CDBG Disaster Recovery KEYS TO EFFECTIVE GRANT ADMINISTRATION
CDBG Disaster Recovery • 4 Keys to Effective Grant Administration – Assessing Capacity (including your partner’s capacity) – Procurement – Monitoring – Financial Controls and Procedures
Assessing Capacity • Grant Management History • Staffing • Financial and Tracking Systems • Contractor Oversight • Final Assessment—Hire Internally or Contract Out?
Subrecipient or Contractor? • What is a Subrecipient? Public or private nonprofit agency, authority or organization, or community-based development organization, receiving CDBG funds from the recipient to undertake CDBG eligible activities (see 24 CFR 570.500(c))
Procurement Subrecipient Contractor • Designated by the • Must be selected through a Selection grantee. competitive procurement process. • Federal administrative • Must achieve performance Monitoring and monitoring goals identified in the & Performance requirements contract. described in 24 CFR Parts 84 and 85.
Monitoring/Oversight for Disaster Recovery Using CDBG Disaster Recovery funds, both state and local governments may carry out eligible activities directly through employees or contractors or award funds to other local governments and subrecipients, as applicable. In all cases, the grantee must oversee compliance with • Eligibility of activities through regulations and waivers National Objectives, including different conditions for Urgent Need • • Identification of how activity addresses a need from the Disaster • Prevention of duplication of benefits from FEMA, SBA, Insurance, and other sources
Components of Monitoring/Oversight for Disaster Recovery • Procurement and Performance Review – Activities undertaken through contractors must achieve performance goals and still ensure compliance with applicable federal requirements • Technical assistance- A description of how the grantee will provide for increasing the capacity of grant recipients, subrecipients, subgrantees, and any other entity responsible for administering activities under this grant • Internal audit function – A function reporting independently to the chief officer or board of the governing body of any designated administering entity that evaluates operations to prevent fraud, waste, or abuse Reporting efforts to prevent fraud, abuse, and mismanagement of funds- Screens • are in DRGR to identify monitoring, audit, and technical assistance and summary is included summarized quarterly in its performance report to HUD • Monitoring standards and procedures – Grantee should include process to identify and tie to disaster and non-duplication of benefits
What does HUD look for when reviewing Grantee Monitoring/Oversight? Each grantee must have • A method to select recipients for review • Evidence that the frequency of review is adequate • Evidence that the review by the State examined all necessary items • Evidence to support the grantee’s monitoring/review conclusions reached • Evidence that the results of reviews, particularly negative findings, were communicated to local governments/subrecipients
What does HUD look for when reviewing Grantee Monitoring/Oversight? Grantees must maintain records to determine whether the program is • being carried out in accordance with the grantee's certifications, the requirements of the HCDA, and other applicable laws. • Grantees are required to conduct reviews of (sub)recipients/local governments to ensure compliance with applicable laws. • HUD expects grantees to review contracts to ensure contract deliverables and milestones will be tracked and met to demonstrate reasonableness of costs. • Grantees use the DRGR Admin Module to capture the status of their monitoring events. • Records demonstrate that the State has conducted reviews sufficient for the grantee to determine whether subrecipients/local governments are in compliance.
CPD MONITORING HANDBOOK: Sample Exhibits for Monitoring CDBG DR Grantees HUD encourages grantees to review the CPD Monitoring Handbook posted on HUD’s website to understand what HUD reviews during grantee monitoring visits. The tool includes monitoring checklists on core disaster recovery topics: Buyouts New Construction of Housing Infrastructure Economic Development Procurement 1 Written Agreements Housing Repair, Rehabilitation, and Reconstruction
Financial Controls • Financial management regulations – Title 24, Part 570 of the Code of Federal Regulations: Housing and Urban Development (CDBG regs) – Title 24, Part 85: Administrative Requirements For Grants And Cooperative Agreements To State, Local And Federally Recognized Indian Tribal Governments (or the state’s equivalent) – OMB Circular A-87, Attachment C, State/Local-Wide Central Service Cost Allocation Plans – OMB Circular A-133 Single Audit
Financial Controls (cont.) • CDBG regulations require grantees the following financial controls : • project costs are reasonable • sources of project financing are committed • CDBG funds are not substituted for non-Federal financial support • project is financially feasible • funds are disbursed on a pro rata basis with other finances provided to the project • grantees maintain sufficient records to demonstrate the state has met the standard requirements
Financial Controls (cont.) • CDBG Grant Administration require grantees to ensure • amounts budgeted are for eligible activities • funds are obligated when contracts are executed; purchase orders issued • access to information on obligations readily available • grantees maintain adequate source documentation • sample of expenditures are reviewed to determine whether they are supported by invoices, contracts, or purchase orders
Financial Controls (cont.) Internal Controls • Organizational chart demonstrates established lines of responsibility/approving authorities • Key employees duties are well defined • Approval controls provide reasonable assurance that appropriate individuals approve transactions • Transactions and events are properly documented, recorded, and auditable
Financial Controls (cont.) • Administrative Costs – All funds have been spent only for reasonable and necessary costs of program operation; and – Program funds have not been used for general expenses of state or local government • Procedures – Procedures support the ability to prepare financial statements are fairly presented in – Financial statements conform with generally accepted or other relevant and appropriate accounting principles and regulatory requirements
Financial Controls (cont.) • Grantees and subrecepients that receive disaster recovery funds must – Comply with applicable Federal, state and local laws, regulations, standards, and procedures – Conduct financial management methods and procedures in accordance with Generally Accepted Government Auditing Standards (GAGAS) • Grant administrators must prepare accurate and timely reports • Grantees must monitor all financial management practices
Financial Controls (cont.) • Administrative Costs – Salaries/Wages and Indirect Costs – Charges for salaries and wages must be based on payrolls documented and approved by a responsible official(s) of the governmental unit – Salaries and wages where employees are expected to work solely on a single federal award will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification – Indirect costs must be billed in accordance with an approved Cost Allocation Plan or agreed upon Indirect Cost Rate pursuant to OMB Circular A-87, Attachment A, Section F
Financial Controls (cont.) OMB Circular A-133 Single Audits • Participants (or subrecipients) that expend more than $500,000 in Federal funds must have a single audit conducted • Participant’s A-133 audit report must include – an opinion on whether the financial statements conform with generally accepted accounting principles – whether the participant has complied with the laws, regulations, and provisions of contracts or grant agreements • Participant’s must implement corrective actions to resolve findings
Effective Grant Administration
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