Clerk of the Circuit Court Board of County Commissioners Marion County
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1 Clerk of the Circuit Court Post Office Box 1030, Ocala, Florida Telephone: (352) The Honorable, individually, Clerk of the Circuit Court AUDIT REPORT NO : GRANT COMPLIANCE REVIEW-ATHEROS COMMUNICATIONS, INC. Enclosed is the Internal Audit report regarding the first grant compliance review of Atheros Communications, Inc. pursuant to the related Economic Development Finance Incentive Grant agreement. This report will be presented on the consent agenda at the next meeting of the Board of County Commissioners. Should you have any questions or require more information, please let me know. c: Lee A. Niblock, County Administrator DRE/ww Enclosure
2 Clerk of the Circuit Court Post Office Box 1030, Ocala, Florida Telephone: (352) Lee A. Niblock, County Administrator, Clerk of the Circuit Court GRANT COMPLIANCE REVIEW: ATHEROS COMMUNICATIONS, INC. Enclosed is the Internal Audit report regarding the Internal Audit review of Atheros Communications, Inc. first annual report pursuant to the Economic Development Financial Incentive Grant agreement. The has concluded that Atheros has timely complied with the applicable sections of the grant agreement and that the County has paid the related $85,000 grant portion. The County is not yet required to provide the $15,000 matching QTI grant. Please let me know if you have any questions or require more information,
3 Clerk of the Circuit Court Post Office Box 1030, Ocala, Florida Telephone: (352) , Clerk of the Circuit Court Wallace K. Watford, ECONOMIC DEVELOPMENT FINANCIAL INCENTIVE GRANT COMPLIANCE REVIEW: ATHEROS COMMUNICATIONS, INC. (GRANTEE) awarded to Intellon Corporation on August 4, 2009 an Economic Development Financial Incentive Grant in the total amount of $100,000. This consisted of $85,000 for relocation expenses and $15,000 as County s match for the State of Florida s Qualified Target Industry (QTI) Tax Refund program. Intellon was subsequently acquired by Atheros Communications, Inc. on December 15, The grant agreement was amended on May 18, 2010 to substitute Atheros as grantee; no other grant terms and conditions were affected. Atheros is required, in summary, to timely provide capital improvements at the identified premises at a cost of at least $950,000, upon completion of which the $85,000 would be payable. In addition, Atheros must: maintain its existing 60 full time equivalent (FTE) employees (minimum annual average salary of $100,000 and minimum annual total payroll of $6,000,000); then add 10 FTEs within the next three years; and thereafter maintain 70 FTEs with minimum annual average salary of $100,000 for remainder of agreement. Atheros is also required throughout the agreement term to submit annual reports to the County to establish grantee s compliance with specified requirements. Atheros timely submitted the first required annual report with substantiating documentation. Atheros asserted that it has complied with the applicable sections of the grant agreement that are presently required to be achieved. Atheros presently maintains 61 FTEs that exceed the required minimum average and total salaries. Grantee has until December 1, 2012 to employ and maintain the minimum average of 70 FTEs. Atheros had previously provided substantiation of the required capital improvements and has already received the $85,000 portion of the grant. Internal Audit had previously concluded that grantee was due this amount (per attached memo dated May 5, 2010). REPORT NO
4 GRANT COMPLIANCE REVIEW: ATHEROS COMMUNICATIONS, INC. Internal Audit reviewed the Grantee s annual report and the submitted substantiating documentation. This included telephone and written contact with Atheros personnel for clarification and additional documentation. We have concluded that Atheros has timely complied with the applicable sections of the grant agreement. Grantee had previously met the capital improvements requirement and the County has paid the related $85,000 grant portion. Grantee has met the minimum FTEs, average salaries and total salaries that are presently required. The County is not yet required to provide the $15,000 matching QTI grant. This review was conducted by Wallace Watford and Darla Smith. We want to thank the representatives of Atheros Communications, Inc. for their cooperation during our review. Attachment c: Lee A. Niblock, County Administrator Bill Kauffman, Administrative Services Bureau Chief Rick Michael, Economic & Small Business Development Manager John Schaefer, Fiscal Manager REPORT NO Page 2
5 Clerk of the Circuit Court Post Office Box 1030, Ocala, Florida Telephone: (352) Lucienne Gaufillet, Sustainable Growth Manager Wallace Watford, DATE: May 5, 2010 INTELLON/ATHEROS EDFIG GRANT COMPLIANCE Thank you for the opportunity to review the Grantee s submission of documentation to support costs of capital improvements. As required by the Economic Development Grant Agreement (section 2.2), Intellon Corporation (acquired by Atheros Communications, Inc.) has submitted its request for payment of $85,000. The documentation was to support the requirements of section 3.2 that capital improvements at the identified premises were provided at a cost of at least $950,000. We have concluded that Grantee has timely complied with the applicable sections of the grant agreement and is due the requested amount of $85,000. We note that the Substantial Completion Date identified in the agreement (section 1.6) is established as December 1, 2009 (the Certificate of Occupancy date), which makes December 1, 2012 the identified Achievement Date. These dates are important to determine compliance with the Grantee requirements to employ at least 10 full time equivalent employees (FTEs) in addition to maintaining the 60 FTEs currently employed by grantee at date of the agreement (per sections 3.3, 3.4 and 3.5). The Grantee is also required to provide average annual payrolls in specified amounts. We also note that the effective date of the lease for the Premises is also December 1, 2009, which is the lease commencement date identified in the submitted Tenant Acceptance Agreement. We further note that the Grantee is required to submit annual reports on each anniversary of the date of the grant agreement; therefore, the first report is due on August 4, Darla Smith and I will thereafter conduct our compliance review of Grantee s required employment and payroll. c: Bill Kauffman, Administrative Services Bureau Chief John Schaefer, Fiscal Manager ATTACHMENT
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