• The U.S. Department of Housing and Urban Development (HUD) requires states to have a system in place for reviewing approved CDBG projects

• Each state’s monitoring process is subject to annual review by HUD

CDBG MONITORING

• OCD must determine whether the grantee:– Distributed funds in a timely manner and in

conformance with the grant agreement– Conformed to HUD and OCD policy– Carried out certifications in compliance with

applicable laws– Is in compliance with “statutory performance

criteria”

CDBG MONITORING

• Statutory Performance Criteria– Have grantees carried out activities and

certifications in accordance with requirements– Have grantees carried out activities and

certifications in a timely manner– Do grantees have continuing capacity to carry out

activities in a timely manner

CDBG MONITORING

• OCD schedules Monitoring visits based upon a number of criteria– Timeliness– OCD Risk Analysis Process– Issues with the grant and/or other projects– Availability of Staff

• OCD is required to monitor every grant

CDBG MONITORING

• OCD Risk Analysis Process– Reviews all programs and grantees on established factors

including:• Financial and Compliance Issues• Administrative Capacity• Past Performance• Citizen Complaints

– Process prioritizes highest-risk grantees for Monitoring visits & Technical Assistance

CDBG MONITORING PREP.

• OCD Staff are responsible for– Planning and coordinating the monitoring visit– Determining what grants, projects, and compliance

areas will be reviewed• Completing Project Prioritization Worksheet

– Conducting the monitoring– Informing the grantee of any issues and findings– Following up on any issues and findings

CDBG MONITORING ROLES

• Compliance Areas and separated into General and Project Specific sections

• General sections include – Administration, Citizen Participation, Financial Management,

Grant Management, and Fair Housing

• Project Specific sections include– National Objective, Environmental Review, Procurement,

Construction Management, Labor Standards, and Acquisition/Relocation

CDBG MONITORING

• Broken-down by Compliance Areas – Requires OCD Staff to create one copy of each General

section and copies of applicable Project Specific section for each project to be reviewed

• Designed to interface with CDBG File Guides • Exhaustive List of CDBG requirements– Separated into Generalist and Specialist areas– “M” indicates grantee met requirement, and “U” indicates

requirement was unmet

MONITORING TOOL

• OCD Staff will inform grantees of monitoring results during Exit Interview

• Exit Interview form outlines performance in each compliance area reviewed and identifies any outstanding materials

• Community is required to submit outstanding materials to OCD– Failure to do so may result in assignment of Findings

and/or Advisory Concerns

EXIT INTERVIEW

• Following monitoring visit, OCD provides grantees with a Monitoring Report letter

• Monitoring Report describes:– Grant Number(s) Monitored– Participating OCD staff and Visit Date– Projects and Compliance Areas Reviewed• Both General and Project Specific

– Conclusions, both positive and negative

MONITORING REPORT

• OCD IS REQUIRED TO REPORT ANY VIOLATION OF STATUTORY OR REGULATORY REQUIREMENTS

• A Finding is a specific, identifiable violation of a statutory or regulatory requirement

• An Advisory Concern is an issue, which could cause a regulatory/statutory violation, if left unaddressed

• Action on the part of the grantee is required to prevent continued deficiency, recurrence, or mitigate adverse effects/consequences of the deficiency

MONITORING REPORT

• Progressive Correction Action can be used if issues are present, including– Failure to comply with regulations– Misrepresentation of a project– Failure to file reports with OCD– Misspent funds– Failure to provide timely and/or appropriate

responses to OCD

PROGRESSIVE CORRECTIVE ACTION

• The intent of PAC is to bring a grantee into line with proper administration of grants and ensure grantee remains eligible for OCD programs

• Examples of PAC include (not exhaustive)– Hold on community grant funds– Formal hearings with administrators and elected officials– Return of grant funds– Exclusion from participation in one or more OCD programs

PROGRESSIVE CORRECTIVE ACTION

• Grantee is required to respond to monitoring findings• Responses can include

– Additional Documentation– Explanatory Narratives– Plan/Efforts to Address Deficiencies for Future Grant Years

• OCD will issue a Monitoring Release letter when deficiencies are addressed

• Grantee must maintain a complete monitoring file with copies of OCD correspondence

RESPONSE AND RELEASE

• OCD Staff contact community administrators/consultants to schedule monitoring visit

• Monitoring Notice letter mailed 14 days prior to visit• Monitoring Visit

– Following visit, grantee should submit any outstanding materials identified during the Exit Interview

• Monitoring Report letter mailed within 30 days identifying any issues, the resolution, and a deadline for responding– Community is generally given 30 days to provide a written response

MONITORING TIMELINE

• Monitoring Response letter requesting resolution of issue with a shorter deadline for response– Community is generally given 15 days to provide a written response

• Monitoring Release letter issued once all issues have been appropriately addressed

MONITORING TIMELINE

COMMON MONITORING ISSUES

• Incomplete income qualification documentation for Direct Benefit activities

• Incomplete building/infrastructure condition surveys for Slum & Blight activities

• Incorrect Income Survey documentation for LMI Area-wide Projects

NATIONAL OBJECTIVE ISSUES

• Failure to maintain administrative procurement materials

• Incomplete administrative agreements between local organizations

• Failure to maintain expense documentation (timesheets, travel reimbursement, etc.) for costs charged to CDBG

ADMINISTRATION ISSUES

• Failure to maintain/update a community Citizen Participation Plan

• Failure to maintain project solicitation, evaluation, and selection documentation

• Failure to maintain a devoted citizen complaint file

CITIZEN PARTICIPATION ISSUES

• Insufficient expenditure and payment documentation

• Incomplete financial management journals and ledgers

• Variances from approved CDBG budget• Inability to expend funds in a timely manner

FINANCIAL MANAGEMENT ISSUES

• Insufficient supporting documentation maintained with Environmental Review record

• Failure to receive Release of Funds prior to signing project contracts

ENVIRONMENTAL REVIEW ISSUES

• Failure to follow appropriate public procurement requirements– Failure to secure sufficient number of bids– Failure to publish/maintain bid notices

• Contracts lack required Federal Provisions• Failure to hold preconstruction conference

PROCUREMENT/CONSTRUCTION MANAGEMENT ISSUES

• Failure to verify Federal Prevailing Wage rates within 10 days of bid opening

• Failure to conduct employee interviews• Failure to verify jobsite posters and wage

decision was posted at construction site• Failure to appoint a Labor Standards Officer

LABOR STANDARDS ISSUES

CLOSEOUT

• The Final Performance Report (FPR) is generated by OCD and mailed to the grantee after the work completion deadline

• Grantee must complete the report and submit it to OCD for review

• Information on the report will be reviewed during the monitoring visit

FINAL PERFORMANCE REPORT

• Part 1: Program Budget - Awarded Funds– FPR reflects the funds budgeted and drawn

against each activity in the grant agreement– Grantee reports the “Actual Funds Expended To

Date” for each activity– Grantee must explain variances of 10% or $5,000

between the Budgeted and Expended amount

COMPLETING THE FINAL PERFORMANCE REPORT

• Part 1: Program Budget – Leveraged Funds– FPR reflects the funds budgeted and drawn against

each activity in the grant agreement– Grantee reports the Actual Funds Expended• Sources of Leverage are broken into other Federal

Sources, State & Local, Private, and Other

– Grantee must explain variances of 10% or $5,000 between the Budgeted and Expended amount

COMPLETING THE FINAL PERFORMANCE REPORT

• Part 2: Program/Project Outcomes– FPR reflects projected outcomes for each activity,

based upon grant agreement– Grantee reports the “Actual Outcomes” for each

activity– Grantee must explain differences between the

projected outcomes and actual outcomes

COMPLETING THE FINAL PERFORMANCE REPORT

• Part 2: Program/Project Outcomes– Amendments are Required for any significant

change in activity scope, beneficiaries, or outcome– All amendment requests must be submitted and

approved during the project period– Rule of thumb: increase/decrease of 10% or more

COMPLETING THE FINAL PERFORMANCE REPORT

• Part 3: Beneficiaries– FPR reflects projected beneficiaries for each activity,

based upon grant agreement– Grantee reports total beneficiaries for LMI projects• LMI Area-wide projects require Total Beneficiaries and

LMI Beneficiaries• LMI Limited Clientele and Direct Benefit require Total

Beneficiaries• Slum and Blight beneficiaries are automatically generated

COMPLETING THE FINAL PERFORMANCE REPORT

• Housing Activities Printout– Grantees using CDBG funds for Housing Activities

must provide information about the project and the beneficiary• Information includes Owner, Address, Type of Housing

Project, Characteristics of the Units, and Characteristics of the Assisted Households

COMPLETING THE FINAL PERFORMANCE REPORT

• Once the FPR is completed, community CEO certifies the document and submits the original to OCD

• Again, information will be verified at monitoring– Discrepancies must be addressed prior to grant

closeout

COMPLETING THE FINAL PERFORMANCE REPORT

• Communities are required to retain all CDBG documentation for 5 years after the grant is closed

CDBG RECORD RETENTION

QUESTIONS