CDBG - DR Procedures to Determine Timely Expenditures

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.

Grantees are required to spend funds within the statutory period after funds are obligated. The Colorado Department of Local Affairs (DOLA) and the Division of Local Government (Division) establish timelines within each agreement in order to meet these requirements.

Per grant requirements, penalties for failure to meet milestones will be included in agreements, which may result in a full or partial recapture of funds or a reduction in award amounts. The Division has a proven strategy of direct outreach to focus specifically on assisting grantees with complying with CDBG-DR regulations, determining and managing activity milestones, providing other technical assistance as needed and serving as a direct and constant communication avenue between the Division and the grantee. In addition to the technical assistance, the Division has a payment system through the DOLA Grantee web portal which ensures timely processing of requests for payment.

If a Grantee fails to meet the required deadlines, the grant is reviewed by the Accounting and Financial Services (AFS) and the CDBG-DR Program Manager to discuss possible reprogramming of funds.

The Policy and Procedure to Determine Timely Expenditures can be seen below and the general process for payment approval is:

Upon the submission of a request for payment by a grant recipient, the request is tracked through each stage so that the CDBG-DR Program Manager can monitor any potential process delays. This allows a basis for process improvement, as well as a mechanism to identify problem invoices earlier in the process. The Division is dedicated to processing properly filled-out requests for reimbursements as quickly as possible to provide payment as the requests come in. This does not include the time taken on any requests that need to be returned to the sub recipient for correction or further clarification. From the time the request is sent to AFS, the recipient is paid within an average of five business days.

In order to provide an appropriate level of management review, the Division will produce quarterly budget and progress reports. These reports detail progress on a program-by-program basis and include a comparison of actual spending to projected expenditures. Projections are developed based on a combination of current spend rates, projected start and end dates, and input from The CDBG- DR Program Manager and Program Assistant on anticipated milestones.

The CDBG-DR Program Manager and Program Assistant are responsible for ensuring that quarterly budget reports are produced and that the Quarterly Management Reviews are conducted on a quarterly basis.

Procedure

1. Application
   • Assess applicant capacity to carry out proposed project and complete on time
   • Project readiness to proceed as condition of award
   • Other funding sources committed as condition of award
   • Proposed schedule of expenditures
2. Award letter
   • Timely expenditure as condition of award
3. Contract (Grant Agreement)
   • Budget and payment schedule – projected use and timeline for expenditure of funds
   • Performance measures
     • Milestones Report – milestones and target dates
   • Penalties
     • If milestones are missed, State may determine that project is not proceeding timely and
       • Provide technical assistance to get the project on track,
       • De-obligate the remainder of funds, or
       • Terminate the contract, de-obligate the remainder of the funds, and potentially recapture funds
4. Monitoring
   • Quarterly performance reports
     • Financial Status Report – funds expended and projected to be drawn in the following quarter/month
     • Milestones Report – milestones accomplished and target dates
   • Risk-based desk, remote, or on-site monitoring (based on award amount, recipient capacity, adherence to performance measures and timeline)
   • Remote and/or on-site monitoring prior to project completion
5. Internal expenditure tracking
   • The following tracking methods are used and reconciled monthly
     • Monthly review and tracking of recipient expenditures in internal database
       • Quarterly Subrecipient reports
         • Financial Status Reports
         • Milestone Reports
         • Requests for payment
       • Quarterly reports to HUD submitted in Disaster Recovery Grant Reporting System (DRGR)
       • Independent tracking mechanisms to record and track monthly expenditures, receipts, and progress toward the budgeted goals for each contract, and for the grant as a whole
6. Recapture and reprogramming
   • Upon full obligation of CDBG-DR funds, the State will maintain a prioritized queue of eligible projects to be assisted if funds are reprogrammed or recaptured or additional funds are received
     • The State will maintain separate lists for each eligible category of housing, infrastructure, or economic development
     • Upon reprogramming funds, the State will attempt to award funds to projects within the same category and jurisdiction in which the reprogrammed funds were originally awarded
       • If funds are reprogrammed between categories or in any other way that will require an Action Plan amendment, the State will follow the required process

Responsible Personnel

1. State of Colorado allocation oversight
   • 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 tract budgets, reimbursements
     • DOLA Executive Director Office
       • Communications including maintenance of website
       • Accounting and Financial Services – fiscal control
   • Department of Local Affairs, Division of Housing
     • Housing Development Specialists
       • Underwriting and determination of programmatic funding need and program administration proposal, assessment of Subrecipient capacity to administer
     • Asset Managers
       • Payment request review/approval, quarterly report review/approval, technical assistance as deemed appropriate, Subrecipient agreement closeout