of approximately$646,000 and $667,000 at June 30,2012 and 2011,respectively,is conditional and therefore no amount has been recorded in the consolidated financial statements. 10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following: 2012 2011 Trade payables $ 972,961 $ 888,868 Fair market value of interest rate swap agreement(NOTE 14) 159,478 154,675 Payroll accrual 112,258 108,675 Severance payable and other related expenses 76,466 152,932 Other 94,193 52,086 $ 1,415,356 $ 1,357,236 11. LINE OF CREDIT During the year ended June 30,2012,JCS entered into a line of credit with a bank that provides for borrowings up to $1,000,000,bearing interest at the 30-day LIBOR plus 225 basis points(2.44%as of June 30,2012)(the"First Line of Credit").Additionally,JCS entered into a second line of credit with a bank that provides for borrowings up to$300,000, bearing interest at the 30-day LIBOR plus 300 basis points(3.19%as of June 30,2012)(the"Second Line of Credit"). Both lines of credit are collateralized by a blanket lien on JCS's assets. Additionally, the First Line of Credit is fully guaranteed by GMJF. The outstanding principal is due on demand and the interest is payable monthly. The outstanding balance as of June 30,2012 totaled$950,000.The lines of credit replaced a line of credit that JCS had with another bank for borrowings up to$1,000,000 at the 30-day LIBOR plus 300 basis points.That line of credit had an outstanding balance of$1,000,000 as of June 30, 2011. The lines of credit contain a debt service ratio covenant which was met by JCS at June 30,2012. JCS is required to reduce the principal outstanding on the First Line of Credit by$25,000 quarterly until December 15,2012. The bank requires that JCS maintain a zero balance under the Second Line of Credit for a consecutive period of at least 30 days during each six month period.At June 30, 2012, there was no balance outstanding on the Second Line of Credit. Interest expense on the lines of credit for the years ended June 30,2012 and 2011 was approximately$24,000. 12. ADVANCES FROM GREATER MIAMI JEWISH FEDERATION, INC., NET During the year ended June 30,2009,GMJF made advances to JCS to support operations.The outstanding balance owed on these advances from GMJF at June 30, 2012 and 2011 totaled$1,567,500 and$1,650,000 respectively. During the year ended June 30,2010,JCS and GMJF entered into a payment plan in which JCS is scheduled to make principal payments totaling$82,500 a year commencing the year ending June 30,2012 through 2031 provided JCS has cash surpluses necessary to make such payments.There is no interest on the advance;accordingly,the advance was discounted using an average rate of approximately 3%.At the end of each year,JCS will amortize the discount on the advance by recording interest expense and increasing the advance payable. Additionally, JCS will record a corresponding reclassification between temporarily restricted net assets and unrestricted net assets for an amount equal to the interest expense. - 16- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 12. ADVANCES FROM GREATER MIAMI JEWISH FEDERATION, INC., NET(CONTINUED) Future maturities for the years subsequent to June 30,2012 are as follows: Year ending June 30, 2013 $ 82,500 2014 82,500 2015 82,500 2016 82,500 2017 82,500 Thereafter 1,155,000 Advance amount 1,567,500 Present value discount (366,440) Present value of advance $ 1,201,060 13. MORTGAGE PAYABLE JCS has a mortgage payable due June 15,2016. Interest is charged at LIBOR plus 1.5%(1.69%and 1.84%at June 30, 2012 and 2011, respectively) with monthly payments of principal and interest of$7,958. JCS entered into an interest rate swap agreement to fix the interest rate at 7.34% (NOTE 14).The mortgage is collateralized by certain buildings and improvements.The loan contains a debt service ratio covenant which was met by JCS at June 30,2012. The outstanding balance as of June 30,2012 and 2011 totaled$836,219 and$866,979,respectively.Interest expense on the mortgage payable for the years ended June 30, 2012 and 2011 was approximately $63,000 and $65,000, respectively. 14. FAIR VALUE OF INTEREST RATE SWAP JCS has entered into a derivative financial instrument with a major financial institution as of June 5,2006 to manage overall borrowing costs associated with the mortgage payable(NOTE 13).At June 30,2012 and 2011,JCS had an interest rate swap agreement with a notional amount of$836,219 and$866,979,respectively, maturing on June 15, 2016. JCS's available rate borrowings are based on the LIBOR.This agreement fixes the LIBOR at an interest rate of 7.34%.The swap is a cash flow hedge,as it has been designated against the mortgage payable carrying a variable rate of interest and converts such loan to fixed debt.The fair value of the interest rate swap as of June 30,2012 and 2011 was a liability of$159,478 and$154,675,respectively,as reflected in the Consolidated Statements of Financial Position within the caption"Accounts payable and accrued liabilities." The fair value is based on dealer quotations which generally represent an estimate of the amount JCS would pay or receive to terminate the agreement at the reporting date.The counterparty to the interest rate swap is a highly rated financial institution. As such,management believes the risk of counterparty default is mitigated. 15. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following: 2012 2011 Greater Miami Jewish Federation, Inc.allocation for next year $ 2,293,214 $ 2,548,942 Discount on advances from Greater Miami Jewish Federation, Inc. 366,440 411,934 Community Kosher Food Bank 89,274 153,441 Pledge receivables, net 90,546 188,318 Others 248,708 160,054 $ 3,088,182 $ 3,462,689 - 17- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 15. TEMPORARILY RESTRICTED NET ASSETS(CONTINUED) In September 2010,JCS was notified that it was named as a beneficiary of an individual retirement account(IRA)with a balance of$500,000. Based on the information available to JCS when the gift was received, JCS recorded the donation as temporarily restricted as of June 30, 2010. In October 2010, based on its review regarding the circumstances and information supporting the donation, JCS determined that the donation was unrestricted. As a result, JCS reclassified the gift out of temporarily restricted and into the unrestricted fund. The reclassification is reflected on the Consolidated Statements of Activities within net assets released from restriction during the year ended June 30,2011. 16. PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets consist of the following endowment funds: 2012 2011 Miriam and Sydney Olson Endowment Fund $ 396,457 $ 396,457 Rose Leiter Endowment Fund 300,000 300,000 Strassman Endowment Fund 237,848 237,848 Other Endowment Funds 248,053 248,053 $ 1,182,358 $ 1,182,358 17. COMMITMENTS AND CONTINGENCIES Lease Commitments JCS leases certain premises under non-cancelable operating leases expiring through 2020.Certain leases provide for additional rentals based on increased operating costs of the premises.Approximate future minimum lease payments are as follows: Year ending June 30, 2013 $ 334,000 2014 307,000 2015 202,000 2016 197,000 2017 188,000 Thereafter 500,000 $ 1,728,000 Occupancy expense,which includes rental leases as described above,was approximately$471,000 and$508,000,for the years ended June 30,2012 and 2011,respectively and is reflected in the Consolidated Statements of Functional Expenses under the caption"occupancy expenses." Litigation From time to time,JCS is involved in legal proceedings arising in the ordinary course of business. JCS believes there is no litigation pending against it that could have, individually or in the aggregate, a material adverse effect on its consolidated financial position,results of activities or cash flows. 18. ENDOWMENTS JCS's endowment consists of individual funds established for a variety of purposes. Its endowment is comprised of donor-restricted endowment funds. As required by U.S. GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. - 18- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 18. ENDOWMENTS(CONTINUED) Interpretation of Relevant Law The State of Florida adopted the Florida Uniform Prudent Management of Institutional Funds Act("FUPMIFA").JCS has interpreted the FUPMIFA as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary.As a result of this interpretation, JCS classifies as permanently restricted net assets(a)the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund.The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net.assets is classified-as temporarily restricted net assets until those amounts are appropriated for expenditure by JCS in a manner consistent with the standard of prudence prescribed by FUPMIFA. JCS considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment fund earnings: (1) The duration and preservation of the fund (2) The purposes of JCS and the donor-restricted endowment fund (3) General economic conditions (4) The expected total return from income and the appreciation of investments (5) Other resources of JCS (6) The investment policies of JCS For the years ended June 30, 2012 and 2011, JCS has elected not to add appreciation for cost of living or other spending policies to its permanently restricted endowment for inflation and other economic conditions. Summary of Endowment Net Assets June 30,2012: Temporarily Permanently Unrestricted Restricted Restricted Total Donor-restricted endowment funds $ (113,227) $ 85,641 $ 1,182,358 $ 1,154,772 Summary of Endowment Net Assets-June 30,2011: Temporarily Permanently Unrestricted Restricted Restricted Total Donor-restricted endowment funds $ (204,709) $ 92,211 $ 1,182,358 $ 1,069,860 Changes in endowment net assets as of June 30,2012: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets,beginning $ (204,709) 92,211 $ 1,182,358 $ 1,069,860 Investment activity 1,536 4,186 - 5,722 Repayment of borrowing 300,000 - - 300,000 Appropriated for expenditure (210,054) (10,756) - (220,810) Endowment net assets,ending $ (113,227) $ 85,641 $ 1,182,358 $ 1,154,772 - 19- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,2012 AND 2011 18. ENDOWMENTS(CONTINUED) Changes in endowment net assets as of June 30,2011: Temporarily Permanently Unrestricted Restricted Restricted Total Endowment net assets,beginning $ (230,551) $ 82,710 $ 1,178,854 $ 1,031,013 Investment activity (24,158) 11,491 3,504 (9,163) Repayment of borrowing 50,000 - - 50,000 Appropriated for expenditure - (1,990) - (1,990) Endowment net assets,ending $ (204,709) $ 92,211 $ 1,182,358 $ 1,069,860 Summary of Endowment Assets: Endowment assets as of June 30 are invested as follows: 2012 2011 Restricted investments(NOTE 6) $ 966,558 $ 732,012 Student loans(included within"Prepaid expenses and other assets") 13,185 68,323 Restricted cash 175,029 269,525 $ 1,154,772 $ 1,069,860 Funds with Deficiencies From time to time,the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor requires JCS to retain as a fund of perpetual duration. In accordance with U.S. GAAP, deficiencies of this nature that are reported in unrestricted net assets were approximately$113,000 and$205,000 as of June 30,2012 and 2011,respectively.These deficiencies have been recorded as unrestricted expenses and are due to the permanently restricted net assets.JCS has established a plan to fund the deficiencies by repaying$50,000 a year to the endowment assets.In addition to the.planned funding of$50,000,JCS funded its endowment by$250,000 during the year ended June 30,2012.These deficiencies resulted from JCS borrowing from such funds for operations, unfavorable market fluctuations that occurred shortly after the investment of new permanently restricted contributions and continued appropriation for certain programs that was deemed prudent by JCS. Return Objectives and Risk Parameters JCS has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that JCS must hold in perpetuity or for a donor-specified period(s). JCS expects its endowment funds, over time,to provide a rate of return in excess of the original permanently restricted principal.Actual returns in any given year may vary. Strategies Employed for Achieving Objectives To satisfy its long-term rate-of-return objectives,JCS assets are invested with GMJF pooled blended strategy(NOTE 6) and fixed income strategy. GMJF targets a diversified asset allocation that places a greater emphasis on equity- based alternative investments to achieve its long-term return objectives within prudent risk constraints. Spending Policy and How the Investment Objectives Relate to Spending Policy JCS has a policy of appropriating for distribution each year 5%of its endowment funds average fair value over the period of four quarters through the calendar year end preceding the fiscal year in which the distribution is planned. In establishing this policy,JCS considered the long-term expected return on its endowment.Accordingly,over the long term,JCS expects the current spending policy to allow its endowment to grow. -20- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS -21 - JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30,2012 Federal Grantor/Pass-through Federal CFDA Federal Grantor/Program or Cluster Title Contract Number Expenditures FEDERAL AWARDS: U.S.Department of Health and Human Services Pass-Through State of Florida,Department of Elder Affairs and Alliance For Aging,Inc. Aging Cluster: Special Programs for the Aging Title III,Part C Nutrition Services 93.045/OAA-1113(2011) $ 529,675 Special Programs for the Aging Title III,Part C Nutrition Services 93.045/OAA-1213(2012) 509,077 Special Programs for the Aging Title III,Part B Grant for Supportive and Senior Centers 93.044/OAA-1113(2 011) 208,719 Special Programs for the Aging Title III,Part B Grant for Supportive and Senior Centers 93.044/OAA-1213(2012) 207,935 Nutrition Services Incentive Program 93.053/US-1139(2011) 55,111 Nutrition Services Incentive Program 93.053/US 1239(2012) 90,590 Sub-total Aging Cluster: 1,601,107 Pass-Through State of Florida,Department of Elder Affairs and Alliance for Aging,Inc. National Family Caregiver Support,Title III.Part E 93.052/OAA-1113(2011) 31,587 National Family Caregiver Support,Title III,Part E 93.052/OAA-1213(2012) 3,199 34,786 Total U.S.Department of Health and Human Services 1,635,893 U.S.Department of Education. Pass-Through State of Florida,Department of Education Division of Vocational Rehabilitation Vocational Rehabilitation Cluster: Rehabilitation Services-Vocational Rehabilitation Grant-Broward 84.126/11-130(2011) 30,645 Rehabilitation Services-Vocational Rehabilitation Grant-Broward 84.126/12-144(2012) 92,212 Rehabilitation Services-Vocational Rehabilitation Grant-Broward 84.390NJ-188 25,353 Rehabilitation Services-Vocational Rehabilitation Grant-Broward 84.390NS-132 81,797 Rehabilitation Services-Vocational Rehabilitation Grant-Dade 84.390NJ-188 85,145 Rehabilitation Services-Vocational Rehabilitation Grant-Dade 84.390NS-132 402,910 Sub-total Vocation Rehabilitation Cluster: 718,062 Total U.S.Department of Education 718,062 The accompanying notes to the Schedule of Expenditure of Federal Awards are an integral part of this schedule. -22- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS(CONTINUED) JUNE 30,2012 Federal Grantor/Pass-through Federal CFDA Federal Grantor/Program or Cluster Title Contract Number Expenditures U.S.Department of Housing and Urban Development Pass-Through Miami-Dade County Supportive Housing Program Supportive Housing Program 14.235/FI 0220 134D01003 $ 871,009 Community Development Block Grant Cluster: Pass-Through the City of North Miami Community Development Block Grants/Entitlement Grants Support Employment Project 14.218/258462 5,696 Community Development Block Grants/Entitlement Grants Support Employment Project 14.218/260438 3,584 9,280 Pass-Through The City of Miami Beach Community Development Block Grants/Entitlement Grants/ Senior Meals 14.218/6-10-MC-12-0014 3,376 Community Development Block Grants/Entitlement Grants/ Senior Meals 14.218/6-11-MC-12-0014 11,213 Community Development Block Grants/Entitlement Grants/ Homelss Outreach 14.218/6-10-MC-12-0014 2,162 Community Development Block Grants/Entitlement Grants/ Homelss Outreach 14.218/B-11-MC-12-0014 9,002 Community Development Block Grants/Entitlement Grants/ Miami Beach Senior Center 14.218/B-10-MC-12-0014 1,988 Community Development Block Grants/Entitlement Grants/ Miami Beach Senior Center 14.218/6-11-MC-12-0014 13,312 41,053 Sub-total Community Development Block Grant Cluster: 50,333 Total U.S.Department of Housing&Urban Development 921,342 U.S.Department of Agriculture Pass-Through State of Florida,Department of Elder Affairs: Child and Adult Care Food Program 10.558N1098(2011) 10,381 Child and Adult Care Food Program 10.558N2098(2012) 20,147 Total U.S.Department of Agriculture 30,528 Department of Homeland Security Pass-Through United Way of Miami-Dade County Emergency Food and Shelter National Board Program 97.024/159400-009 163,439 Total Department of Homeland Security 163,439 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 3,469,264 The accompanying notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule. -23- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30,2012 A. GENERAL The accompanying Schedule of Expenditures of Federal Awards included herein represents the federal grant activity of JCS for the year ended June 30,2012. B. BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards is presented using the accrual basis of accounting. C. BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes the federal awards of JCS during the year ended June 30,2012.The information in this schedule is presented in accordance with the requirements of OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. The federal awards on the Schedule of Expenditures of Federal Awards are included in the Consolidated Statements of Activities within the captions of"Grants and contracts revenue." Contained within the caption of"Grants and contract revenue" are other non-federal, state, county grants and other contracts that are not required to be included in the Schedule of Expenditures of Federal Awards. -24- Al i 1,�' BAF } NlORR-ISON.BlRO�1rN ARGIL&;FARRA,-LIB_: cEKnFim,.Pueuc:AccouNTANrs;,an+6 AovrSotts REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Jewish Community Services of South Florida, Inc. and Affiliate We have audited the consolidated financial statements of Jewish Community Services of South Florida, Inc. and Affiliate ("JCS") as of and for the year ended June 30, 2012, and have issued our report thereon dated December 5, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered JCS's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of JCS's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of JCS's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of JCS's consolidated financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether JCS's consolidated financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of consolidated financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required 10 be reported under Government Auditing Standards. -25- An Independent Member of Baker Tilly International MIAMI 1001 Brickell Bay Drive,9th Floor,Miami FL 331311 T 305 373 5500 F 305 373 0056 www.mbafcpa.com FORT LAUDERDALE 301 East Las Olas Boulevard,0 Floor,Fort Lauderdale:FL 333011 T 954 760 9000 F 954 760 4465 To the Board of Directors Jewish Community Services of South Florida, Inc. and Affiliate Page Two We noted certain matters that we reported to management of JCS in a separate letter dated December 5, 2012. This report is intended solely for the information and use of the Board of Directors,management and specific legislative or regulatory bodies,federal awarding agencies,and pass-through entities and is not intended to be and should not be used by anyone other than-these specified parties. Ile Fort Lauderdale, Florida December 5, 2012 -26- -L MB , AF MC R—ISC)I:BROWN A1tGIT&.- ARRA.L.C._ CE.KnFIED;PUBUC:`ACCOUNTANTS;:AND ADV156ps REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER.COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Board of Directors Jewish Community Services of South Florida,.lnc. and Affiliate Compliance We have audited Jewish Community Services of South Florida, Inc. and Affiliate ("JCS") with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of JCS's major federal programs for the year ended June 30, 2012. JCS's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of JCS's management. Our responsibility is to express an opinion on JCS's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining,on a test basis, evidence about JCS's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on JCS's compliance with those requirements. In our opinion, JCS complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012. Internal Control Over Compliance The management of JCS is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit,we considered JCS's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for purposes of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the JCS's internal control over compliance. -27- An Independent Member of Baker Tilly International MIAMI 1001 Brickell Bay Drive,9th Floor,Miami FL 33131 T 305 373 5500 F 305 373 0056 www.mbafcpa.coni FORT LAUDERDALE 301 East Las Olas Boulevard,4&'Floor,Fort Lauderdale,FL 333011 T 954 760 9000 F 954 760 4465 To the Board of Directors Jewish Community Services of South Florida, Inc. and Affiliate Page Two A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees,in the normal course of performing their assigned functions,to prevent or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis.A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. We noted certain matters that we reported to management of JCS in a separate letter dated December 5, 2012. This report is intended solely for the information and use of the Board of Directors,management and specific legislative or regulatory bodies,federal awarding agencies,and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Fort Lauderdale, Florida December 5, 2012 -28- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA,INC.AND AFFILIATE SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL PROGRAMS FOR THE YEAR ENDED JUNE 30,2012 Section I—Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weakness identified? Yes X No Reportable condition identified that are not considered to be material weakness? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Programs Internal control over major programs: Material weakness identified? Yes X No Reportable condition identified that are not considered to be material weakness? Yes X None reported Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a)of Circular A-133? Yes X No Identification of major programs: Federal CFDA Number Name of Federal Program or Cluster 93.044/93.045/93.053 Aging Cluster 14.235 Supportive Housing Program Dollar threshold used to distinguish between $300,000 Type A and Type B programs: Auditee qualified as low-risk auditee? X Yes No -29- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL PROGRAMS(CONTINUED) FOR THE YEAR ENDED JUNE 30,2012 Section II— Financial Statements Findings No matters were reported. Section III—Federal Award Findings and Questions Costs No matters were reported. Section IV—Prior Year Findings No matters were reported. -30- SUPPLEMENTARY SCHEDULES -31 - JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATING SCHEDULE OF FINANCIAL POSITION JUNE 30,2012 ASSETS Jewish Inter- Community Company Services Masada Eliminations Total Cash and cash equivalents $ 52,454 $ 29,337 $ - $ 81,791 Board or donor restricted cash 212,124 - - 212,124 Federal,state and municipal grants and contracts receivable 1,841,145 - - 1,841,145 Service and other receivables,net 90,676 190,533 - 281,209 Contribution receivable-Greater Miami Jewish - Federation,Inc. 2,293,214 - - 2,293,214 Prepaid expenses and other assets 222,271 45,825 - 268,096 Inter-company receivable from JCS - 878,586 (878,586) - Investments 966,558 - - 966,558 Pledges receivable,net 90,546 - - 90,546 Property and equipment,net 694,127 12,847 - 706,974 TOTAL ASSETS $ 6,463,115 $ 1,157,128 $ (878,586) $ 6,741,657 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued liabilities $ 1,276,034 $ 139,322 $ - $ 1,415,356 Advances from granting agencies 127,779 - - 127,779 Inter-company payable to Masada 878,586 - (878,586) - Line of credit 950,000 - - 950,000 Advances from Greater Miami Jewish Federation,Inc.,net 1,201,060 - - 1,201,060 Mortgage payable 836,219 - - 836,219 TOTAL LIABILITIES 5,269,678 139,322 (878,586) 4,530,414 NET ASSETS(DEFICIT) Unrestricted (3,077,103) 1,017,806 - (2,059,297) Temporarily restricted 3,088,182 - - 3,088,182 Permanently restricted 1,182,358 - - 1,182,358 TOTAL NET ASSETS 1,193,437 1,017,806 - 2,211,243 TOTAL LIABILITIES AND NET ASSETS $ 6,463,115 $ 1,157,128 $ (878,586) $ 6,741,657 -32- JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE CONSOLIDATING SCHEDULE OF FINANCIAL POSITION JUNE 30,2011 ASSETS Jewish Inter- Community Company Services Masada Eliminations Total Cash and cash equivalents $ 55,518 $ 41,153 $ - $ 96,671 Board or donor restricted cash 833,699 - - 833,699 Federal,state and municipal grants and contracts receivable 1,122,231 - - 1,122,231 Service and other receivables,net 69,060 122,923 - 191,983 Contribution receivable-Greater Miami Jewish Federation,Inc. 2,548,942 - 2,548,942 Prepaid expenses and other assets 274,926 39,656 - 314,582 Inter-company receivable from JCS - 645,446 (645,446) - Investments 732,012 - - 732,012 Pledges receivable,net 188,318 - - 188,318 Property and equipment,net 656,230 21,991 - 678,221 TOTAL ASSETS $ 6,480,936 $ 871,169 $ (645,446) $ 6,706,659 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued liabilities $ 1,219,014 $ 138,222 $ - $ 1,357,236 Advances from granting agencies 293,020 - - 293,020 Inter-company payable to Masada 645,446 - (645,446) - Line of credit 1,000,000 - - 1,000,000 Advances from Greater Miami Jewish Federation,Inc.,net 1,238,066 - - 1,238,066 Mortgage payable 866,979 - - 866,979 TOTAL LIABILITIES 5,262,525 138,222 (645,446) 4,755,301 NET ASSETS(DEFICIT) Unrestricted (3,426,636) 732,947 - (2,693,689) Temporarily restricted 3,462,689 - - 3,462,689 Permanently restricted 1,182,358 - - 1,182,358 TOTAL NET ASSETS 1,218,411 732,947 - 1,951,358 TOTAL LIABILITIES AND NET ASSETS $ 6,480,936 $ 871,169 $ (645,446) $ 6,706,659 -33- O(O N b�0 O m m O m O. m •n O 0�1 N V t'1 m O m- < •NO N O• N w m m C d N N E o d� a w N �1 Q m m 1� O m N ~ �N ' r • � 110Y ' Vf tO o -Cd d • Ol h O - • . • . • V N ep Y�l N N E Q O N N N C9 !l w N •n m C2 m •n r�i m m m w m O m •n O f� � O ' m m na •n m m m O m m N m N d tp t7 m V m Q t7 N N a0 v.0 O Q Qi C m N •O m r m O O N .'! 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N O N m m m O pf N N T N r w « T� Sa • • . • • . • • • ' W J LL 8 w Q p Z .� N O vMi Q m m m � N N t .M.._ N O d U D w �" » Z U) w m o m QH r M M m m 0 5N F s C N cli 0 LL W w » LL OZ 2 w d O w m €w N S N a a w « M CJ Z `° ' LL W A cn z W E w U o w _ ry W Z p s s N Q °' N o M M m M M n O LL d m - N N Z N m M M a m • p (7 ' O� lND N M r D m t7 cw m r alt N a m m n m v of n �p of v pi m m m y c.,- N aD M� t0 n < •O n m m 17 M m m N N to N Q N - 2 LQ N m N m N It _ d f'7 t7 M r r Way IG w « Eo of °rn (°.. • o m m E—v °o b T • m M ' of ' n M clf 'If U ;a a u"i N uMi C I .wit E cl r a m n vt m r m 1� m ID m m N V m M m tp M m 1� N M m ' 1t�p0p.A - n ��Opp 10 .D ,rJ pni m IN m M w m M V4 m m N N C n M i•f N m m m N[v vt N 1 O yt I� {•j (7 C.'f N N c- C w N d C ai c c 0 `d w w. r o OLL r c o W 0 r m B ° z a' d Z LL a c A m z_ o a r 0 0 E v v W m m w a c ` 2 m w v m W r r W d m d N E Q Q t $a o w m 8' m aW ¢ w w u L E " cn w rn m 'O o o C V J2 b N d C d � Z N (A m � m d, H N o o m"d m d r ? r r W IO v io m o W m . m m m O w w w c�. o r Z w w w w a. m r (D Z Z LLI 0,L) ��Z aamrnaM NLL� z w u> _ K U JEWISH COMMUNITY SERVICES OF SOUTH FLORIDA, INC.AND AFFILIATE SCHEDULE OF REVENUES AND EXPENSES RELATED TO GRANTS FROM THE CONFERENCE ON JEWISH MATERIAL CLAIMS AGAINST GERMANY FOR THE YEAR ENDED JUNE 30,2012 GRANT REVENUE $ 4,103,958 GRANT EXPENSES: Personnel: Salaries and related expenses 461,823 Administrative overhead 354,969 Other than personnel 10,637 Specific assistance to clients 3,276,529 TOTAL GRANT EXPENSES $ 4,103,958 -36- EXHIBIT "C" "BUDGET99 The attached budget reflects the scope of expenses that may be incurred through this Agreement. All expenses must comply with applicable rules and regulations including Procurement and Davis Bacon Act. 17 ® BEACH CDBG FY 2013/14 Project Budget Sub-Recipient: Jewish Community Services Project: Senior Center Improvements I Please list all items that will be reimbursed by the City of Miami Beach. Line Item Quantity Unit Cost Une Tota Personnel(Employees Only)-List Position Title 0 0 0 Other Expenses Construction Consultant(Draws) $ 84,000.00 Project Manager $ 16,000.00 Project Total - $ 100,000.00 r EXHIBIT "D" "FINANCIAL MANAGEMENT" To comply with federal regulations, each program must have a financial management system that provides accurate, current and complete disclosure of the financial status of the activity. This means the financial system must be capable of generating regular financial status reports which indicate the dollar amount allocated for each activity (including any budget revisions), amount obligated (i.e., for which contract exists), and the amount expended for each activity. The system must permit the comparison of actual expenditures and revenues against budgeted amounts. The City must be able to isolate and to trace every CDBG dollar received and prove where it went and for what it was used. The City is responsible for reviewing and certifying the financial management of any operating agency, which is not a City department or bureau, in order to determine whether or not it meets all of the above requirements. If the agency's system does not meet these requirements and modifications are not possible, the City must administer the CDBG funds for the operating agency. Support for Expenditures Sufficient support for expenses depends on the type of expenditure. They normally include the following items: • Salaries - Should be supported by proper documentation in personnel files of hire date, position, duties, compensation, and raises with effective date, termination date, and similar type information. Non-exempt employees are required by law to complete a timesheet showing number of hours they worked during the day. All employees paid in whole or in part from CDBG funds should prepare a time sheet indicating the hours worked on CDBG projects for each pay period. Based on these time sheets and the hourly payroll costs for each employee, a voucher statement indicating the distribution of payroll charges should be prepared and placed in the appropriate files.) • Employee Benefits - Should be supported by personnel policies and procedures manual, describing the types of benefits, eligibility and other relevant information.) • Professional Services - Should be supported by a complete and signed copy of the contract between the organization and the independent contractor, describing at the minimum, period of service, type of service and method for payments, in addition to the invoice from the private contractor.) • Purchases - At a minimum, purchases should be supported by a purchase order, packing list and vendor invoice. Credit card statements, travel itineraries, vendor statements and similar items do not represent support for an expense. Records Accounting records must be supported by source documentation. Invoices, bills of lading, purchase vouchers, payrolls and the like must be secured and retained for four years in order to show for what purpose funds were spent. Payments should not be made without invoices and vouchers physically in hand. All vouchers/invoices should be on vendor's letterhead. Financial records are to be retained for a period of four years, with access guaranteed to the City, to HUD or Treasury officials or their representative. 18 Audits For years beginning after June 30, 1996, all nonprofit organizations, state governments, and local governments that receive Federal funding fall under the revised OMB Circular A-133, Audits of States, Local Governments, and Nonprofit Organizations. Non-Federal entities that expend $500,000 or more in a year in Federal awards must have a single or program- specific audit. One copy of the sub-recipient or vendors' audited financial statement shall be submitted to the City immediately following the end of the fiscal year(s) during which CDBG funds are received. All auditees must submit to the Federal Audit Clearinghouse (FAC) a data collection form (Form SF-SAC) and reporting package upon completion of the annual .audit in accordance with OMB Circular A-133. The deadline for this submission is the earlier of the 30 days after ort t of the auditor ) receipt P ('s re s , or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for the audit. Address for submission is: The Federal Audit Clearinghouse 1201 E. 10th Street Jeffersonville, IN 47132 Phone (301) 457-1551 or (800) 253-0696 Email: aov.facO-census.QOv Web: httg://harvester.census.gov/sac F:IRHCDI$ALLIHSG-CDICDBGICDBG 2013 2014 Capital Improvements\JCS Capital Improvements 13-141JCS Senior Center Capital Improvement Scope of Services 13-14.docx 19