The financially responsible officer

What a qualifier carries without one

Start with the default, because the FRO only makes sense against it.

All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job. Florida Statute 489.1195(1)(a).

Three things, not one. Operations, field work, and money. Most qualifiers accept the first two knowingly and the third by accident, because it is the one nobody discusses at the point of signing.

What the designation moves

Upon approval by the board, a business entity may designate a financially responsible officer. A financially responsible officer shall be responsible for all financial aspects of the business organization and may not be designated as the primary qualifying agent. Florida Statute 489.1195(1)(b).

Where a business organization has a certified or registered financially responsible officer, the primary qualifying agent shall be responsible for all construction activities of the business organization, both in general and for each specific job. Florida Statute 489.1195(1)(c).

Read the two together and the trade is precise. You go from operations, field work and financial matters, to all construction activities. That is a genuine narrowing and it is written into the statute rather than into somebody's promise.

• Upon approval by the board. Not upon designation, not upon a handshake, and not upon a document sitting in a drawer unfiled.
• The FRO may not be the primary qualifying agent. It cannot be you.
• It does not have to be a corporate officer despite the name. DBPR defines it as a person other than the primary qualifying agent who assumes personal responsibility for the financial aspects of the business.

What it does not move, which matters more than people expect

An earlier version of this page said the designation does not touch licensing discipline. That was wrong, and wrong in the direction that would have misled you.

The board may take any of the following actions against any certificateholder or registrant if the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent, a financially responsible officer, or a secondary qualifying agent responsible under s. 489.1195 is found guilty of any of the following acts. Florida Statute 489.129(1).

Discipline is tied to what you are responsible for under 489.1195, which is exactly why the designation is worth having. It narrows what you can be found responsible for. It does not put you outside 489.129, and the FRO is named there in his own right.

• It moves regulatory responsibility, not civil liability. A supplier's claim, a lien under Chapter 713, a personal guaranty you signed, an indemnity in your qualifying agreement: none of those are affected by anything in 489.1195. If you have signed something personally, the designation does not unsign it.
• It is prospective. Under Florida Statute 489.1195(3)(d) a change in status operates forward only, so it protects you from the date it is approved and not before.
• It does not survive the officer. If the company does not appoint a replacement, the financial responsibility returns to the primary qualifying agents, jointly and equally.

What it costs, and why the company will resist

This is the section the earlier version of this page did not have, and its absence made the whole thing sound easier than it is. If you are going to ask a company for this, know what you are asking for.

If the business organization has a financially responsible officer, the financially responsible officer shall comply with the requirement of subsection 61G4-15.006(1), F.A.C., and shall provide to the Department a bond or irrevocable letter of credit, in the amount of $100,000 payable to the Board for fines and costs. Rule 61G4-15.0021(2), Florida Administrative Code.

• A $100,000 bond or irrevocable letter of credit, payable to the Board.
• A current consumer credit report with no unsatisfied judgments or liens, and a FICO-derived credit score of 660 or higher, or completion of a fourteen hour Board-approved financial responsibility course, under Rule 61G4-15.006.
• A $200 application fee, electronic fingerprints, and proof of satisfaction of any liens, judgments or bankruptcy discharge, per DBPR form CILB 8.
• Board approval, which takes as long as it takes.

So when a company hesitates, it is usually not evasiveness. It is a hundred thousand dollars of exposure and a personal credit check on somebody who was not expecting one. Understanding that changes how you ask.

One clarification on a point that is widely repeated. Florida Statute 489.1195(1)(d) directs the Board to adopt rules prescribing net worth, cash and bonding requirements for financially responsible officers, at least as extensive as those for qualifying agents. What the Board actually adopted is the credit test and the bond above. There is no net worth test in the rules. If somebody tells you an FRO must show a certain net worth, ask them where.

What you give up

Nobody mentions this half, and you should decide about it deliberately rather than discover it afterwards.

The application for a qualifying agent must include an affidavit attesting that the applicant has final approval authority for all construction work performed by the business organization and that the applicant has final approval authority on all business matters, including contracts, specifications, checks, drafts, or payments, regardless of the form of payment, made by the business organization, except where a financially responsible officer is approved. Florida Statute 489.119(2)(b)1.

Except where a financially responsible officer is approved. The authority and the responsibility move together. Once an FRO is in place, final approval on contracts, checks and payments is theirs, and under 489.119(2)(b)2 they swear their own affidavit saying so.

For most qualifiers that is a good trade, because the money was never the part they could realistically supervise. But it is a trade, and it means the person you help put in that chair is someone you now depend on.

You are not removing a risk. You are moving it onto somebody who had to prove they could carry it.

How to actually get one in place

• Raise it before you sign anything, not after. It is far easier to make a condition of the arrangement than to introduce later.
• Name the cost yourself, so the company hears it from you rather than from the form. A hundred thousand in bond or letter of credit, a credit check, and a fee.
• If this is an initial qualification, the FRO application is filed at the same time as the business qualification under Rule 61G4-15.002(4), not afterwards.
• Get the approval, not the promise. Ask to see the Board's approval, and do not treat a filed application as a designation.
• Know when it changes. Rule 61G4-15.007 requires notification within thirty days of a qualifying person ceasing to be affiliated, and within forty-five days of changes to the information on the business qualification application. Failure to report shall result in disciplinary action.