COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) SUBRECIPIENT WORKSHOP FY October 2014 Santa Ana, CA

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1 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) SUBRECIPIENT WORKSHOP FY October 214 Santa Ana, CA

2 CDBG SUBRECIPIENT TRAINING Overview of CDBG Anticipated Timeline Key Considerations Grant Requirements Monitoring Considerations Community Development Block Grant (CDBG) in 3 minutes

3 OVERVIEW OF CDBG The Community Development Block Grant Program was established by an Act of Congress, through the Housing and Community Development Act of 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 lowerincome neighborhoods.

4 OVERVIEW OF CDBG The City is considered an Entitlement Community and receives its own annual allocation of CDBG funds. (FY allocation $5,56,186) 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.

5 ANTICIPATED TIMELINE Date September 22 October 6 - November 14 October 7-15 November 14 November 17 December 17 December 17 Tentative February 215 March 215 Steps Outreach Efforts Commenced Application Period (6-weeks) Mandatory CDBG Subrecipient Training Applications Due by 5 PM at City Hall 6 th Floor Application Review Community Redevelopment & Housing Commission (CRHC) Presentations to CRHC Recommendations to FEDT Recommendations to City Council

6 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?

7 REQUIREMENTS Public service programs are eligible under 24 CFR 57.21(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

8 NATIONAL OBJECTIVE - LMC Public service programs that benefit low - and moderate income persons are eligible under 24 CFR 57.28(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).

9 NATIONAL OBJECTIVE APPLICATION DOCUMENTATION 57.28(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 (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 (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. - 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. - 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. - Documentation describing how the nature and the location of the facility or service establishes its use, predominantly by L/M income persons.

10 NATIONAL OBJECTIVE APPLICATION DOCUMENTATION 57.28(a)(1) Area Benefit Activities 24 CFR 57.28(a)(2)(iii). Microenterprise Activities 57.28(3) Housing 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 microenterprise assistance activity carried out in accordance with 57.21(o) with respect to those owners of microenterprises and persons developing microenterprises assisted under the activity during each program year who are low- and moderateincome 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. An eligible activity carried out for the purpose of providing or improving permanent residential structures which, upon completion, will be occupied by lowand moderate-income households. Acquisition Rehabilitation New Construction - 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. - Full income determination in accordance with 24 CFR Part 5 Annual Income. - 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.

11 NATIONAL OBJECTIVE - LMC 24 CFR 57.28(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 57.28(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 lowand moderate -income limit.

12 NATIONAL OBJECTIVE - LMC 24 CFR 57.28(a)(2)(i)C C) The program has income eligibility requirements which limit the activity exclusively to low - and moderate - income persons. 24 CFR 57.28(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).

13 REIMBURSEMENT GRANT Cost Reimbursement Agreement Insurance Required: General Liability in the amount of $1,, 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

14 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

15 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 client sign-in sheets, case worker s write-ups, etc. Client-Qualifying Documentation (If Applicable)

16 CLIENT INTAKE 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 IMPORTANT Disabled

17 The participant name must be that of the person who is receiving the service. John Smith 7/15/ Main St. Santa Ana XXXXX - my address@yahoo.com // 14 X X Please verify that one (1) box is checked in each section. X X The date must be within the current CDBG Program Year (7/1/14-6/3/15) Verify that the applicant circles the correct household size and income amount. Please verify that the applicant signs, or head of household is signing the intake form if the applicant is under 18 years old. Applicant Name Guardian Name Staff Name X Guar di an Si gn St af f Si gn 7/15/14 7/15/14 7/15/14 The person who verifies that the information on the intake form is correct must date, print and sign their name

18 SAMPLE PAYSTUB Use gross not net amount when calculating income. 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 3th/31st multiply avg. gross by 24

19 An example of a person who receives a week, bi-weekly and semi-monthly paycheck. Please obtain three (3) paystub amounts. John Smith Sr , ,.24 Brenda Smith ,.4 Stacy Smith , Please be sure to verify the household size and income are correct on the applicant intake form. $ 37,.2

20 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

21 Please use as a reference for examples of proof of income documentation; which would be represented on the Income Calculation worksheet.

22 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

23 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 8% of the AMI adjusted for household size.

24 214 INCOME LIMITS Orange County, California FY 214 Income Limit Area Median Income FY 214 Income Limit Category 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person Extremely Low Income (%-3%) $19, $21,7 $24,4 $27,1 $29,3 $31,45 $33,65 $35,8 Orange County $84,1 Low Income Limits (31%-5%) $31,65 $36,15 $4,65 $45,15 $48,8 $52,4 $56, $59,6 Moderate Income Limits (51%-8%) $5,6 $57,8 $65,5 $72,25 $78,5 $83,85 $89,6 $95,4 *Effective Date: December 18, 213

25 QUARTERLY PERFORMANCE REPORTS Subrecipient are required to report programmatic accomplishments by the 15 th day of the month following the end of each quarter. QPRs must report new clients served Q1 - July 1-September 3 (Due Oct. 15) Q2 October 1-December 31(Due Jan. 15) Q3 January 1-March 31 (Due April 15) Q4 April 1 June 3 (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: 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.

26 Agency A Program A % 5 5 Employee Name Empl oyee Si gn

27 ADMINISTRATION Program files must be maintained by the organization. Contract Program Policies and Procedures Insurance Information Financial Data Quarterly Performance Reports Contract Amendments

28 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)

29 ADMINISTRATION Financial Policies and Procedures Internal Controls Organization Chart & Job Descriptions Financial Procedures Timecards Submittal of Reimbursement Requests Annual Audit

30 Agency A Pogram A 123 Main St. Salaries $5, $1, $2, $1, $ $1, $2, Employee Name Empl oyee Si gn Employee Title

31 ADMINISTRATION The programmatic requirements of the CDBG program can be found at 24 CFR Part 57. The uniform administrative requirements of 24 CFR Part 84 (Non-Profit) and 85 (Government) must be followed. Other programmatic requirements: Conflict of Interest Equal Employment Opportunity Act

32 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.

33 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

34 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

35 4 letter-sized wooden clipboards, 4 blue ball-point pens, 4 boxes of staples, 4 staplers, etc Please note that in our example, Vendor Number 1 would be awarded because they are the lowest bidder. Vendor Number Main St. City, CA ZIP (555) X Total Package $125. (plus tax) X Please see details on attached sheet Jason Jefferson Vendor Number 2 Small purchases require a minimum of three (3) bids nd St. City, CA ZIP (555) Peggy Jackson X Total Package $15. (plus tax) X Please see details on attached sheet Vendor Number Slauson St. City, CA ZIP (555) Cristy Schwartz X Total Package $2. (plus tax) X Please see details on attached sheet Date must be before the purchase date. Employee Name Employee Title Employee Sign 7/5/14

36 AUDIT TRAIL (FINANCIAL) Are all costs allowable? Expenditures must be allowable, allocable, and reasonable Expenditures must directly relate to the CDBG-funded activity

37 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, 215 through June 3, 216).

38 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 $5, or more in Federal funds in a year.

39 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.

40 SUBRECIPIENT MONITORING What are monitoring findings? Findings are violations of the applicable Federal and local regulations governing the administration of the grant.

41 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.).

42 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.

43 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 57, 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 easily documented (i.e. personnel)

44 QUESTIONS? Sylvia Vazquez (714) Subject Line: CDBG Application Question