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Little Havana Activities & Nutrition Centers of Dade County, Inc. COMMUNITY DEVELOPMENT BLOCK GRANT AGREEMENT BETWEEN THE CITY OF MIAMI BEACH AND LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. This Agreement made and entered into this �, day of -Apri, , 2014,E by and between the CITY OF MIAMI BEACH, a Florida municipal corporation havin it principal office at 1700 Convention Center Drive, Miami Beach, Florida, 33139, (hereinafter referred to as "City"), and LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC., a not-for profit corporation having its principal office at 700 SW 8th Street, Miami, Florida, 33130(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 $25,000, to Provider for the Rainbow Intergenerational Child Care Center, located at 833 6th Street, 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 Program in accordance with Exhibits A and B, which Program is summarized as follows: Rainbow Intergenerational Child Care Program To provide an affordable child development program for 12 preschoolers of very-low income working parents. Employ Miami Beach seniors as teachers. Section 3. Agreement Amount: The City agrees to make available TWENTY FIVE THOUSAND DOLLARS ($25,000) for use by the Provider during the Term of the Agreement (hereinafter, the aforestated amount including, without limitation, any additional amounts 1 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 Program 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 Program 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 Program 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. Exhibit B contains reporting forms to be used in fulfillment of this requirement. Other reporting requirements may be required by the City Manager in the event of Program 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 Program, 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 Program 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 displaces 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 judgment. 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 re appropriate any remaining unused Funds. Section 12. Termination of Agreement: 12ATermination 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 Program 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 Program 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. 12.2Term!nation 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 City 3 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. 12.3T'ermination 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 Program. 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 the City (whether under this Agreement, or at law or in equity), the Provider shall 4 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 the 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 directly pertinent to this Agreement 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, asspecified 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"; (5) Section 84.32, "Real Property" - In lieu of 84.32, CDBG sub-recipients shall follow 570.505; 5 (6) Section 84.34(8), "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 " - for 4.71 "Closeout d. Subpart D - "After-the-Award Requirements except o 8 , P Procedures . Section 18. Sponsorships: The Provider agrees that all notices, informational pamphlets, press releases, advertisements, descriptions of the sponsorship of the Program, research reports, and similar public notices prepared and released by the Provider for, on behalf of, and/or about the Program, 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 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 Agreement, including matching funds and Program Income. These records shall 6 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 Program 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 Program. 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. The Provider shall maintain and carry in full force during the Term of this Agreement, and/or throughout the duration of the Program contemplated herein, whichever is longer, the following insurance: 7 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. 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 8 City of Miami Beach 1700 Convention Center Drive, Miami Beach, FL 33139 Provider: Ramon Perez-Dorrbecker, President/CEO Little Havana Activities and Nutrition Centers of Dade County, Inc. 700 SW 8th Street Miami, FL 33130 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 $10,000, for any action or claim for breach of contract arising out of the performance or nonperformance of any obligations imposed upon the City by this Agreement. Nothing contained in this subparagraph or elsewhere in this Agreement is in any way intended to be a waiver of the limitation placed upon City's liability as set forth in Florida Statutes, Section 768.28. Section 26. This Agreement shall be binding upon all parties hereto and their respective heirs, executors, administrators, successors and assigns. [SIGNATURES TO FOLLOW] 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officials on the day and date first above indicated. LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. a Florida not-for-profit corporation ATTEST: Secretary President Signature L v%S 0 CNI Ramon Perez-Dorrbecker, President&CEO Print Name Print Name and Title CITY OF MIAMI BEACH a Florida Municipal corporation / ATTEST: City Cle k '�z'.,;r I1�layor,;a "'��- VIA .►N o I lo� r �l� I 1 lab Print Name s % Peri6 a e APPROVED AS TO FORM & LANGUAGE &FOR EXECUTION *atAttor ey F:IRHCDI$ALLIHSG-CDICDBGICDBG 2013 2014 Public Services\LHANC FY 1314.docx 10 �I EXHIBIT "A" "SCOPE OF SERVICES99 The Sub-Recipient agrees to provide the following: Units ofService Provision of affordable child development 62 units program to preschoolers of very low income working parents. Employ Miami Beach seniors. 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, 58.34, 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. 1 Monthly Proformas — All Capital projects with multiple (more than one) funding sources require the submission of monthly proformas to the City. 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: Provision of affordable 62 units 8336 t Street, Miami Monthly child development Beach program to preschoolers of very low income working parents. Employ Miami Beach seniors. Service Benchmarks Service Benchmark(s) Provision of affordable child development 60 children served and 2 seniors program to preschoolers of very low income employed. working parents. Employ Miami Beach seniors. 2 Service Documentation Services will be deemed as provided when the following documentation is provided within the noted timeframes: Service Documentation Submission Dead Provision of Intake and screening forms Monthly affordable child Timesheets development Canceled checks program to preschoolers of very low income working parents. Employ Miami Beach seniors. Applicable Federal Regulations The Sub-Recipient must apply to all applicable federal regulations including: I. Non-Discrirni nation 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 VI of the Civil Rights Act of 1964 As Amended 42 USC 2000d et se 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 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 3 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. 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 I 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. 4 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 504 imposes 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)). 5 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. 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. seg.): 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 6 the Provider to maintain written standards governing the performance of their employees engaged in awarding and administering contracts. At a minimum, these standards must: - 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. 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. 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, 7 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 financial assistance, the age of the structure, and whether the dwelling is rental or owner occupied. 8 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 http://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 regulationsCaD-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 05/14/2010) (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 $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. 10 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. 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: 11 • Agreement compliance • Leverage and fiscal soundness • Accuracy and timeliness of Monthly Progress Reports • Accuracy and timeliness of Monthly Financial Reports • 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. 12 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 Ratings will be given for each performance measure based on the following: Performance Measure Rating Rationale : Score 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. 13 The following chart depicts the submission dates for the term of this Agreement: Month Date or Submission October 2013 November 12, 2013 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 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. i 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 1St of each year of affordability. Tenant rolls must be certified by the Sub-Recipient Agency's authorized signatory. 14 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. 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 EXHIBIT 6613" "DOCUMENTATION" 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) 16 From:MagW Cardona FaxiD: Page 2 of 2 Date:9/1 7120 1 3 03:01 PM Page:2 of 2 LrrTL-1 OP ID:MCAR ®� CERTIFICATE ®F LIABILITY INSURANCE DATE 091171I3 09117/13 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 policy (les)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 endorsement(s). PRODUCIER - 305-442-9507— CONTACT Insurance Marketers,Inc. 305-447-8527 (A/C,PHONE F Ne' 2600 Douglas Road Suite 712 &MAIL Coral Gables,FL 33134 ADDRESS: Evarist Milian,Jr. INSURER(S)AFFORDING COVERAGE NAIC 0 INSURERA:Arch Specialty Insurance Co. 21199 INSURED Little Havana Activities and INSURERB:Arch Insurance Company 11150 Nutrition Centers of Dade INSURER C:Technolo Insurance Co. 42376 Count 700 S.W.8th Street INSURER D: Miami,FL 33130 INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE TE M OR CONDITION O BEEN ISSUED TO THE ANY CONTRACT OR INSURED DOCUMENT WITH RESPECT TO WHICH THIS INDICATED. NOTWITHSTANDING ANY REQUIREMENT, CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS 9UB.IECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF UISIJRANCE p POLICY NUMBER MMIDO EFF MM/DDIYY LIMITS LTR EACH OCCURRENCE ti 1,000,000 GENERAL LIABILITY DAMAGE A X COMMERCIAL GENERAL LIABILITY X NCPKG0123603 01/01/13 01/01/14 REMIS E 10 e ace $ 6,000 CLAIMS-MADE OCCUR MED EXP(Anyone person) $ 6,00 PERSONAL&ADV INJURY 1,000,000 GENERAL AGGREGATE S 3,000,00 flEiJ'L AGGREGATE LIMIT APPLIES PER PRODUCTS-COMPIOP AGG 3 3,000,00 X POLICY PRO- LOC Emp Ben. $ 1,000,00 COMBINED SINGLE LIMIT 1,000,00 AUTOMOBILE LIABILITY accident B X ANY AUTO X NCAUT0123603 01/01/13 01/01/14 BODILY INJURY(Per person) S ALL OWNED SCHEDULED BODILY INJURY(Per accident) $ AUTOS lxxcomp/Coll AUTOS PROPERTY DAMAGE $ NON-OWNED -(Par cede t HIRED AUTOS AUTOS X $2000 iced EACH OCCURRENCE $ 1,000,000 X UMBRELLA LIAR X OCCUR B EXCESS LIAR CLAIMS-MADE NCFXS123600 01/01/13 01/01/14 AGGREGATE $ 1,000,000 DED X RETE ON` 10000 $ STATU- X O7H- WORKERS COMPENSATION I TORY L AND EMPLOYERS LIABILITY YIN 600,000 C ANY PROPRIETORIPARTNERIEXECUTIVE ❑ C331i370G 04/13/13 04113/14 E.L.EACH ACCIDENT S OFFICER/MEMBER EXCLUDED? NIA 600,00 (Mandatory In NH) EL DISEASE-EA EJWPLOYF� 3 If es,deacnbe under EL DISEASE-POLICY LIMIT $ 600,000 DESCRIPTION OF OPERATIONS below - T DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES(Attach ACORD 101,Additional Remarks Schedule,Ir more space Is required) Social Services Organization providing range of services to seniors in South Florida.Subject to terms,conditions,deductible and exclusions as shown In the policies. CERTIFICATE HOLDER CANCELLATION CIMIABE 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. 4700 Convention Center Drive Miami Beach,FL 33139 AUTHORIZED REPRESENTATIVE o.r ) ©1988-2010 ACORD CORPORATION. All rights ACORD 26(2010105) The ACORD name and logo are registered marks of ACORD j LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) FINANCIAL STATEMENTS AND REPORT REQUIRED UNDER GOVERNMENT AUDITING STANDARDS AND THE SINGLE AUDIT ACT FOR THE YEARS ENDED DECEMBER 31,2011 AND 2010 1' .F GLSC &Comp PLLC l 5 INNIME--i certified public accountants LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) FINANCIAL STATEMENTS AND REPORT REQUIRED UNDER GOVERNMENT AUDITING STANDARDS AND THE SINGLE AUDIT ACT FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT 1-2 STATEMENTS OF FINANCIAL POSITION 3 STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS 4 STATEMENTS OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6- 17 STATEMENTS OF FUNCTIONAL EXPENSES 18 SCHEDULE OF FUNCTIONAL EXPENSES BY DEPARTMENT OF ELDER AFFAIRS FUNDED SERVICES 19-21 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 22-23 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND CHAPTER 10.650, RULES OF THE AUDITOR GENERAL 24-25 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS 26-29 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS 30-31 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 32-33 ,tom -.~::; •� - GLSC &C®1l�LPANY PLLC � 6303 Blue Lagoon Drive,Suite 200 Miami Florida 33126-6025 Ph: 305 373-0123. 800 330-4728 .p 1 certified public accountants ( ) ( ) Fax:(305)374-4415 www.glsccpa.com INDEPENDENT AUDITORS' REPORT To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida We have audited the accompanying statements of financial position of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit Organization) ("Little Havana") as of December 31, 2011 and 2010, and the related statements of activities and changes in net assets and cash flows for the years then ended. These financial statements are the responsibility of Little Havana's management. Our responsibility is to express an opinion on these financial statements based on our audits. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits rovide a reasonable basis for P our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Little Havana as of December 31, 2011 and 2010, and the changes in its net assets and its 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 September 26, 2012, on our consideration of Little Havana's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 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 audit. An Independent Member of BKR INTERNATIONAL Firms In Principal Cities Worldwide To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying statement of functional expenses on pages 18, the schedule of functional expenses by the Department of Elder Affairs ("DOEA") funded services on pages 19 through 21, are presented for purposes of additional analysis and are not a required part of the financial statements. In addition, the schedule of expenditures of federal awards and state financial assistance projects is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.650, Rules of the Auditor General and is not a required part of the 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 financial statements. The schedules of functional expenses and expenditures of federal awards and state financial assistance projects have been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole. The schedule of functional expenses by the Department of Elder Affairs have not been subject to the auditing procedures applied in the audit of the a fnancial statements and, accordingly, we do not express an opinion or provide any assurances on it. G LSC P LLC- � l September 26,.2012 2 A GLSC &Commw, PLLC "i ' ': certified public accountants LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) STATEMENTS OF FINANCIAL POSITION December 31, ASSETS 2011 2010 Cash and cash equivalents $ 5,167,309 $ 5,860,007 Restricted cash 1,531,164 1,231,164 Investments 3,312,435 3,946,537 Due from funding agencies 3,264,151 3,900,592 Prepaids 15,603 95,722 Property and.equipment-net 8,055,742 5,232,011 Other assets 36,139 24,413 TOTAL ASSETS $ 21,382,543 $ 20,290,446 LIABILITIES AND NET ASSETS Accounts payable and accrued liabilities $ 1,158,246 $ 1,912,105 Notes payable 985,171 671,362 Accrued Nursing ome Services(Diversion)9 ( i n) 2,873,061 2,265,944 Unearned revenue 65,110 1,875,619 TOTAL LIABILITIES 5,081,588 6,725,030 NET ASSETS Unrestricted 13,348,070 10,539,561 Temporarily restricted 2,072,885 2,145,855 Permanently restricted 880,000 880,000 TOTAL NET ASSETS 16,300,955 13,565,416 TOTAL LIABILITIES AND NET ASSETS $ 21,382,543 $ 20,290,446 The accompanying notes are an integral part of these financial statements. 3 LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31,2011 (WITH COMPARATIVE TOTALS FOR 2010) 2011 Temporarily Permanently REVENUES AND OTHER SUPPORT: Unrestricted Restricted Restricted Total 2010 Grants: Federal Government $ 5,081,121 $ - $ - $ 5,081,121 $ 4,506,260 State of Florida 3,101,040 - - 3,101,040 625,605 Miami Dade County 1,469,028 73,395 - 1,542,423 1,380,210 United Way Allocation � 136,758 122,500 - 259,258 289,557 Participant contributions 593,972 - - 5 Other revenues: 93,972 562,456 Nursing Home Services(Diversion) 18,972,844 - - 18,972,844 21,463,604 Donated rent and services 426,434 - - 426,434 380,846 Private contributions 117,942 - - 117,942 119,570 Other sources 5,018,134 - - 5,018,134 4,461,744 Total revenues and other support 34,917,273 195,895 - 35,113,168 33,789,852 Net assets released through satisfaction of program restrictions 268,865 (268,865) - - - Total revenues,other support and transfers 35,186,138 (72,970) - 35,113,168 33,789,852 EXPENSES: Congregate meals programs 3,530,442 - - 3,530,442 3,495,301 Day care programs 1,970,337 - - 1,970,337 1,930,869 Health care programs 20,799,917 - - 20,799,917 21,513,088 Home delivered meals programs 2,424,914 - - 2,424,914 2,052,818 Transportation and support services programs 1,070,363 - - 1,070,363 1,040,862 Total program expenses 29,795,973 - - 29,795,973 30,032,938 Management and general 2,513,858 - - 2,513,858 1,624,404 Fundraising 67,798 - - 67,798 66,333 Total expenses 32,377,629 - - 32,377,629 31,723,675 CHANGE IN NET ASSETS 2,808,509 (72,970) - 2,735,539 2,066,177 NET ASSETS AT BEGINNING OF YEAR 10,539,561 2,145,855 880,000 13,565,416 11,499,239 NET ASSETS AT END OF YEAR $ 13,348,070 $ 2,072,885 $ 880,000 $ 16,300,955 $ 13,565,416 The accompanying notes are an integral part of these financial statements. 4 LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011 2010 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 2,735,539 $ 2,066,177 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 185,372 178,684 (Increase)Decrease in: Due from funding agencies (34,921) (1,008,582) Prepaids 80,119 334,087 Increase(Decrease)in: Accounts payable and accrued liabilities (753,859) 636,397 Accrued nursing home services(Diversion) 607,117 875,020 Unearned revenue (1,810,509) 408,583 Total adjustments (1,726,681) 1,424,189 Net Cash Provided by Operating Activities 1,008,858 3,490,366 CASH FLOWS FROM INVESTING ACTIVITIES Deposit of restricted cash (300,000) 315,893 Proceeds from sale(Purchases)of investments 634,102 (124,614) Increase in Other assets (11,726) Payments for construction in progress (2,648,222) (561,788) Acquisition of equipment (360,881) (179,999) Net Cash(Used in)Investing Activities (2,686,727) (550,508) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable 985,171 _ Net Cash Provided by Financing Activities 985,171 _ NET(DECREASE)INCREASE IN CASH (692,698) 2,939,858 CASH AT BEGINNING OF YEAR 5,860,007 2,920,149 CASH AT END OF YEAR $ 5,167,309 $ 5,860,007 SUPPLEMENTAL DISCLOSURE OF NON CASH TRANSACTIONS: During the years ended December 31,2011 and 2010, the organization recorded as revenue and expenses approximately$426,000 and $380,000 respectively in donated rent and services. At December 31, 2010, Little Havana had an outstanding receivable in the amount of$671,362 from Miami-Dade County as a reimbursement of expenses incurred related to the construction project funded by a CDBG loan program(See Note 10). The accompanying notes are an integral part of these financial statements. 5 LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2011 AND 2010 1. NATURE OF ACTIVITIES Little Havana Activities and Nutrition Centers of Dade County, Inc., ("Little Havana") is a not- for-profit organization whose mission is to respond to the health, nutritional, social and economic needs of socially and economically disadvantaged elderly and their families in Miami-Dade County, Florida. Little Havana operates and manages the following programs: Congregate Meals Programs Little Havana, as a whole- and -through its combined sources of funding, operates a comprehensive geriatric nutrition program and other social services for elderly residents at multiple sites in Miami-Dade County. Programs providing congregate meals include programs under Title IIIC-1 and Community Development. Title IIIC-1 (Public Law 92-258) of the Older Americans Act of 1965, as amended, established the Nutrition Program for the Elderly. The statute provides for annual funding by the federal government of a maximum of 90% of the annual estimated costs (in excess of participant contributions and United States Department of Agriculture ("USDA") cash in lieu of commodities) of establishing and operating programs to furnish low-cost, nutritionally sound meals to persons age sixty and over, and to their spouses regardless of age. Title IIIC-1 provides congregate meals, and nutrition education. . Federal funds are received locally through the area agency on aging entity, the Alliance for Aging, Inc. Additional funds are received from the State of Florida Local Service Programs. Matching funds are provided by the United Way of Dade County, Miami-Dade County and donated services. Supplemental funding is,provided by the USDA and voluntary contributions from participants. Community Development provides low-cost nutritionally sound meals, transportation, education, outreach services, counseling casework, social work and recreation to persons age sixty and over and is supported by the City of Miami, the City of Miami Beach, Miami-Dade County Community Development, and Miami-Dade County Department of Human Services. Day Care Programs The two programs that provide day care services are the Adult Day Care Program and Rainbow Intergenerational Child Day Care ("Rainbow Project"). The Adult Day Care Program provides preventive, remedial and restorative day care services to functionally impaired elderly in center-based, social and health care facilities. This program is funded by the State of Florida's Community Care for the Elderly(CCE), Title IIIE respite services, and Adult Day Care services. Channeling and Medicaid Waiver Projects are funded through the nonprofit local community care for the elderly lead agencies, (United Home Care Services, Inc. and the Miami Jewish Home and Hospital for the Aged). In addition, Medicaid waiver projects are funded through for profit Elder Care Program, United Healthcare, Inc., and private contributions. Additional resources for the Adult Day Care program is received through a fee-for-service- rendered arrangement, based on a pre-defined cost rate per unit of service. Little Havana's management uses the excess funds generated by this program to expand the existing facilities and program services in order to meet excess service demand. 6 c 1. NATURE OF ACTIVITIES (CONTINUED) Day Care Programs(Continued) Rainbow Project is an intergenerational program that utilizes the elderly to operate an affordable pre-school day care program for households in the Miami Dade County. The program is funded mainly through fee-for-service-rendered and participant contributions. Additional support is provided by the State of Florida through Miami-Dade County's Child Development Services, Early Learning Coalition VPK program, Agency for Workforce Innovation (Office of Early Learning)and City of Miami Beach. Health Care Programs The Pro-Salud Program consists of a primary health care facility whose services include health screening, medication management, education, and monitoring of chronic illnesses. The program is- funded by Title IIID (Public*Law 92-258) of the Older Americans Act of 1965, as amended. LHANC offers various fee-for-service medical services and a Medicare/Medicaid certified Home Health Agency which are part of the health programs offered to the community. Funds provided by Title IIID are required to be matched with cash or in-kind contributions equal to at least 10% of allocated funds. Matching funds are provided by donated health services and rent. The Medicare Nursing Home Diversion Program ("Diversion Program") was implemented to help frail, elderly persons with certain ailments and chronic diseases receive the necessary help or assistance, in order to remain living at home and avoid being admitted into a nursing home. The goal of this program is to ensure that these needy elderly people may receive the necessary services in their homes, so that they can improve their quality of life and avoid nursing home placement. The services provided under this program are long-term and are included within the Health Care Programs category. .Home Delivered Meals Programs The programs which provide home delivered meals include OAA Title IIIC-2, Medicaid Waiver programs accounted for under the Community Care for the Elderly Act of 1976, the Channeling Project, Emergency Food and Shelter Program ("FEMA"), and Miami-Dade County. Title IIIC-2 of the Older Americans Act of 1965 furnishes home-delivered meals for qualified participants. Federal funds are received locally through Alliance for Aging,.Inc. . Additional funds are received from Miami-Dade County and the State of Florida Local Service Programs. Supplemental funding is provided by the USDA and voluntary contributions from participants. The State of Florida (Public Law SB722) established the CCE Act of 1976. The statute provides for the annual funding by the State of Florida of 90%of the estimated costs to provide home-delivered meal services exclusively to functionally impaired persons and to help them live dignified and reasonably independent lives in their homes. Matching funds are provided by the United Way of Dade County and voluntary contributions from participants. The Channeling Program and the Medicaid Waiver Program provide functionally impaired elderly persons with low-cost nutritionally balanced home-delivered meals. These programs are funded by the State of Florida through the Miami Jewish Home and Hospital for the Aged and United Home Care Services. 7 1. NATURE OF ACTIVITIES(CONTINUED) Home Delivered Meals Programs(Continued) The FEMA Program provides the homebound elderly with emergency and nutritionally balanced home-delivered meals. The program is funded by the federal government through United Way of Miami-Dade. Transportation and Support Services Programs Title 1116 (Public Law 92-259)of the Older Americans Act of 1965, as amended, established the Activities Centers Program for the Elderly. The statute provides for the annual funding by the federal government of a maximum of 90% of the annual estimated costs, in excess of participant contributions, for establishing and operating programs to provide counseling and casework,transportation, education, social work, recreation and other services for persons age sixty and over. Federal funds are received locally through the Alliance for Aging, Inc. Matching funds are provided by donated services and rent. Supplemental funding is provided by voluntary contributions from participants. Management and General The administrative division of Little Havana is dedicated to the overall management of the operations of Little Havana, as well as to policy, research, development and fund-raising activities which address the social, economic and health needs of the disadvantaged elderly and their families. This division also seeks out new programs, which Little Havana can provide to improve and benefit the social, health and economic conditions of the elderly and their families. In the Administrative Division, Little Havana accumulates common expenses, such as administrative salaries, certain utilities and professional fees, which are allocated to certain programs as indirect costs based on the level of services provided and grant eligibility. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation The accounts of Little Havana are maintained in accordance with the principles of fund accounting. Under fund accounting, resources for various purposes are classified for accounting and reporting purposes into funds established according to their nature and purpose. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds have been combined and presented for Little Havana as a whole in accordance with Generally Accepted Accounting Principles(GAAP). GAAP requires Little Havana to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. In addition, Little Havana is required to present a statement of cash flows. Contributions received are recorded as unrestricted, temporarily restricted,. or permanently restricted support depending on the existence and/or nature of any donor restrictions. In addition, Little Havana recognizes only those contributed services which are provided by individuals possessing"specialized skills". 8 2. . .SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED). The net asset categories as reflected in the accompanying financial statements are as follows: Unrestricted Net assets which are free of donor-imposed restrictions: all revenues, expenses, gains and losses that are not changes in permanently or temporarily restricted net assets. Temporarily Restricted Net assets whose use by Little Havana is limited by donor-imposed stipulations which can be fulfilled or removed by actions of Little Havana pursuant to those stipulations. Permanently Restricted Net assets required to be permanently maintained and whose use by Little Havana is limited by donor-imposed restrictions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues, support and expenses during the period. Actual results could differ from those estimates. Significant estimates by management include the determination of the accrual for nursing home expenses of the Diversion program. It is at least reasonably possible that management's opinion on these estimates will change in the near term. Accrued Nursing Home Services Represent management estimated future cost for the program's participants that will require the use of nursing home facilities. The amount was calculated based on an actuarial report prepared for the Department of Elder Affairs. Investments Investments represent certificate of deposits which are carried at cost plus accrued interest, which approximates fair value. Support Substantially all of the support received is of a temporarily restricted,nature and can be used only for the specific purpose intended. 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 statement of activities as net assets released from restrictions. 9 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Temporarily Restricted Revenues Contribution from the United Way of Miami-Dade County was subject to use in future periods; Little Havana recorded the full pledge amount as temporarily restricted revenues in the Administrative Division. As the pledge is collected, a commensurate amount is released from restriction in the Administrative Division and transferred to various programs based on budgeted funding needs. On June 3, 2011, the pledge was extended for an additional year for approximately $245,000. The pledge is supplemented from time-to-time by additional allocations. On May 1, 2011, Little Havana purchased a bus to replace an existing bus used to provide transportation for the elderly for various service programs. The purchase price of this bus was approximately $73,000 which was paid with funds from Metro Dade County and was recognized as Temporarily Restricted Revenues. Depreciation is being charged against the bus, the amount of depreciation that is applied is being recognized as a release from temporary restrictions.As of December 31, 2011, depreciation charged for the bus was$8,563. Temporarily restricted revenues are comprised of the following: Temporarily Source Program Restricted Revenues United Way Allocation Elderly Meal Program $ 122,500 Metro Dade County Management&Support 73.395 $ 195,895 Permanently Restricted Revenue Miami Dade County (the "County') contributed on April 25, 2005, land located in unincorporated Miami Dade County for the construction of a senior activities and nutrition center to service the general public. The Land cannot be sold without written approval from the County. The land and any improvements will automatically revert to the County if the Land is sold without written approval or if not used and operated as stipulated by the County. Allowance for Doubtful Accounts Management believes that all receivables are collectible within one year therefore Little Havana has not included a provision for uncollectible accounts. Any accounts deemed uncollectible will be charged to expense when the determination is made. There were no uncollectible accounts during the year ended December 31, 2011 and 2010. Cash and Cash Equivalents For purposes of reporting cash flows, Little Havana considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. 10 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Donated Services and Rent Contributions of services are recognized in the financial statements if the services enhance or create non-financial assets or require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Donated rent is provided for spaces used by certain programs of the Organization rent free. Donated rent and services relating to the medical and job training programs, which would otherwise be performed by salaried persons, are reflected as both contributions and expenses in the accompanying statements of activities and functional expenses. Donated rent is recorded at the fair market value of the space being used and donated services are based on the estimated fair value of the medical and training services received. Donated rent and services were approximately$428,000 and$381,000 for the years ended December 31, 2011 and 2010 respectively. A number of volunteers have contributed their time to the activities of Little Havana without compensation. No amounts have been recognized in the statement of activities and functional expenses for the uncompensated volunteers'contribution because it is not feasible to determine the fair market value of these contributions. Fixed Assets Purchases of capital assets are recorded at cost. Assets purchased with resources with restrictions regarding their use and restrictions on the disposition of those assets are reported as restricted support. Little Havana reclassifies temporarily restricted net assets to unrestricted net assets by releasing the depreciation charged for those assets during the period. Normal repairs and maintenance are charged to expense as incurred. Depreciation is recorded as an expense of Unrestricted Net Assets and is computed on the straight-line method over 5-30 year estimated useful lives. Little Havana capitalizes assets with.a cost greater than $1,000 and a useful life greater than one year. Income Taxes The Internal Revenue Service has determined that Little Havana is exempt from federal income tax under Section 501(c)(3)of the Internal Revenue Code. Little Havana evaluate all significant tax position as required by generally accepted accounting principles in the United States. As of December 31, 2011, Little Havana does not believe that it has taken any tax position that would required the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. Little Havana's federal tax returns are currently open for examination by the Internal Revenue Service. Statute of limitation is generally three years. Date of Management review Little Havana has evaluated subsequent events through September 26, 2012, which is the date that the financial statements were available to be used. 11 3. GRANTS Little Havana records federal and state grants received directly and passed through other organizations as funding from the primary funding source. Below is a detail of federal and state financial assistance by funding source: Funding Source 2011 2010 Federal Government Alliance for Aging, Inc. $4,323,574 $ 3,913,663 City of Miami 327,848 184,576 City of Miami Beach 53,950 59,445 FEMA 108,460 119,186 Florida Department of Health 104,264 88,582 Florida Department of Elder Affairs 81,970 63,088 Florida Department of Transportation 66,055 73,645 National Coalition of Hispanic Health and Human Services Organization 15.000 4.075 Total Federal Government $ 5,081 JZ $4,506.260 Funding Source 2011 2010 State of Florida Alliance for Aging, Inc. $ 945,658 $ 550,361 Florida Department of Elder Affairs 2,075,100 - Agency for Workforce Innovation 80.282 75.244 Total State of Florida $ 3,101,040 $ 625.605 4. OTHER REVENUE SOURCES 2011 2010 United Healthcare Services, Inc. $1,034,650 $1,042,994 Jewish Home and Hospital for the Aged 370,316 364,895 Contributions and others 1,059,644 1,128,850 United Homecare Services, Inc. 197,755 189,733 Alliance for Aging, Inc 2,275,769 1,735,272 National Coalition of Hispanic Health and Human Services Organization 80.000 - 4 5. FAIR VALUE MEASUREMENT Generally accepted accounting principles establishes a framework for measuring fair value and expands disclosures regarding the use of fair value measurements. Under this standard, fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. Various inputs are used in determining the value of Little Havana's investments. These inputs are summarized into three levels: 12 5. FAIR VALUE MEASUREMENT(CONTINUED) Level - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level - Quoted prices in markets that are not considered to be active or financial instruments without quoted market prices, but for which all significant inputs are observable, either directly or indirectly; Level - Prices or valuations that require inputs that are both significant to be fair value measurement and unobservable. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Inputs may be observable or unobservable. Observable inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs that reflect the reporting entity's own assumptions about the assumptions market participant would use in pricing the assets or liability developed based on the best information available in the circumstances. Investments represents certificate of deposits which are not actively traded, however significant inputs are observable so they are considered level 2. The fair value measurement, based on the inputs used to determine their fair values on December 31, 2011 and 2010 are $3,312,435 and $3,946,537, respectively. 6. TEMPORARILY RESTRICTED NET ASSETS At December 31, 2011 and 2010, temporarily restricted net assets were as follows: 2011 2010 Health Care Programs Building Improvements $ - $ 4,067 Congregate Meal Programs Property and Equipment 2,390 - Day Care Programs Property and Equipment 25,300 24,780 Management and General Building(CDBG) 1,138,112 1,204,545 Buses 184,583 186,147 Land(Department of Elder Affairs) 600,000 600,000 Aid for future periods 122.500 _ 126.316 2.045.195 2.117.008 Temporarily Restricted Net Assets $ 9,079-085 $ 2;145 13 7. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2011 and 2010 are as follows: Building Construc- Furniture Improve- lion in Transpor- and Accum. Land ments Progress Building tation Equipment Total De rec. Net December 31, 2011 Balance Title III B $ - $ - $ - $ - $ 75,938 $ 22,887 $ 98,825 $ 98,825 $ - Title III C-1 - - - - - 27,671 27,671 25,281 2,390 Pro-Salud - 55,391 - - - 39,930 95,321 51,212 44,109 Corporate 2,528,673 1,258,824 3,499,773 1,993,002 1,529,337 128,143 10,937,752 2,957,692 7,980,060 Community Development - 150,070 - - - - 150,070 150,070 - CCE - - - 1,058 1,058 1,058 - ADC - 36,576 - - 45,282 - 81,858 71,510 10,348 Rainbow - 92,880 - - - 5,720 98,600 83,649 14,951 Home Health 24,780 24,780 20,896 3,884 Diversion - - - - - 4.172 4.172 4.172 - $lmaj41 $ 3,_499,773 $�- � t-254M $11.520,107 ` 3,464,395 $8,055,742 Building Construc- Furniture Improve- lion in Transpor- and Accum. Land ments Progress Buildina tation Equipment Total De°rec. Net December 31.2010 Balance Title III B $ - $ - $ - $ - $ 75,938 $ 22,887 $ 98,825 $ 98,825 $ - Title III C-1 - - - - - 25,015 25,015 25,015 - Pro-Salud - 43,766 - - - 39,930 83,696 43,280 40,416 Corporate 2,528,673 1,052,885 851,551 1,993,002 1,455,942 66,595 7,948,648 2,791,682 5,156,966 Community Development - 150,070 - - - - 150,070 146,003 4,067 CCE - - 1,058 1,058 1,058 ADC - 36,576 - - 45,282 - 81,858 69,072 12,786 Rainbow - 92,880 - - - - 92,880 80,886 11,994 Home Health 24,780 24,780 19,290 5,490 Diversion - - - - - 4.172 4.172 3.880 292 1.376.177 $ 851-551 1_q4 .00 -577.16? - 184,43Z $8,511.002 $ 3.278;9A1 *Due to funding received from the City of Miami in 1986 for the purchase of the land and building for the Rafael Villaverde Center, in the event that the property is sold Little Havana will have to refund$300,000 to the City of Miami. Depreciation expense was $185,372 and $178,684 for the years ended December 31, 2011 and 2010, respectively. 14 8. COMMITMENTS Little Havana leases space for certain programs under an operating lease expiring on October 31, 2015. Little Havana also leases copy machines under several thirty-nine month operating lease which expires on various dates. Rent expense, excluding donated facilities, was $267,020 and $219,452 for 2011 and 2010, respectively. Future commitments related to these leases are as follows: Minimum Lease Year Payment 2012 $239,570 2013 141,539 2014 118,313 2015 93,049 9. CONTINGENCIES Little Havana receives grants from the United States Department of Health and Human Services, United States Department of Agriculture, United States Department of Housing and Urban Development, United States Department of Labor, State of Florida, Miami-Dade County and other organizations that required compliance with certain provisions stated in their instruments of grant. Failure to comply with these provisions could result in the return of funds to the grantors. Although this is a possibility, management deems the contingency remote since; in their opinion, Little Havana has fully complied with the provisions of the grants. Little Havana is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position of Little Havana. 10. CONCENTRATION OF CREDIT RISK At December 31, 2011, Little Havana maintained excess deposits in banks totaling approximately $357,000 in the aggregate over the $250,000 insurance provided by the banks under the Federal Deposit Insurance Corporation. Little Havana has not experienced any losses in such accounts. 11. NOTES PAYBLE Little Havana entered into a $1,000;000 Community Development Block Grant ("CDBG") loan agreement with the Miami-Dade County Department of Housing to finance a portion of the construction cost of a project located at Hammocks Boulevard and Kendall Drive. The loan is for a period of three (3) years with monthly payments of approximately $27,800, including interest at a rate of 12% per annum. The agreement contained certain restricted covenants relating to the sale of the property and the completion of the project before March 3, 2013. If the Organization complies with all of the terms of the contract, the loan will be noninterest bearing, the monthly principal payment will be waived, and the principal amount will be forgiven at the end of the agreement. At December 31, 2011, the outstanding amount of the loan was $985,171. 15 i 12. CURRENT VULNERABILITY DUE TO CONCENTRATION Little Havana receives approximately 16% of its support through the Alliance for the Aging, Inc and approximately 54% from the Department of Elder Affairs for the Diversion Program. It is reasonably possible that in the near term these programs could cease, which could cause a severe impact on Little Havana and its ability to continue with its Congregate and Senior Center operations. Little Havana does not expect that the support from this nonprofit area agency on aging will be lost in the near term. In addition as of December 31, 20111 approximately 34% of due from funding agencies relates to grants receivable from the Alliance for the Aging, Inc. 13. CONDITIONAL PROMISES TO GIVE As of December 31, 2011, Little Havana has received from various funding agencies conditional promises to give for approximately $3,849,000 contingent upon Little Havana providing elderly services, including meals, case management, transportation services and construction of the senior center. 14. MATCHING REQUIREMENTS In accordance with the following grant agreements for Title IIIC-1, Title IIIC-2, and Community Care for the Elderly, Title IIIB, Pro-Salud, Preventive Nutrition Education and Title IIIE, Little Havana is required to match a certain amount of resources provided by the grants. For the year ended December 31, 2011 the matches were as follows: Home Delivered Congregate Transport Meals Meals Health and Support Day Care Program' Program2 Program3 Services° Programb Total- Grant Funded Program $1,302,196 $2,066,670 $745,531 $82 0,946 $279,407 $5,214,750 Costs United Way Match 49,173 213,907 263,080 Donated Services Match 106.491 85.000 931223 105,000 36.720 426.434 Total program costs $1,457 grn $2,385,57 838.754 $_q25,q4fi 5.904 z_ Includes Title IIIC-2, Community Care for the Elderly and Local Service Programs - Includes Title IIIC-1 and Local Service Programs 3= Includes Title IIID and Closing the Gap Programs 4= Includes Title IIIB, Transportation and Support Services 5= Includes Title IIIE, Local Service Programs and Child Care Program 15. REQUIREMENT OF DOEA AGREEMENT The Department of Elder Affairs (DOEA) agreement for the Nursing Home Diversion Program requires Little Havana to maintain a surplus (unrestricted fund balance) of not less than $1,500,000. As of December 2011 and 2010, Little Havana was in compliance with this requirement. In addition, Little Havana is required to maintain a restricted bank account of at least $100,000 for insolvency protection with an institution located in Florida. Little Havana is required to make monthly deposits equal to at least five percent of premiums received from the program until the balance equals two percent of the total contract amount. As of December 31, 2011 and 2010, the Company.maintains $1,231,164 in a restricted bank account. 16 16. DEFERRED COMPENSATION PLAN Effective January 1, 2008, Little Havana established a 457(f) Executive Deferred Compensation Plan (the "Plan") to provide a select group of management and highly compensated employees with supplemental retirement benefits as determined by the Board of Directors. Employees will become participants in the Plan as of the date the employer make an allocation to, the participant's account and employee will be vested in the account if they remain eployed by the employers as of January 1, 2013. The Plan is intended to be maintained at all time on an unfunded basis and the amount of benefits to be paid to the participants will be based on the formula described in the Plan's document under Appendix A. 17. RELATED PARTY TRANSACTION During the construction phase of the senior center and after a bidding process and approval of a selection committee, Little Havana hired and paid approximately $79,000 in supervisory fees to an engineering company related to a member of Little Havana's management. 17 toNtONNtDP POto .- V* N Ml-V t0000IT Cw)N h O) CO r- 03.-et tf)N N tD O tO N O O) CD t0 O V 0)O O to 00 CO)00 0 V IW OD Cr) ONNOPP V(O C)WP V P N G Ct OD to C14.to CD to M t-r M to .- P N P N N r r M M CI)NCO totO01oP0)V P N 03 PODtf)MOMCO 0)00) t0 P N ON NCD0(0 V Vv- Cn0) N N (O t0N0 CC;t000N C-i a0 CC;td N to P r CO P M O C.)co 0 W t>J O 0) 00 P O O OMT-10t-f-.C7V N - V- M N 00 1w r Iw r N N Ul N M b! 4N co O O co - t:0 CO CO ' t t t ^.. �- r P t•cR C tO r to to. 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Ci ap aD t Wap N �- P � O CO M N to O v) f7 M p r c0 O �f CO O v 1- f- f` fl- v) f� .- O r O N M O .- LO f- to N 1� f� fO M A V N N N cN O CID lD fA N h W O Co M N N in to O O 4 H r st CO .- t- tD CD N M N CD tD to M f� ... W O 1n co V — tO O to c0 N CO .- O OG E o v ac aD ( v c � � vi r; ao fri w V c0 M LO N M O c0 co r M Ln C O U Oa ui � z � � w r' N W ci W 0 o r- , v o co cn v v> a� o o L o r: co f• e7 tCl r c0 th m N tD v) O O co c0 LO r. M — r M v) 0 a0 N O O N (�O N ti � N M Ld Z 0 Z c0 N O O .- to 0) M M O M Z nU) C tND_ ' ' tIq Cq N � co LO' LO (O � , N w N M D (.1,. O O M (D N O M N to to N M v 0 , M M n ti LL w LL C T- c 0 Lu(V ~ LL W w o 0 0 It 0 ° ao rn °� c d o o^o , o ' o co�_ coo (? c �`LL w co m u i N '- ((O (OD• M (OD_ ° W O� C y m M F- F--c L N Z Z w w Lu Lu W Z � c o ° °o °' Goo °o o cO N O 0<0 O N ' ' Q O t0 ' M v) CO c0 ' c0 C �'4=CL w o vi ri tri �i N N M N (OD_ N 0 Q. LZ w C}, Vk (s Z C m V o to ao o r o co� CM w 00 co co w`i w>. CO C tD (O n ti I— Z w m vww it W rte n/ L O c0 N 4f ti � N �- n O Q w 0 V (c0V) ' Go Y ' (Ny ' INO tOO c 7 O O�i� C p O Q J LL N N N N m N N N c,) Q C O c0 t0 N O N Z Z o Q a 69 69 2 U ° ° o ° JO O c0 co LL U� v LL z W J 0 to w f7! ° v) u� o c c trn -� C q O O O r N C 7 7 e- •- C Z c° U � (A Ga U U) C o 0 H C O o m m d m Ul m CL H A m m L v a '� c N C eD m $ o 0 a c a w m O � u A t«o V m w �' of a o c = Ti ul tp o c 1L c ec a y y a = («a ;v W ti v sr o, a t= m in c 2 o 111V 1< PLLC 6303 Blue Lagoon Drive,Suite 200 a Miami,Florida 33126-6025 GLSC �C®MP x ,-lF=: certified p Ph:(305)373-0123•(800)330-4728 public accountants Fax:(305)374-4415 C www.gisccpa.com INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS EASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida We have audited the financial statements of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit Organization) ("Little Havana") as of and for the year ended December 31, 2011, and have issued our report thereon dated September 26, 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 Management of Little Havana is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Little Havana's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Little Havana's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Little Havana'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 a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of 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. 22 An Independent Member of BKR INTERNATIONAL Firms In Principal Cities Worldwide 1 , To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida Compliance and Other Matters As part of obtaining reasonable assurance about whether Little Havana's 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 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 to be reported under Government Auditing Standards. I This report is intended solely for the information and use of management, others within the entity, the Board of Directors, federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. G LSC Coot PLLc- September 26, 2012 23 GLSC &COMPANY, PLLC '. e �M certified public accountants x 6303 Blue Lagoon Drive,Suite 200 GLSC &COMPANY, PLLC { Miami,Florida 33126-6025 Ph:(305)373-0123•(800) 330-4728 certi red p ublic accountants Fax:(305)374-4415 F www.gisccpa.com INDEPENDENT AUDITORS'REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND CHAPTER 10.650, RULES OF THE FLORIDA AUDITOR GENERAL To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida Compliance We have audited Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) ("Little Havana")'s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement and Chapter 10.650, Rules of the Florida Auditor General, that could have a direct and material effect on each of Little Havana's major federal programs and state financial assistance projects for the year ended December 31, 2011. Little Havana's major federal programs and state financial assistance projects 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 and state financial assistance projects is the responsibility of Little Havana's management. Our responsibility is to express an opinion on Little Havana'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, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.650, Rules of Florida Auditor General. Those standards, OMB Circular A-133 and Chapter 10.650, Rules of the Florida Auditor General 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 and state financial assistance projects occurred. An audit includes examining, on a test basis, evidence about Little Havana'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 of Little Havana's compliance with those requirements. In our opinion, Little Havana 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 and state financial assistance projects for the year ended December 31, 2011. 24 An Independent Member of BKR INTERNATIONAL Firms In Principal Cities Worldwide To the Board of Directors of Little Havana Activities and Nutrition Centers of Dade County, Inc. (a nonprofit organization) Miami, Florida Internal Control Over Compliance Management of Little Havana is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs and state financial assistance projects. In planning and performing our audit, we considered Little Havana's internal control over compliance with the requirements that could have a direct and material effect on a major federal program or state financial assistance projects 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 and Chapter 10.650, Rules of the Florida Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Little Havana's internal control over compliance. 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 and state financial assistance projects 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 and state financial assistance projects will not be prevented, or detected and corrected, on a timely basis. Our consideration of 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. This report is intended solely for the information and use of management, others within the entity, the Board of Directors, federal and state awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. G LSC. 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V H a ,o ,o 5 a 08 o o ` `E° v ~ U) CO) � � °a, m a _ o � a •2 5 a 2 ; m a� m L. `° a o, a) to o, cn °? 2 °' in O t 0 a) •o Q E7co > > U ma c �' � 2 ` o m � ° eE m �' v�� voa8 Z La aai o Z pEE E ° v` c drm - `•° w my Q � c a. . a a U m o a J o� a . •o ca LL LL LL O m m yQ m .. O �i z � n a� Z LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE YEAR ENDED DECEMBER 31,2011 1. GENERAL The Schedule of Expenditures of Federal Awards and State Financial Assistance Projects included herein represent all of the Federal grant awards and state financial assistance projects of Little Havana Activities and Nutrition Centers of Dade County, Inc. ("Little Havana") over which Little Havana exercised direct operating control for the year ended December 31, 2011. 2. BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards and State Financial Assistance Projects (SEFA) is presented using the accrual basis of accounting and includes expenditures incurred by Little Havana during its calendar year beginning January 1, 2011 to December 31, 2011. The SEFA also includes the outstanding balance of the CDBG Notes Payable (See Note 11) as of December 31, 2011 that has continuing program compliance requirements. Substantially all federal grant awards and state financial assistance projects administered by Little Havana are operated on a reimbursement basis. Advances to grant awards programs are made from unrestricted cash balances included within Little Havana's pooled cash and investment account. 3. SCOPE OF AUDIT PURSUANT TO OMB CIRCULAR A-133 Federal Awards Program All Federal grant operations of the Little Havana are included in the scope of the Office of Management and Budget (OMB) Circular A-133 audit. The Single Audit was performed in accordance with the provisions of the OMB Circular A-133 Compliance Supplement(Revised March 2011, the Compliance Supplement). Compliance testing of all requirements, as described in the Compliance Supplement, was performed for the grant programs noted below. Little Havana qualifies as low risk auditee, based on guidelines listed in OMB Circular A-133. Accordingly, the programs listed below represents all Federal award programs tested to ensure coverage of at least 25 percent of federally granted funds. Actual coverage is approximately 68 percent of total cash and non-cash Federal award program expenditures. 2011 Major Federal Award Program Description CFDA No Expenditures Department of Health and Human Services Aging Cluster: Support Services–Title IIIB 93.044 $ 956,332 Nutrition Services–Title IIIC 93.045 2,303,231 Nutrition Services Incentive Program 93.053 711,149 Aging Home Delivered Nutrition Services for States—ARRA 93.707 5,863 Aging Congregate Nutrition Services for States—ARRA 93.705 16,104 Disease Prevention and Health Promotion Services –Title IIID 93.043 162.182 4.154_ 30 i LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL - ASSISTANCE PROJECTS FOR THE YEAR ENDED DECEMBER 31,2011 (CONTINUED) 3. SCOPE OF AUDIT PURSUANT TO CHAPTER 10.650, RULES OF THE FLORIDA AUDITOR GENERAL State Financial Assistance Projects All state financial assistance projects of Little Havana are included in the scope of Florida Single Audit. The State Single Audit was performed in accordance with the provisions of Section 215.97 of the Florida Statutes. Compliance testing of all requirements, as describes in the compliance supplement, was performed for the grant program noted below. These programs represent all state financial assistance projects and other grants with 2011 cash and non cash expenditures in excess of $500,000 that ensure coverage of at least 50 percent of state granted funds. Actual coverage is approximately 67 percent of total cash and non cash state financial assistance projects. 2011 Maior State Program Description CFDA No Expenditures Florida Department of Elder Affairs: Senior Center Fixed Capital Outlay 65.013 $2,075.100 4. FINDINGS OF NONCOMPLIANCE There were no findings of noncompliance identified in connection with the December 31, 2011 Single Audit. 5. AUDITS PERFORMED BY OTHER ORGANIZATIONS During the year ended December 31, 2011, various audits were performed by Federal, State and other agencies of Little Havana's administration of federal awards and state financial assistance programs. There were ten (10) issues noted by the Alliance for Aging on its monitoring report dated January 31, 2012, most of the findings are related to the operations of the Centers except for the requirement of re-screening and level-2 background checking of all employees and volunteers through Department of Elder Affairs (DOEA). Little Havana is screening its employees through the.Agency for Health Care Administration instead of DOEA as requested by the agency. Management has responded and is in process of correcting all findings noted by the Agency. 31 i LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31,2011 SECTION I-SUMMARY OF AUDITORS' RESULTS Financial Statements Type of auditors'report issued: Unqualified Internal control over financial reporting: Material weaknesses identified? No Significant deficiency(ies)identified not considered to be material weaknesses? No Non-compliance material to financial statements noted? No Federal Awards and State Projects Internal control over major programs and projects: Material weaknesses identified? No Significant deficiency(ies)identified not considered to be material weaknesses? No Type of auditors' 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? No Identification of major federal programs and state financial assistance projects: Federal Programs CFDA# Department of Health and Human Services Aging Cluster: Support Services–Title 11113 93.044 Nutrition Services–Title IIIC 93.045 Nutrition Services Incentive Program 93.053 Aging Home Delivered Nutrition Services for States—ARRA 93.707 Aging Congregate Nutrition Services for States—ARRA 93.705 Disease Prevention and Health Promotion Services –Title II ID 93.043 State Financial Assistance Programs Department of Elder Affairs: Senior Center Fixed Capital Outlay 65.013 Dollar threshold used to distinguish between Type A and Type B Programs: $300,000 Auditee qualified as low risk auditee pursuant to OMB Circular A-133? Yes 32 LITTLE HAVANA ACTIVITIES AND NUTRITION CENTERS OF DADE COUNTY, INC. (a nonprofit organization) SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31,2011 (CONTINUED) SECTION 11- CURRENT YEAR FINDINDS AND RECOMMENDATIONS A. FINDINGS-FINANCIAL STATEMENTS AUDIT None B. FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAMS AUDIT None C. OTHER FINDINGS-CURRENT YEAR None SECTION III-STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS None SECTION IV—MANAGEMENT LETTER REQUIRED BY RULE 10.654(1)(e)OF THE FLORIDA AUDITOR GENERAL There are no items related to State financial assistance required to be reported in the Management Letter during the fiscal Y ear 2011. 33 EXHIBIT 9SC99 "BU DG ET99 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 ® FY 2013/14 MIAMI BEACH CDBG Project Budget Sub-Recipient: Little Havana Activities&Nutrition Ctr. Project: Rainbow Please list all items that will be reimbursed by the City of Miami Beach. Line Item Quantity Onit Cost Personnel(Employees Only)-List Position Title $ - Ana P.Benedetti-Project Direcotr 1 2400 $ 2,400.00 Ena Padilla Lopez-Head Teacher 1 5636 $ 5,636.00 Yelitza C.Alvarez De Rangel-Senior Aide(PT) 1 2126 $ 2,126.00 Maria J.Aparicio-Senior Aide(PT) 1 2125 $ 2,125.00 Caridad Cuesta-Senior Aide(PT) 1 2016 $ 2,016.00 Fringe Benefits $ - FICA 14303 7.65% $ 1,094.00 SUTA 7,367 3.54% $ 261.00 Worker's Compensation 14303 0.486% $ 70.00 Group Insurance-Ena Padilla and Ana P.Benedetti 2 437.50 $ 875.00 Telephone 12 62 $ 744.00 Meals 2333 3.28 $ 7,653.00 Project Total- 000.00 I 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. 18 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. 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 $500,000 or more in a year in Federal awards must have a single or program- specific audit. One copy of the sub-recipient or vendors' audited financial statement shall be submitted to the City immediately following the end of the fiscal year(s) during which CDBG funds are received. All i and tees must submit to the Federal Audit Clearinghouse FAC a data collection form 9 ( ) (Form SF-SAC) and reporting package upon completion of the annual audit in accordance with OMB Circular A-133. The deadline for this submission is the earlier of the 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for the audit. Address for submission is: The Federal Audit Clearinghouse 1201 E. 10th Street Jeffersonville, IN 47132 Phone (301) 457-1551 or (800) 253-0696 Email: gov.faca-census.gov Web: http://harvester.census.gov/sac FARHCDI$ALLIHSG-CDICDBGICDBG 2013 2014 Public Services\LHANC 13141HANC Childcare Scope of Services.docx 19