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Emails to Grantees (2014)

Gustav-Ike Parish Outreach Representatives and other OCD-DRU staff members will, from time to time, send updates, clarifications, further guidance, etc. to parish and municipal officials. These communications are gathered here for future reference. Grantee questions should be directed to staff, if noted, or to their OCD-DRU Outreach Representative.
 

Oct. 13, 2014

Environmental Review Requirements

The following is an environmental reminder for Disaster Recovery CDBG grantees and sub recipients:  
The U.S. Department of Housing and Urban Development (HUD) requires that every HUD-assisted project undergo an environmental review to determine whether it meets federal, state, and local environmental standards. There can be no actions or commitment of any HUD or any non-HUD funds, to include the use of program income, which would cause actions that are choice-limiting among reasonable alternatives or would produce an adverse environmental impact, before HUD has approved the environmental certification of compliance, and the request for release of funds.
 
Examples of “choice-limiting” actions include commitment of funds through the execution of demolition contracts, the execution of construction/rehabilitation/reconstruction contracts, or buy/sell agreements for acquisition of property, prior to the completion of the environmental review process.
 
What does this mean?
 
It means that no actions or commitment of funds can occur before HUD approval of the environmental process. This is critical because there is no “do-over” with the environmental process. When federal and/or state auditors review your project(s), if the environmental review process has been done improperly, OCD/DRU and/or the grantee will have a Compliance Finding, and HUD has the right to seek repayment of any and all funds that were handled improperly.
 
There are different levels of environmental clearance. The first is “exempt” activities; however, there is an environmental process that must be followed before money can be committed to that activity. For example, if a new contract is to be signed with a consulting firm, the contract should not be signed until the environmental has been cleared. Even if the Action Plan was approved today, and this project could be classified as exempt, the environmental process will take approximately one week to complete.
 
Alternatively, there are certain activities that can be “Categorically Excluded” and do not normally require a full environmental review. These happen when there is rehabilitation or repair of homes, apartments or businesses. As long as these properties have flood insurance, are not historic, and are being rehabilitated using the same footprint, the environmental clearance will take a minimum of four-six weeks after the program description is finalized, and the Environmental Officer is made aware of the need for clearance.
 
If the words reconstruction (demolition and rebuilding) or new construction appear in a project description, a full environmental clearance is necessary, and the property will not be receiving federal funds for at least three to four months after the date the environmental process begins.
 
Should you have any questions regarding the information provided above, please contact Ann Herring, Environmental Compliance Officer for OCD/DRU, Ann.Herring@la.gov, or at 225-219-9620.
 

Duplication of Benefits Policy

OCD-DRU has recently adopted a Duplication of Benefits (DOB) policy for our agency, which is here for your review.
 
Additionally, based on guidance from HUD, each of our grantees and direct sub-recipients must also adopt their own DOB policy and procedure. To help you formulate your policy, we are providing this Sample DOB Policy for your use. Each grantee and direct sub-recipient must adopt a DOB Policy and Procedure to be included with their Disaster Recovery CDBG files. Grantees that have provided Disaster CDBG funds to a sub-recipient should pass the Sample Policy to the sub-recipient for adoption for their project or program.
 
If you have questions or would like technical assistance in creating your DOB policy and what it is and why you need it, please contact your outreach representative.
 

September 24, 2014

Program Income Guidelines

For those CDBG disaster recovery grantees who have generated program income as a result of any disaster recovery CDBG-funded program, OCD-DRU has established guidelines to let you know appropriate uses for those funds, how to request the use of the program income and how to submit a draw request.
 
Program Income Guidelines
Exhibit A - Program Income Quarterly Reporting Form
Exhibit B - Draw Request Form for Parish-Held Funds
 
Should you have questions about program income in general or these guidelines, please ask your Outreach Representative.
 

July 22, 2014

Important Notice: Changes and Updates in the Submission of Construction Plans, Specifications, Cost Estimate and Change Orders

OCD-DRU is in the process of entering into a new contractual relationship for support and technical assistance services to be provided to disaster recovery CDBG grantees as projects are implemented. This correspondence details specific updates grantees need to make when submitting construction plans, specifications, cost estimates and change orders. New contact information is also provided. Please adjust your records accordingly and forward this information as appropriate to other staff to avoid any delays in getting these documents approved.
 
Documents previously submitted by grantees have been transferred to the new contractor as identified below. Please feel free to call or e-mail Ms. Gallagher to confirm your documents have been received and are under review.
 
One (1) hard copy and one (1) electronic copy of your construction plans, specifications and final cost estimate are to be submitted to the following for review and approval prior to advertising for bids. You must have OCD-DRU approval in writing prior to advertising for bids.
 

Jennifer Gallagher

1717 Jackson Street

Alexandria, LA 71301

Jgallagher@paealex.com

Phone: 318-473-2100

Fax: 318-473-2275

 
Please ensure that the most up-to-date documents are included in the specifications submitted for review and approval. Sample documents have been provided in Exhibit 6-2 of the Grantee Administrative Manual for your review. Some recent specifications submitted have been missing the current CDBG Compliance Provisions and Federal Labor Standards, wage decision and Section 3 forms.
 
Submission of Change Orders
Please be reminded that, per Section 2 of the Disaster Recovery Grantee Administrative Manual, if any of the following circumstances will be affected by a change order, it must be reviewed and approved by OCD-DRU prior to execution by the Grantee:

  • The project’s eligibility;
  • The scope of the project is outside the approved project application; or,
  • The project’s environmental clearance.


For clarification, “changes to scope” are defined by OCD-DRU as any construction items added that were not discussed in the project description or cost estimate contained in the approved application.

If you are unsure about whether review and approval are required, OCD-DRU suggests that the change order be submitted and allow our staff to make the determination for you. This careful approach will ensure that all costs are eligible for reimbursement.
 
Drainage Projects Only (Gustav/Ike/Isaac Only)
If your project is for drainage improvements, you will also need to submit one (1) hard copy of your plans, specifications, final cost estimate and impact study to the State of Louisiana, Department of Transportation and Development (DOTD) for review. The list of District Administrators to determine which office should perform the review, based on the location of the project, can be found at:
http://wwwsp.dotd.la.gov/Inside_LaDOTD/Divisions/Mgmt_Finance/HR/Pages/Contacts_Districts.aspx  

OCD-DRU must receive the review response from DOTD prior to authorizing advertising for bids.

June 5, 2014

Deadlines for Request for Payments

As the state's Fiscal Year (FY'14) ends June 30, DRU is asking all grantees to submit their Requests for Payment to DRU by the following deadline: All expenditures through June 30, 2014, submit payment requests to DRU no later than Friday, July 11, 2014.

Please begin submitting expenditures from the months of May and June now, in order to expedite the approval process. Payment delays will occur if the above deadline is not adhered to. DRU, in partnership with the State’s Office of Finance & Support Services, urges grantees to process all reimbursement requests for expenditures through June 30, 2014, in order to assist in closing the State’s FY’14 books.
 
For expenditures occurring on or after July 1, 2014, please submit these expenditures on a separate payment request form than expenditures occurring prior to July 1; expenditures after July 1, 2014 will occur in the state’s next Fiscal Year (FY’15).
 
OCD/DRU requests that all grantees expedite their submittals through their normal process, either electronically or by hard copy, to meet the July 11 date. As always, we appreciate your cooperation in these year-end efforts. Thank you.
 

CDBG Administrative Manual Updates Available

Version 3.5 Update to the Disaster Recovery Grantee Administrative Manual has been posted on the OCD/DRU website and is available at http://www.doa.louisiana.gov/cdbg/dr/dradmin-manual.htm.
 
Here are the major highlights of the update:​

  • Section 2: Changed subsection 11.0 from Resources to Green Building Standards, as well as additions of 11.1-11.4. Resources is now subsection 12.0
  • Section 3: Addition of Hurricane Isaac updates
  • Section 4: Addition of Specific Requirements for Hurricane Isaac Allocation
  • Section 6: Updated Preparation of a Contract to include Isaac updates
  • Section 7: Updated to reflect current version of Section 3 of the HUD Act of 1968 Compliance
  • Section 10: Revised section on a Valuation of the Property as well as the Quick Take section to reflect current CDBG guidance
  • Section 11: Included Isaac changes to Regulations
  • Section 12: Additions of sections for Notice of Deficiency (findings), Sanctions and Monitoring Report
  • Exhibit 11-1: Removed portions of the table and added a Date of Inventory and Signature blanks, instructions for the form were updated
  • Exhibit 12-3: Updated Sections on Policies and Procedures Review, as well as Validation of Financial Management System based on Isaac requirements
  • Exhibit 12-4b: Updated the checklist to include Isaac requirements
  • Exhibit 12-7: New addition of the HUD CPD Green Building Retrofit checklist
  • Exhibit 13-1i: Updated to include a Date of Inventory and Signature blank, instructions were also revised.

Please take a moment to replace the sections that need updating so you’ll have the latest information.

May 27, 2014

For Gustav/Ike Grantees Only: New Budget Summary Form, Version 3

An updated version (3) of the Budget Summary Form is now available for use by all Gustav/Ike grantees, for both submitting proposal amendments for Gustav/Ike projects and also reconciling final expenditures for projects in GIOS, as reflected in the Close-Out Report. Please discard any previous versions.
 
Version 3 has two unique features and will change the process for reallocating funds from one project to another. First, Version 3 enables the grantee to enter dollars and cents, unlike previous versions which only accepted amounts in whole numbers. As Gustav/Ike grantees move forward implementing projects and preparing Close-Out Reports, which must reflect the actual amount for each project, please use this form to reallocate funds so the budget amount in GIOS is the same as the total expenditure reflected in the Close-Out Report.
 
More than likely, the final total expenditure for a project will include dollars and cents, which is why the second unique feature was added to the “Unallocated Funds” line. Before, this line should have always reflected zero; now, the “Unallocated Funds” should be considered as the “escrow” account. Funds in this category may vary from less than a dollar to thousands of dollars.
 
Unused funds from completed projects can now accumulate in the “Unallocated Funds” line. Once built up, those funds can be used to supplement an existing project(s), fund a new project or alternative project or, as all projects are completed, be returned to the state in preparation for closing-out the Cooperative Endeavor Agreement.
 
However, if there are sufficient funds to cover change orders or over-expenditures for a project(s) already under construction, those funds should be reallocated directly to that project(s), following the usual process for proposal or budget amendments.
 
The Proposal Amendment Process for Gustav/Ike proposals is provided as a refresher. Keep in mind the proposal budget must be amended before a project amendment can be submitted. Do not submit them simultaneously, since no action can be taken on the project amendment until the funds are available. For every amendment to the proposal budget, the Excel version of the Budget Summary Form, Version 3, must be submitted along with the narrative, with the correct amendment number and the date of the amendment reflected at the top of the form.
 

New "Pre-Monitoring Visits" Added to OCD-DRU Outreach Efforts

In an effort to reduce concerns, findings and potential liabilities at the local level, OCD-DRU will now conduct pre-monitoring technical assistance visits that will prepare the grantees for the formal monitoring trip conducted by OCD-DRU’s Monitoring and Compliance team. In the March 2014 E-Blast, 14 non-compliance issues were listed in the areas of record management, procurement and finance as being consistently noted during formal monitoring visits conducted over the past 18 months.
 
To help grantees maintain compliant files and prevent future findings of non-compliance, the Outreach Team will now conduct systematized pre-monitoring visits that will result in a written report for distribution within OCD-DRU and to the grantee. Pre-Monitoring team members will include the grantee’s Outreach representative, a member of the management team from the Monitoring and Compliance department and/or the program analyst or manager.
 
The monitoring checklists in the Gustav/Ike CDBG Administrative Manual, Section 12 under Exhibits, will be used as the basis of discussion for the pre-monitoring visit. However, a records review of project(s) and core (general administrative files) documents will also be conducted. While on site, the team will actually assist the grantee in correcting the files to conform to CDBG requirements and the monitoring check list, as well as identify documentation that will be needed. The team will also make note of follow-up actions the grantee will need to take in order to be in compliance, so that the grantee can make those corrections prior to the formal monitoring trip.
 
The visit will be an interactive one, engaging the grantee in all aspects of the pre-monitoring visit. At the end, the Pre-Monitoring team will let the grantee know if there are deficiencies or potential liabilities they have noted that, if not addressed, could result in a formal finding during the official monitoring visit. A copy of the written report will also be sent to the grantee, noting any follow-up for the grantee or that OCD-DRU may take to provide further technical assistance in correcting the deficiencies and/or avoiding the same issues in the future.
 
A pre-monitoring visit may be conducted independently or in combination with other technical assistance or an update of the performance templates while the team is on site. All Katrina/Rita and Gustav/Ike grantees are subject to have at least one pre-monitoring visit, scheduled well in advance of a formal monitoring review by the Monitoring and Compliance department and/or as a result of being scheduled for one during the upcoming quarter.
 

Apr. 25, 2014

New LMI Policy for Parish Program Recipients

Dear Parish Presidents, Police Jury Presidents and Parish Administrators:
As you are aware, the disaster recovery funds received from the U.S. Department of Housing and Urban Development (HUD) by the State of Louisiana (state), and administered by the Office of Community Development-Disaster Recovery Unit (OCD-DRU), require that greater than 50 percent of the total grant funds must be expended on projects that primarily benefit persons of low-to-moderate-income (LMI). This requirement is standard for HUD’s disaster-related grants.
 
In 2008-09, the state allocated more than $500 million of HUD’s $1 billion grant for disaster recovery from hurricanes Gustav and Ike to local governments, recognizing they are best able to assess their recovery needs and identify the projects to address those needs.
 
Currently, 61 percent of the funds allocated to state programs and 36 percent of funds at the local level are committed to projects that benefit LMI households, which puts the state short of 50% for the overall grant. For the state to ensure that HUD’s LMI requirement is met, and to be consistent with state and federal Community Development Block Grant (CDBG) regulations reflected in each Cooperative Endeavor Agreement, our agency is implementing the following policy, effective immediately:
 
Any parish-level Gustav/Ike CDBG disaster recovery funds that (a) will not be spent within a given project and its approved budget; (b) are uncommitted and were assigned to projects in the original proposal but have not been approved via a project application;
 or (c) are generated as program income, must be committed to a project(s) that will meet an LMI national objective.
 
This includes both priority and alternate projects that may have been included in a parish proposal, as well as new projects that may be identified subsequent to the date of this correspondence. This policy excludes Tier II and Tier III amendments approved prior to April 25, 2014.
 
In furtherance of the need to meet the 50% LMI requirement, it is also important that parishes review existing projects and determine if any can be appropriately switched to an LMI National Objective.
 
Procedures:
1.Proposal and Budget Summary Amendments
All Tier I, II and III proposal amendments will now require review and approval by the OCD-DRU Proposal Review Committee. Please continue to submit all requests to your Outreach Representative pursuant to the Proposal Amendment Process dated July 1, 2010. Changes in GIOS and project amendments will not be accepted until a formal decision is rendered by the Proposal Review Committee. Parishes will be notified either by e-mail issued by their Outreach Representative or by a letter signed by the OCD-DRU Executive Director.

2. Any new project(s) should meet the LMI national objective.

3.Exception Requests
Exceptions to this policy will be considered on a case-by-case basis. To be considered for an exception, the parish must submit a narrative explaining in detail the steps taken to identify an LMI project and the rationale for reallocating funds to the non-LMI project(s) identified.

Because of your leadership and the leadership of your colleagues around the state, there are now more than 400 projects in various stages of implementation and completion in the 53 parishes eligible for Gustav/Ike recovery funding. These projects are addressing recovery needs in infrastructure, economic revitalization, affordable housing and resiliency planning.
 
These are remarkable and creative projects that are the outgrowth of leadership and citizen commitment in communities across Louisiana. I encourage you to continue being proactive in managing your grants through the timely implementation of projects and expenditure of all funds, consistent with this guidance. This will be a team effort so that every option can be explored to ensure robust recovery as well as compliance with federal requirements.
 
If you have any questions or concerns regarding this policy, please contact your outreach representative for assistance. As always, thank you for your leadership in the state’s safer, stronger, smarter recovery.
 
Sincerely,
Patrick W. Forbes, P.E.
Executive Director
 

Mar. 26, 2014

Results of OCD-DRU Monitoring Reviews: Non-Compliance Issues and Recommendations for All CDBG Grantees

During this past year, the OCD/DRU Compliance and Monitoring Section conducted more than 50 on-site monitoring visits to determine grantees and sub-recipients’ compliance with all applicable federal rules and regulations in administering Disaster CDBG funds.
 
Highlighted below are some of the areas of these monitoring reviews that result in the most concerns and findings of non-compliance, along with guidance on correcting these areas before an on-site monitoring is scheduled by the OCD/DRU.
 
File Management: Lack of a good file management system can result in a concern or finding. For guidance, see Section 4 of the OCD/DRU Grantee Administrative Manual. Also see Section 3, Grantee Implementation Checklist. Using these tools will help you maintain the proper documentation needed to begin to demonstrate compliance and will enable the OCD/DRU Compliance Team to find the proper documentation needed to determine compliance.
 
Procurement:
No procurement policies and procedures
Reference to the need to have these policies and procedures can be found in Sections 4 and 6 of the Grantee Administrative Manual. A sample procurement policy can be found in Exhibit 6-1. These are necessary to assure that proper procurement processes are used and will be used by the Compliance Team to review all procurements for compliance

Conflicts of Interest
Section 570.489(h) of the CDBG rules and regulations describes prohibited conflicts and persons covered, as well as the requirements to address conflicts. Conflicts covered can either be real or perceived and must be properly addressed before proceeding. Recent monitoring efforts have revealed at least a perceived conflict of interest involving the hiring of a grant administrator from the same entity contracted to provide engineering services. If this situation pertains to your project, you need to consult Section 570.489(h) and take the necessary steps to address it or it will be identified as a “finding” that could result in disallowed costs.

Failure to obtain OCD/DRU approval when only one bid is received in response to an RFP or RFQ and less than three quotes are obtained through the Small Purchase procedure
This requirement can be found in subsection 10.0 of Section 6 of the Grantee Administrative Manual.
 
Failure to include all CDBG assurances in each contract paid with CDBG funds
These assurances can be found in Exhibit 5-6 of the Grantee Administrative Manual.
 
Use of evaluation criteria and sub criteria in the review and scoring of proposals and bids that have the effect of limiting free and open competition in procurement
This is typically found in any criterion that evaluates an entity’s previous “experience” with the procuring entity, and the choice of scores from which to choose includes “no previous experience.” What should be evaluated is previous experience with the type of project to be undertaken.

Use of geographical scoring criteria
The only entities that may be scored in this fashion are architectural and engineering services, as long as there are a sufficient number of such firms in the selected geographical radius. This must be documented.

Lack of documentation to demonstrate a “good faith effort” in identifying and reaching out to minority and women owned business when procuring goods and services
Many times reference is made to the need for potential contractors to comply with DBE requirements, but this is not the same thing.

Failure to determine, before signing a contract, that the contractor is not on the Federal Debarment list or reviewing the list after a contract has been signed
This step should occur upon receipt of proposals and bids so that such bidders are eliminated from competition. The link to this website can be found in subsection 13.1 of Section 6 of the Grantee Administrative Manual.

Finance:
Lack of financial management policies and procedures
We understand that many small jurisdictions may find this requirement to be burdensome, but we are experiencing a problem in A-133 Audits with the failure of the audit to reflect the receipt and expenditure of Disaster CDBG funds. We have also experienced seeing payment requests being signed by a non-authorized individual. Subsection 2.0 of Section 5 of the Grantee Administrative Manual identifies what a grantee’s financial management system must include, as well as three basic functions that must be served by the system. The information required will form the basics of your required policies and procedures.

Failure to keep Disaster CDBG funds separate from other funds and placing of these funds in an interest bearing account
Subsection 4.3 of Section 5 of the Grantee Administrative Manual contains required guidance for these two areas.

Cash Management – using the advance method instead of reimbursement and not expending the funds within three (3) days

Budget to Actual Reconciliations – either not performing the reconciliation or not comparing expenditures to the approved CEA/Application budget
If you have any questions regarding these areas of compliance, please contact your Outreach Representative.


 

Reminder: Submit Construction Contract "Notice of Award" to OCD/DRU

Once a contractor has been selected using the appropriate solicitation method, the grantee must submit a completed Notice of Contract Award form to the OCD/DRU for all prime contracts. This form must be received by the OCD/DRU within 30 days after awarding the contract. This form, along with instructions, is provided as Exhibit 6-14 in the Disaster Recovery CDBG Administrative Manual.
 
Along with the Notice of Contract Award, the grantee must send proof of bid advertisement along with a Certified and Itemized Bid Tabulation, which is a listing of bidders and bid amounts for the project. Also, for reporting purposes documentation describing the wage decision applicable for the contract should be included.
 
The grantee must maintain all program and project-related documentation. Be sure that the Notice of Contract Award, wage decision documentation, proof of bid advertisement and Certified and Itemized Bid Tabulations are maintained in the project files.  
 

Feb. 12, 2014

Insurance and Bonding Requirements in CEAs

Because the U.S. Department of Housing and Urban Development requires that all grantees safeguard CDBG payments from any misuse, all cooperative endeavor agreements (CEAs) require the following regarding insurance and bonding:
 
Insurance & Bonding
Grantee shall carry sufficient insurance coverage to protect contract assets from loss due to theft, fraud and/or undue physical damage, and as a minimum shall purchase a blanket fidelity bond covering all employees in an amount equal to cash advances from OCD/DRU.
 
In order for OCD/DRU to ensure all grantees are complying with this safeguarding requirement, grantees will be required to provide proof of their fidelity bond or crime insurance coverage for all employees when a new CEA is entered into or when an existing CEA is amended. Such coverage must be equal to at least 10% of the amount of the CEA or 10 % of the amount left unpaid, if that amount can be determined.
 
Note that any grantees who are state agencies or others who are insured by the state Office of Risk Management (ORM) will not have to supply proof of insurance, because they are automatically covered in adequate amounts by ORM. Samples of proofs of insurance can be viewed here. If you have any questions on this requirement, please contact Bonita “Bonnie” Brown at 225‐342‐0856 or Bonita.Brown@la.gov.

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