COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)

SUBRECIPIENT WORKSHOP

FY 2015-2016

October 2014

Santa Ana, CA

CDBG SUBRECIPIENT TRAINING

Overview of CDBG

Anticipated Timeline

Key Considerations

Grant Requirements

Monitoring

Considerations

Community Development Block Grant (CDBG) in 3 minutes

OVERVIEW OF CDBG

The Community Development Block Grant Program

was established by an Act of Congress, through the

Housing and Community Development Act of 1974.

The purpose of the CDBG program is to develop

viable urban communities by providing decent

housing, a suitable living environment, and

expanding economic opportunities, principally for

persons of low and moderate income.

Provides local governments with the flexibility to

address the broad range of needs within lower-

income neighborhoods.

OVERVIEW OF CDBG

The City is considered an “Entitlement Community”

and receives its own annual allocation of CDBG

funds. (FY 2014-15 allocation $5,560,186)

The City has the option to elect to spend up to 15%

of its annual allocation on public service activities.

Subrecipients are entities that are provide CDBG

funds by a grantee for their use in carrying out

agreed-upon eligible activities.

ANTICIPATED TIMELINE

Date Steps

September 22 Outreach Efforts Commenced

October 6 - November 14 Application Period (6-weeks)

October 7 - 15 Mandatory CDBG Subrecipient Training

November 14Applications Due by 5 PM at City Hall 6th

Floor

November 17 – December 17Application Review – Community Redevelopment & Housing Commission (CRHC)

December 17Tentative

Presentations to CRHC

February 2015 Recommendations to FEDT

March 2015 Recommendations to City Council

KEY CONSIDERATIONS

How will subrecipients use CDBG to serve a public benefit?

Does the subrecipient have the programmatic and financial capacity to administer the grant?

Is a reasonable benefit accrued to the City as a result of the public service provided by the subrecipient?

REQUIREMENTS

Public service programs are eligible under 24 CFR 570.201(e)

An activity must meet a National Objective

Must meet a City of Santa Ana Strategic Plan Goal

Detailed goals are listed in the application

Must meet a Consolidated Plan Priority Need

Will be determined in March

NATIONAL OBJECTIVE - LMC

Public service programs that benefit low - and

moderate income persons are eligible under

24 CFR 570.208(a)(2)(i)–A, B, C, or D.

NOTE: Failure to document compliance with the National

Objective specified for your grant may result in the

disallowance of costs (i.e. the repayment of grant funds or

the denial of invoices submitted).

NATIONAL OBJECTIVE APPLICATION DOCUMENTATION

570.208(a)(2)(i)

Limited Clientele

Activities

PUBLIC SERVICE

PROGRAMS

TYPICALLY FIT IN

THIS NATIONAL

OBJECTIVE

Benefit of clientele who are generally

presumed to be principally L/M persons.

The benefits of this type of activity are

limited to a specific group of people.

(A) - Elderly persons

- Abused children

- Battered spouses

- Homeless persons

- Severely Disabled Adults

- Illiterate adults

- Migrant farm workers

- Persons with Aids

- Driver’s License; or

- Birth Certificate; or

- California Identification Card; or

- Documentation establishing that the

facility or service is designed for and

used by senior citizens.

Documentation describing how the

nature and location of the facility or

service establishes its use,

predominantly by L/M income

persons.

- Intake assessment during the

application process determines

qualification under this category.

(B) – Require income so that it is evident

that at least 51% of the clientele are

persons whose family income does not

exceed the L/M limit; or

(C) – Have income eligibility requirements

which limit the activity exclusively to L/M

persons; or

- Data showing the number of

household members and annual

income of EACH MEMBER over the

age of eighteen, living in the

household, that contributes income

to the household.

(D) – Be of such a nature and location that

it may be concluded that the activity's

clientele will primarily be L/M income

persons.

- Documentation describing how the

nature and the location of the facility

or service establishes its use,

predominantly by L/M income

persons.

NATIONAL OBJECTIVE APPLICATION DOCUMENTATION

570.208(a)(1) Area

Benefit Activities

An activity which meets the identified needs

of L/M income persons residing in an area

where at least 51% of the residents are L/M

income persons. The benefits of this type of

activity are available to all persons in the

area regardless of income.

- A log with names and address corresponding

with census tracts and block group(s) in the

service area.

- The boundaries of the service area generally

defined using census tracts and block groups.

- The service area corresponds to the area

were clients served by the program reside.

- Residency verification such as utility bill,

California Identification, Driver’s License,

Senior Identification.

24 CFR

570.208(a)(2)(iii).

Microenterprise

Activities

A microenterprise assistance activity carried

out in accordance with 570.201(o) with

respect to those owners of microenterprises

and persons developing microenterprises

assisted under the activity during each

program year who are low- and moderate-

income persons. Such persons determined

to be low- and moderate-income may be

presumed to continue to qualify as such for

up to a three-year period.

- Full income determination in accordance with

24 CFR Part 5 – Annual Income.

570.208(3) Housing

Activities

An eligible activity carried out for the

purpose of providing or improving

permanent residential structures which,

upon completion, will be occupied by low-

and moderate-income households.

Acquisition

Rehabilitation

New Construction

- Intake assessment during the application

process determines qualification under this

category.

- Data showing the number of household

members and annual income of EACH

MEMBER over the age of eighteen, living in

the household, that contributes income to the

household.

NATIONAL OBJECTIVE - LMC

24 CFR 570.208(a)(2)(i)A

A) Presumed Groups: Activities that benefit a clientele who are generally presumed to be principally low - and moderate -income persons, including the following:

Abused Children, battered spouses, elderly persons, adults meeting the Bureau of the Census’ Current Population Reports definition of “severely disabled”, homeless persons, illiterate adults, persons living with AIDS, and migrant farm workers.

24 CFR 570.208(a)(2)(i)B

B) Income Documentation: Requires obtaining verifiable certification from the assisted person that his/her family income does not exceed the applicable income limit and supporting documentation on family size and income so that it is evident that at least 51% of the clientele are persons whose family income does not exceed the low-and moderate -income limit.

NATIONAL OBJECTIVE - LMC

24 CFR 570.208(a)(2)(i)C

C) The program has income eligibility requirements which limit the

activity exclusively to low - and moderate - income persons.

24 CFR 570.208(a)(2)(i)D

D) Be of such a nature and be in such a location that it may be

concluded that the activity’s clientele will primarily be low-and

moderate-income persons (i.e. a service activity that serves

only a Section 8 apartment complex).

REIMBURSEMENT GRANT

Cost Reimbursement Agreement

Insurance Required: General Liability in the amount of

$1,000,000 naming the City of Santa Ana as Additional

Insured, Auto, Workers Compensation

Santa Ana Business License & Certificate of Occupancy

Quarterly request for reimbursement for direct

costs associated with the program

Only eligible expenses listed in the agreement

budget will be reimbursed

REIMBURSEMENT GRANT

Must provide documentation for expenses for reimbursement:

Salaries: Timecards with hours worked, payroll records, benefits statements, canceled checks

Material and Supplies: Invoices, canceled checks, procurement documentation

Other Direct Costs – Must present a cost allocation plan to be approved by City of Santa Ana Finance Department

CLIENT FILES

Subrecipient must maintain a client file for each person served each funded program year?

Client file should include the following items:

Intake Form containing all HUD-required information

Proof of service provided to the clientsign-in sheets, case worker’s write-ups, etc.

Client-Qualifying Documentation (If Applicable)

Does the intake form collect all HUD-required information?

Age Verification (if Presumed National Objective – Elderly Persons, 62 or over)

Household Size

Household Income

Name, age and income of all family members residing in the household

Female Head of Household

Race/Ethnicity

Disabled

CLIENT INTAKE

IMPORTANT

John Smith 07/15/14

123 Main St. Santa Ana XXXXX

000 000-0000 myemailaddress@yahoo.com00/00/00 14 X

X

X

X

X

Applicant Name

Guardian Name

Staff Name Guar di an Si gn

St af f Si gn

07/15/14

07/15/14

07/15/14

The participant

name must be that

of the person who

is receiving the

service.

Please verify that one

(1) box is checked in

each section.

The date must

be within the

current CDBG

Program Year

(07/01/14 -

06/30/15)

Please verify that

the applicant

signs, or head of

household is

signing the intake

form if the

applicant is under

18 years old.

Verify that the

applicant circles

the correct

household size

and income

amount.

The person who

verifies that the

information on the

intake form is correct

must date, print and

sign their name

Weekly - 7 day

pay period,

multiply avg.

gross by 52

Bi-Weekly – 14

day pay period,

multiply avg

gross by 26

Bi-Monthly - 1st

– 15th and 16th

to 30th/31st –

multiply avg.

gross by 24

Use gross not

net amount

when calculating

income.

SAMPLE

PAYSTUB

Brenda Smith

John Smith Sr.

Stacy Smith

400.00 375.00 378.85 1,153.85 384.62

384.62 20,000.24

423.08 500.00 0.00 923.08 461.542

461.54 12,000.04

208.33 0.00 0.00 1 208.33

208.33 4,999.92

208.33

$ 37,000.02

Please be sure

to verify the

household size

and income are

correct on the

applicant intake

form.

An example of a

person who

receives a week,

bi-weekly and

semi-monthly

paycheck.

Please obtain

three (3) pay-

stub amounts.

QUALIFYING DOCUMENTATION

If presumed, client eligibility supporting documentation:

Statement of abuse (abused children/battered spouses)

Age verification (elderly persons)

Statement of disability (severely disabled persons)

Statement of homelessness (homeless persons)

Program Determination of Literacy (illiterate adults)

Statement of Medical Condition (persons living with AIDS)

Verification of Migrant Farm Worker Status (migrant farm workers)

If limited clientele:

Income documentation for all persons working in the household

Please use as a

reference for examples

of proof of income

documentation; which

would be represented

on the “Income

Calculation” worksheet.

PROOF OF SERVICE

Documentation showing dates when service was

provided to the client. These may include:

Sign-In sheets

Case worker’s write-ups

Timesheets – that can be traced back to the services

provided

Access to client tracking database

INCOME LIMITS

Program must serve at minimum 51% low- and

moderate- income individuals.

The HUD Income Limits are revised each program

year. Typically this has been in the month of

December.

The income limits are based on the area median

income (AMI) adjusted for household size.

For the CDBG Program, the maximum household

income allowable is 80% of the AMI adjusted for

household size.

2014 INCOME LIMITS

*Effective Date: December 18, 2013

Orange County, California

FY 2014

Income

Limit Area

Median

Income

FY 2014

Income

Limit

Category

1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person

Orange

County $84,100

Extremely

Low Income

(0%-30%)

$19,000 $21,700 $24,400 $27,100 $29,300 $31,450 $33,650 $35,800

Low Income

Limits

(31%-50%)

$31,650 $36,150 $40,650 $45,150 $48,800 $52,400 $56,000 $59,600

Moderate

Income

Limits

(51%-80%)

$50,600 $57,800 $65,050 $72,250 $78,050 $83,850 $89,600 $95,400

QUARTERLY PERFORMANCE REPORTS

Subrecipient are required to report programmatic accomplishments by the 15th day of the month following the end of each quarter.

QPRs must report new clients served

Q1 - July 1-September 30 (Due Oct. 15)

Q2 – October 1-December 31(Due Jan. 15)

Q3 – January 1-March 31 (Due April 15)

Q4 – April 1 – June 30 (Due July 15)

NOTE: QPRs and Payment/Reimbursements Requests will be due on

the 15th day of the month following each quarter. If the 15th falls on a

weekend or a City-recognized holiday, the documents must be

submitted on the following business day no later than 9:00 A.M. Failure

to submit QPRs may result in the possible suspension of CDBG funds

and/or the termination of your agreement with the City.

Agency A

Program A

10

10

0

0

0

0

0

0

0

0

20

5

0

0

0

0

0

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0

0

20

5

0

0

0

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0

0

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5

15

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20

20

0

0

20

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10020%

50 50

Employee NameEmpl oyee Si gn

ADMINISTRATION

Program files must be maintained by the organization.

Contract

Program Policies and Procedures

Insurance Information

Financial Data

Quarterly Performance Reports

Contract Amendments

ADMINISTRATION

Program Policies and Procedures

Overview of your program

Client eligibility requirements

Program Procedures

Client Intake and Client Files

Annual Income Guidelines

Submittal of Quarterly Performance Reports (QPR)

ADMINISTRATION

Financial Policies and Procedures

Internal Controls

Organization Chart & Job Descriptions

Financial Procedures

Timecards

Submittal of Reimbursement Requests

Annual Audit

Salaries $50,000 $10,000

Agency A

Pogram A123 Main St.

Employee NameEmpl oyee Si gn

Employee Title

$0 $10,000$20,000 $10,000 $20,000

Employee NameEmpl oyee Si gn

Employee Title

ADMINISTRATION

The programmatic requirements of the CDBG program can be found at 24 CFR Part 570.

The uniform administrative requirements of 24 CFRPart 84 (Non-Profit) and 85 (Government) must be followed.

Other programmatic requirements:

Conflict of Interest

Equal Employment Opportunity Act

AUDIT TRAIL (FINANCIAL)

The City allows subrecipients to be reimbursed for

direct personnel costs (salary and benefits of

program staff members who work directly on the

CDBG-funded program).

The City will permit the purchase of supplies and

material directly related to, and to be used

exclusively for the CDBG-funded activity upon prior

notification of purchase of said items.

Other expenses must be pre-approved by City of

Santa Ana Finance Department. Cost allocation

plan is required.

AUDIT TRAIL (FINANCIAL)

Can you show where the money goes?

Maintain Financial and Accounting Records

Direct Personnel Costs (Most Subrecipients):

Timecards – separating time spent on the City-funded CDBG

activity and all other activities signed by both the employee and

immediate supervisor. For Executive Director’s time spent, please

have a board member authorize the hours worked.

Payroll Journal/Register

Benefits agreements & cancelled checks

Reconciled General Ledger

AUDIT TRAIL (FINANCIAL)

Can you show where the money goes?

Maintain Financial and Accounting Records

Non-Personnel Costs (With written consent on a

case-by-case basis):

Procurement: Small/Informal Bid Sheet or RFP

documenting the reasonableness of costs from a

minimum of three vendors – please get this approved by

City Staff in advance.

Vendor Invoice, Receipt, or Purchase Order

Cancelled Checks or Bank/Credit Card Statements

Reconciled General Ledger

Date must be

before the

purchase date.

Please note that in our

example, “Vendor

Number 1” would be

awarded because they

are the lowest bidder.

Small purchases

require a minimum of

three (3) bids.

X

4 letter-sized wooden clipboards, 40 blue ball-point pens,

4 boxes of staples, 4 staplers, etc…

Vendor Number 1

123 Main St.

City, CA ZIP

(555) 123-4567

Jason Jefferson

XTotal Package

$125.00

(plus tax)

Please see details

on attached sheet

Vendor Number 2

456 2nd St.

City, CA ZIP

(555) 456-4567

Peggy Jackson

Total Package

$150.00

(plus tax)

Please see details

on attached sheet

Vendor Number 3

1210 Slauson St.

City, CA ZIP

(555) 555-9876

Cristy Schwartz

Total Package

$200.00

(plus tax)

Please see details

on attached sheet

Employee Name Employee Title

Employee Sign 07/05/14

X

X

X

X

AUDIT TRAIL (FINANCIAL)

Are all costs allowable?

Expenditures must be allowable, allocable, and

reasonable

Expenditures must directly relate to the CDBG-funded

activity

AUDIT TRAIL (FINANCIAL)

Do you have appropriate internal controls?

Accounting procedures must create checks and balances.

Financial staff must have the capacity to administer a variety of grants from all sectors.

Are you requesting reimbursement for costs incurred outside of the contract period?

No reimbursement will be made for costs incurred outside of the contract period (July 1, 2015 through June 30, 2016).

AUDIT TRAIL (FINANCIAL)

The City will examine audit reports during its annual

monitoring visits.

An A-133 Single Audit is required for subrecipients

that expend $500,000 or more in Federal funds in a

year.

SUBRECIPIENT MONITORING

The City is required to monitor its subrecipients. It fulfills this responsibility in a variety of ways:

Desk Monitoring: Examination of QPRs and Reimbursement Requests, request for submittal of supporting documentation.

Technical Assistance: Provision of this Workshop and/or individualized technical assistance visits.

On-Site Monitoring: A comprehensive on-site programmatic and financial monitoring visit.

SUBRECIPIENT MONITORING

What are monitoring findings?

Findings are violations of the applicable Federal and local regulations governing the administration of the grant.

SUBRECIPIENT MONITORING

What happens if a subrecipient monitoring results in findings?

The subrecipient will be provided with a detailed written explanation of the regulatory violation and a “required corrective action” to resolve the deficiency.

Technical assistance to resolve any deficiencies is available from the City upon request.

Some findings may require third-party professional service providers to resolve (i.e. accountants, I.T. support, etc.).

SUBRECIPIENT MONITORING

What happens if a subrecipient fails to address monitoring findings?

Subrecipients who do not address monitoring findings in a timely manner may have their CDBG grant suspended or terminated, and may not be recommended for future funding.

CONSIDERATIONS

Before submitting your applications, please consider the following:

Does the organization have the capacity to administer the programmatic and administrative requirements:

Playing by the Rules – A Handbook on Administrative Systems

24 CFR Part 570, OMB Circular A-122

Does the application describe the following clearly:

CDBG funded activity

Proposed goal to be served

Budget Suggestions:

Reimburse for direct costs only

Limit number of budget categories for those easilydocumented (i.e. personnel)

QUESTIONS?

Sylvia Vazquez

(714) 647-5445

Svazquez@santa-ana.org

Subject Line: CDBG Application Question