HB 1079 2022
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to fiscal accountability for 2
nongovernmental entities; amending s 215.971, F.S.; 3
revising the required contents of agency agreements 4
that provide state financial assistance or federal 5
financial assistance to certain entities; requiring 6
certain nonstate entities that enter into agency 7
agreements funded with federal or state financial 8
assistance funds to comply with specified audit 9
requirements at specified intervals; providing an 10
exception; amending s. 215.985, F.S.; defining the 11
term "nongovernmental entity"; requiring 12
nongovernmental entities that have received specified 13
revenues from governmental entities to provide an 14
annual report to the Department of Management 15
Services; requiring the report to be verified; 16
requiring the department to an nually publish the 17
report information on its website beginning on a 18
specified date; requiring the nongovernmental entity 19
to publish the report information on its website; 20
requiring nongovernmental entities to submit certain 21
attestations before receiving go vernment funds; 22
providing applicability; creating s. 215.986, F.S.; 23
defining the terms "administrative expenses" and 24
"nongovernmental entity"; providing a limitation on 25
HB 1079 2022
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the amount of state-appropriated funds a 26
nongovernmental entity may expend on administr ative 27
expenses; requiring a nongovernmental entity to use 28
private entity funds before using state -appropriated 29
funds for certain purposes; providing an effective 30
date. 31
32
Be It Enacted by the Legislature of the State of Florida: 33
34
Section 1. Subsectio n (1) of section 215.971, Florida 35
Statutes, is amended, and subsection (4) is added to that 36
section, to read: 37
215.971 Agreements funded with federal or state 38
assistance.— 39
(1)(a) An agency agreement that provides state financial 40
assistance to a recipien t or subrecipient, as those terms are 41
defined in s. 215.97, or that provides federal financial 42
assistance to a subrecipient, as defined by applicable United 43
States Office of Management and Budget circulars, must include 44
all of the following: 45
1.(a) A provision specifying a scope of work that clearly 46
establishes the tasks that the recipient or subrecipient is 47
required to perform. 48
2.(b) A provision dividing the agreement into quantifiable 49
units of deliverables that must be received and accepted in 50
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writing by the agency before payment. Each deliverable must be 51
directly related to the scope of work and specify the required 52
minimum level of service to be performed and the criteria for 53
evaluating the successful completion of each deliverable. 54
3.(c) A provision specifying the financial consequences 55
that apply if the recipient or subrecipient fails to perform the 56
minimum level of service required by the agreement. The 57
provision can be excluded from the agreement only if financial 58
consequences are prohibited by t he federal agency awarding the 59
grant. Funds refunded to a state agency from a recipient or 60
subrecipient for failure to perform as required under the 61
agreement may be expended only in direct support of the program 62
from which the agreement originated. 63
4.(d) A provision specifying that a recipient or 64
subrecipient of federal or state financial assistance may expend 65
funds only for allowable costs resulting from obligations 66
incurred during the specified agreement period. 67
5.(e) A provision specifying that any balance of 68
unobligated funds which has been advanced or paid must be 69
refunded to the state agency. 70
6.(f) A provision specifying that any funds paid in excess 71
of the amount to which the recipient or subrecipient is entitled 72
under the terms and conditions of the agreement must be refunded 73
to the state agency. 74
7.(g) Any additional information required pursuant to s. 75
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215.97. 76
(b) In addition to the requirements contained in paragraph 77
(a), an agency agreement that provides state financial 78
assistance to a recipient or subrecipient that is a nonprofit 79
organization or a for -profit organization, as those terms are 80
defined in s. 215.97(2), or that provides federal financial 81
assistance to a subrecipient that is a nonprofit organization or 82
a for-profit organization, must include all of the following: 83
1. A provision specifying that funds will only be expended 84
in accordance with their stated purpose and for the benefit of 85
the public. 86
2. A provision prohibiting the funds from being loaned to 87
another entity for any purpose or donated as charitable or 88
political contributions. 89
3. A provision prohibiting the funds from being used for 90
bonuses, exit bonuses, incentive payments, or severance payments 91
to employees of a nonprofit organization or a for -profit 92
organization, except as provided in s. 215.986. 93
4. A provision prohibiting the funds from being used to 94
retain a lobbyist to represent the nonprofit organization or 95
for-profit organization before the legislative or executive 96
branch. However, a full -time employee of a nonprofit 97
organization may register as a lobbyist and represent the 98
organization before the legislative or executive branch. Except 99
as a full-time employee of a nonprofit organization, a person 100
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may not accept public funds from a nonprofit organization or a 101
for-profit organization for lobbying. 102
(4)(a) A nonprofit organization or a for -profit 103
organization that enters into an agency agreement funded with 104
federal or state financial assistance and derives 50 percent or 105
more of its revenue from federal or state funds must comply with 106
the audit requirements of this subsection. The results of each 107
audit must be submitted to the agency with which the 108
organization has an agreement. For purposes of this subsection, 109
federal or state financial assistance does not inclu de the 110
receipt of federal or state Medicaid funds. 111
(b) The nonprofit organization or the for -profit 112
organization shall have the following independent audits 113
conducted, as applicable: 114
1. For a nonprofit organization or a for -profit 115
organization that rec eives federal or state financial assistance 116
equal to or greater than $150,000 each fiscal year for 3 117
consecutive fiscal years, the organization must have a financial 118
audit, as defined in s. 11.45(1), completed by no later than 6 119
months after the end of the entity's third fiscal year. The 120
financial audit must be conducted by an independent auditor in 121
accordance with auditing standards stated in the rules of the 122
Auditor General. An audit under this subparagraph is not 123
required more frequently than once every 3 fiscal years. The 124
audit requirements of this subparagraph do not apply to a 125
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nonprofit organization or a for -profit organization during any 126
year in which the organization is required to conduct a state 127
single audit pursuant to s. 215.97. 128
2. For a nonprofit organization or a for -profit 129
organization that receives federal or state financial assistance 130
equal to or greater than $300,000 each fiscal year for 5 131
consecutive fiscal years, the organization must have an 132
operational audit, as defined in s. 11.45(1), completed no later 133
than 6 months after the end of the entity's fifth fiscal year. 134
The operational audit must be conducted by an independent 135
auditor in accordance with auditing standards stated in the 136
rules of the Auditor General. An audit under this subpa ragraph 137
is not required more frequently than once every 5 fiscal years. 138
3. For a nonprofit organization or a for -profit 139
organization that receives federal or state financial assistance 140
equal to or greater than $500,000 each fiscal year for 7 141
consecutive fiscal years, the organization must have a 142
performance audit, as defined in s. 11.45(1), completed no later 143
than 6 months after the end of the entity's seventh fiscal year. 144
The independent entity must have at least 5 years of experience 145
conducting performance audits, must conduct audits according to 146
applicable auditing or evaluation standards of appropriate 147
authoritative bodies, must follow applicable industry best 148
practices, and may not have any affiliation or financial 149
involvement in the reviewed organiza tion. An audit under this 150
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subparagraph is not required more frequently than once every 7 151
fiscal years. 152
(c) This subsection does not apply to a citizen support 153
organization or a direct -support organization created or 154
authorized pursuant to law and created , approved, or 155
administered by a state agency. 156
Section 2. Paragraph (d) of subsection (2) of section 157
215.985, Florida Statutes, is redesignated as paragraph (e), a 158
new paragraph (d) is added to that subsection, and subsection 159
(6) of that section is ame nded, to read: 160
215.985 Transparency in government spending. — 161
(2) As used in this section, the term: 162
(d) "Nongovernmental entity" means a nonprofit 163
corporation. 164
(6)(a) The Department of Management Services shall 165
establish and maintain a website that provides current 166
information relating to each employee or officer of a state 167
agency, a state university, a Florida College System 168
institution, or the State Board of Administration, regardless of 169
the appropriation category from which the person is paid. 170
1.(a) For each employee or officer, the information must 171
include, at a minimum, his or her: 172
a.1. Name and salary or hourly rate of pay. 173
b.2. Position number, class code, and class title. 174
c.3. Employing agency and budget entity. 175
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2.(b) The information must be searchable by state agency, 176
state university, Florida College System institution, and the 177
State Board of Administration, and by employee name, salary 178
range, or class code and must be downloadable in a format that 179
allows offline analysis. 180
(b)1. A nongovernmental entity that receives at least 50 181
percent of its revenue, calculated using the nongovernmental 182
entity's fiscal year, from governmental entities or a 183
nongovernmental entity that meets the audit threshold 184
requirements in s. 215.97 in any fis cal year, must submit to the 185
Department of Management Services by December 31 of each year a 186
report that includes the name, position, and all compensation 187
earned or awarded, whether paid or accrued, regardless of 188
contingency, to each director, board member , chief executive 189
officer, chief financial officer, chief operating officer, or 190
other person performing equivalent functions. The report must be 191
verified as provided in s. 92.525 by the chief executive officer 192
or chief financial officer of the nongovernmen tal entity. 193
2. Beginning February 1, 2023, and each February 1 194
thereafter, the Department of Management Services shall include 195
the information reported in subparagraph 1. on the website 196
established under paragraph (a). 197
3. A nongovernmental entity requ ired to submit a report 198
under subparagraph 1. must publish the reported information on 199
its website if the entity maintains a website. 200
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4. Before receiving funds from a governmental entity, a 201
nongovernmental entity that: 202
a. Received funding subject to th is paragraph in the 203
previous year must submit to the governmental entity an 204
attestation verified as provided in s. 92.525, that the 205
nongovernmental entity has submitted the report required in 206
subparagraph 1.; or 207
b. Did not receive funding subject to this paragraph in 208
the previous year must submit to the governmental entity an 209
attestation verified as provided in s. 92.525, that the 210
nongovernmental entity did not receive funding in the previous 211
year. 212
5. A governmental entity may not expend or transfer fun ds 213
to a nongovernmental entity until the nongovernmental entity has 214
complied with the requirements of this paragraph. 215
Section 3. Section 215.986, Florida Statutes, is created 216
to read: 217
215.986 Restrictions on administrative expenses for 218
certain nongovernmental entities. — 219
(1) As used in this section, the term: 220
(a) "Administrative expenses" mean expenditures that are 221
considered indirect operating costs of a nongovernmental entity, 222
including, but not limited to: 223
1. General administration and general expenses including 224
accounting, support services, and personnel, including all 225
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compensation earned by or awarded to such personnel, whether 226
paid or accrued, regardless of contingency, unless the 227
compensation is explicitly included in the General 228
Appropriations Act or the compensation relates to the employment 229
of an employee whose services are integral to a project or 230
activity of the nongovernmental entity. However, compensation 231
earned by or awarded to a director, board member, chief 232
executive officer, chief financial officer, chief operating 233
officer, or other person performing equivalent functions, 234
whether paid or accrued, regardless of contingency, shall not be 235
considered integral to a project or a ctivity of a nongovernment 236
entity. 237
2. Equipment and capital improvements, depreciation on 238
buildings, interest on debt associated with such buildings, and 239
operations and maintenance expenses. 240
(b) "Nongovernmental entity" means a nonprofit corporation 241
that receives at least 50 percent of its revenue, in any fiscal 242
year of the nongovernmental entity, from state -appropriated 243
funds, including state -appropriated federal funds. 244
(2) A nongovernmental entity may not expend more than 15 245
percent of state-appropriated funds, including state -246
appropriated federal funds, on administrative expenses. A 247
nongovernmental entity that receives funds from private entities 248
must first use the funds received from the private entities to 249
pay its administrative expenses before us ing state-appropriated 250
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funds, including state -appropriated federal funds. 251
Section 4. This act shall take effect July 1, 2022. 252