CDBG - DR Duplication of Benefits Policies and Procedures

Overview

The Colorado Department of Local Affairs (DOLA) is in receipt of Community Development Block Grant Disaster Recovery (CDBG-DR) funds from the Department of Housing and Urban Development (HUD). DOLA will use these funds to carry out activities to address the long-term recovery needs resulting from the DR-4634 Marshall Fire and Straight Line Winds such as the reconstruction and rehabilitation of residential structures; the implementation of mitigation measures for future disasters; assistance with economic recovery for households and businesses impacted by the disaster; and reconstruction of infrastructure impacted by the disaster.

Sec. 312 of the Stafford Act (42 U.S.C. 5155) requires all Stafford Act funded programs to ensure that Entities in receipt of federal disaster recovery dollars are not compensated for the same damages through multiple sources. HUD provided specific guidance for CDBG-DR funding through “Clarification of Duplication of Benefits Requirements under the Stafford Act for CDBG-DR Grantees,” 76 Federal Register 221 (16 November 2011), pp. 71060-71066. That guidance was further updated with “Updates to Duplication of Benefits Requirements Under the Stafford Act for CDBG-DR Grantees” 84 Federal Register 119 (20 June 2019), pp. 28836-28848. This document reinforces those requirements and establishes applicability and responsibility in the implementation of Colorado’s CDBG-DR grant.

Scope of DOLA CDBG-DR Policy

This policy is applicable to all entities responsible for the implementation of programs and projects funded under Colorado’s CDBG-DR grant.

Policy

All CDBG-DR funded programs and projects are required to ensure appropriate procedures are in place to prevent Duplication of Benefit (DOB). Entities must ensure that DOB prevention is specifically addressed in their policies and procedures, and all subrecipient agreements and/or contracts must pass that responsibility down to Subrecipients. Subrecipients and entities providing direct benefits to beneficiaries must utilize procedures in accordance with HUD guidance as outlined below. Administering agencies must have a DOB calculation worksheet prepared for each beneficiary on file. Each beneficiary must sign a certification form regarding other assistance received. Both documents must be on file in accordance with 76 FR 71060 (November 16, 2011). Programs have the liberty to design forms that combine the calculation and the certification requirements. Third party verification of assistance is required, and every attempt to obtain verifications should be undertaken. When verifications are not obtainable, self-declaration can be used as a last resort, but should be the exception.

Procedures

The procedures provided below are consistent with Section III-1 of Colorado’s Certifications to HUD and with 76 FR 71060 (November 16, 2011) and 84 FR 119 (June 20, 2019). In addition to the procedures below, all grant agreements must contain language indicating that any duplication of benefit received post-award will require repayment. Procedures are as follows:

1. Prior to assistance
   1. Identify total need
      1. Determine the specific purpose for the CDBG-DR request
      2. Total need will be determined by project type (e.g. homeowner rehabilitation/reconstruction cost estimate, infrastructure reconstruction cost estimate). The total need must be documented.
      3. All costs included in total need must be reasonable and necessary.
   2. Identify all sources of funding received and reasonably anticipated
      1. The application for assistance will require documentation for all sources of funding received or reasonably anticipated, and certification that all assistance is reported.
      2. Secure 3rd party verification of all sources of assistance (FEMA, SBA, private insurance, etc.) When 3rd party verification is not available, document in the file the reason it was not available.
   3. Recording the information in the DOB Calculation Worksheet, determine which funding sources to include in or exclude from the unmet need calculation (based upon guidance in Fed. Reg. 71,060 – 71,066 (November 16, 2011)) and deduct assistance determined to be duplicative
   4. Apply program cap, if applicable
   5. Arrive at maximum CDBG-DR assistance award amount
   6. Execute grant/loan agreement with recipient/beneficiary, including provision that all additional funds received will be reported to the State or subrecipient program administrator within 15 calendar days of receipt. If the additional funds are determined to be duplicative, the award will be reduced and/or the recipient/beneficiary will be required to repay any disbursed duplicative benefit.
2. Upon completion of activity for which funds were awarded:
   1. Require recipient/beneficiary to report and certify whether additional funds were received for disaster-related expenses, the amount, and when funds were received. If additional funds were received that are determined to be duplicative, require repayment.
3. One year after completion of activity for which funds were awarded or upon project closeout if closeout occurs after December 30, 2024 (three years post event):
   1. Require recipient/beneficiary to report and certify whether additional funds were received for disaster-related expenses, the amount, and when funds were received. If additional funds were received that are determined to be duplicative, require repayment.

Documentation

Each beneficiary or project file must contain the following:

1. Duplication of Benefit calculation worksheet form to include:
   • Total development cost
   • Identification of unmet need
   • Identification of all sources of assistance provided to applicant
   • Identification of those sources that are duplicative (with comments as needed)
   • Final award calculation
2. Any required 3rd party verifications of assistance and/or certifications as follows:
   • FEMA programs: letter/s from FEMA and/or data provided by FEMA
   • Insurance: letter from insurance company and/or data if available
   • SBA: letter/s from SBA and/or data provided by SBA
   • Other program documentation as applicable
3. Certification that no additional benefits have been received. This can be a signed affidavit from the beneficiary, or other comparable and approved form as created by the program.
4. A signed subrogation agreement from the recipient Note: Items (c) and (d) can and will most often be on the same form.

Additionally, at the program level each implementing agency must have the following:

1. A description/definition of Duplication of Benefit and likely sources within their program guidelines or in their application and
2. Recapture policies and procedures

Required Verification by Program Area

Program Area = Long term recovery and restoration of:

Note: "Other" includes charitable resources, local government programs, donations of easements or land, other federal funds (CDBG/HOME, ESG, ARPA), or State programs such as Impact grants, Disaster Emergency Fund, Housing

Responsible Personnel

1. The Department of Local Affairs, Division of Local Government
   • CDBG-DR Program Manager – overall program management
     • Day to day leadership, management, and decision making for CDBG-DR grant
     • Ensure program requirements, federal rules, and regulations are adhered to
     • Manage and maintain contracts and payments
     • Provide guidance and oversight to partner agencies
     • Communicate and coordinate with HUD
     • Manage successful execution of the grant
     • Provide training and technical assistance as deemed appropriate
   • Disaster Recovery and Resilience Program Assistant
     • Organize and implement applications and funding decisions
     • Complete program reporting within DRGR
     • Respond and provide technical assistance
     • Maintain DOLA grants portal
     • Ensure compliance with contract files, federal requirements and state requirements
     • Prepare and track budgets, reimbursements
2. Department of Local Affairs, Division of Housing
   • Housing Development Specialists – initial calculation
   • Asset Managers – follow-up
3. Activities carried out through subrecipients
   • Subrecipient program administrator – initial calculation and follow-up
   • Compilation and submission of documentation; submission of payment requests and reports to DOH

Administration and Responsibility

The DOLA CDBG-DR Manager or his/her designee is responsible for ensuring that duplication of benefits policies and procedures are available for all CDBG-DR funded programs and that entities and Subrecipients are monitored for compliance with this policy. State agencies and subrecipients are responsible for developing and implementing DOB policies and procedures for programs under their purview.

Entities and Subrecipients directly serving beneficiaries are responsible for ensuring that DOB procedures are followed and DOB calculations and certifications are available on file for all beneficiaries. All entities and subrecipients must have recapture procedures in place and in writing within all grant agreements in accordance with 31 U.S.C. Chapter 37 for the return of any identified Duplication of Benefit.

The DOLA CDBG-DR Manager is responsible for the administration, revision, interpretation, and application of this policy. This policy will be reviewed annually and revised as needed to address State and Federal requirements.