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Tel: (225) 219-9600
Fax: (225) 219-9605

Mailing Address:
P.O. Box 94095
Baton Rouge, LA 70804-9095

Physical Address:
617 N. Third St.
6th Floor
Baton Rouge, LA 70802

Get A Game Plan Louisiana Accountability & Transparency
Gustav-Ike Communications to Grantees

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.

 

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.



July - December 2013 Communications

January - June 2013 Communications  

2012 Communications