U.S. Department of Housing and Urban Development Monitoring of Subgrantees Thursday, May 5, 2011 2:00 PM 4:00 PM Community Planning and Development
Introductions Jessie Handforth Kome, HUD David Noguera, HUD U.S. Department of Housing and Urban Development Community Planning and Development 2
Agenda The purpose of monitoring Grantee monitoring obligations Approach to monitoring Monitoring process Preparation and staffing The monitoring visit Findings and concerns Monitoring follow-up U.S. Department of Housing and Urban Development Community Planning and Development 3
Why Monitor? Improve subrecipient and contractor performance Carry out your CDBG program in a timely manner Comply with regulations Improve management quality Solve problems Improve communication Save time Avoid audit hassles
Many Moving Parts Implementing grants requires the work of many hands. Most grantees have many programs, projects, and partners. Staff, subgrantees, and contractors. Timelines and milestones abound. Impossible to constantly oversee every aspect of every program or project. U.S. Department of Housing and Urban Development Community Planning and Development 5
What Are the Goals of Monitoring? Assess the quality of subgrantee performance. Determine the level of subgrantee compliance. Address subgrantee management deficiencies and design corrective actions. Improve or reinforce subgrantee performance. Highlight subgrantee accomplishments. Identify subgrantee best practices that might be replicated by other partners. U.S. Department of Housing and Urban Development Community Planning and Development 6
Program Design Good program design is critical to program success. Monitoring verifies that a program was implemented as designed. Provides feedback to both the grantee and the subgrantee. Demonstrates successful program implementation and subgrantee compliance. Documents subgrantee accomplishments. U.S. Department of Housing and Urban Development Community Planning and Development 7
Reducing Risk You, the grantee, do your best to select qualified competent partners. Communicate expectations and obligations. Set up management policies and procedures. Monitoring verifies the competence of your partners. U.S. Department of Housing and Urban Development Community Planning and Development 8
Reducing Risk Are they low risk or do they require technical assistance? Allocate your scarce grant management resources efficiently. U.S. Department of Housing and Urban Development Community Planning and Development 9
Who s Minding the Store? The buck stops here! The grantee is responsible for the implementation of the grant. Federal regulations make this explicit. U.S. Department of Housing and Urban Development Community Planning and Development 10
24 CFR 570.501(b) The grantee is responsible for ensuring that funds are used in accordance with all program requirements. The use of subrecipients does not relieve the recipient of this responsibility. The grantee is also responsible for: Determining the adequacy of performance under subrecipient agreements. Taking appropriate action when performance problems arise. U.S. Department of Housing and Urban Development Community Planning and Development 11
24 CFR 85 Subpart J Grantees are responsible for managing the dayto-day operations of grant- and subgrantsupported activities. HUD recommends that grantees monitor subgrant-supported activities to assure: Compliance with applicable federal requirements. Performance goals are being achieved. Grantee monitoring is recommended to cover each program, function, or activity. U.S. Department of Housing and Urban Development Community Planning and Development 12
Monitoring Obligations Do your subgrantees operations comply with all regulations governing: Administration? Financial management? Implementation? Do your subgrantees achieve their performance objectives on schedule and within budget? U.S. Department of Housing and Urban Development Community Planning and Development 13
The Role of Monitoring Monitoring plays a key role in grantee program management. Monitoring helps grantees to: Stay fully informed concerning program subgrantee compliance with program requirements. Be aware of the extent to which technical assistance is needed. Detect fraud, waste, and mismanagement or situations with potential for such abuse. U.S. Department of Housing and Urban Development Community Planning and Development 14
Ideal Approach to Monitoring Avoid a gotcha mentality that focuses on: Catching subgrantees making mistakes. Nailing them with the blame. Subgrantees are likely to become uncooperative and resentful. Makes your monitoring work more difficult. Does not improve program implementation. U.S. Department of Housing and Urban Development Community Planning and Development 15
Ideal Approach to Monitoring Emphasize positive feedback, what has been done well. Assume your view is not always correct. Create opportunities for dialogue. Develop an appreciation for their perspective. Resolve points of miscommunication or misunderstanding. Identify needs for technical assistance and support. U.S. Department of Housing and Urban Development Community Planning and Development 16
Monitoring Process Not a once-a-year or periodic exercise An ongoing process of: Planning Implementation Communication Follow-up A conversation with the subgrantee U.S. Department of Housing and Urban Development Community Planning and Development 17
Monitoring Plan Develop a plan at the beginning of your program year. Match available resources with local needs and capacity. Have a plan that is appropriate to your capacity. Rotate the subgrantees selected for in-depth monitoring. Extra attention to high-risk subrecipients Limited monitoring of low-risk subrecipients U.S. Department of Housing and Urban Development Community Planning and Development 18
High-Risk Subrecipients New to the CDBG program Turnover in key staff positions or a change in goals or direction Previous compliance or performance problems Carrying out high-risk activities (economic development) Undertaking multiple CDBG activities for the first time U.S. Department of Housing and Urban Development Community Planning and Development 19
High-Risk Activities Acquisition Economic development Housing U.S. Department of Housing and Urban Development Community Planning and Development 20
Limited Monitoring Low-risk grantees only Strong past performance Continuity in staffing Limited to: Operational area(s) where regulations have changed New activities the subgrantee is undertaking Past concerns or changes in operations Supported by periodic in-depth monitoring U.S. Department of Housing and Urban Development Community Planning and Development 21
Annual Monitoring Schedule Plan when during the program to monitor each subgrantee. Be aware of the flow and pace of each activity. U.S. Department of Housing and Urban Development Community Planning and Development 22
Annual Monitoring Schedule Early in the year to detect and resolve problems early Undertaking a new activity Involves new procedures or policies Requires a high level of documentation or critical accuracy Late in the year for slow-moving activities Too early, nothing to review U.S. Department of Housing and Urban Development Community Planning and Development 23
The Monitoring Checklist Components Activity Summary Status of Project Applicable Regulations Documentation Requirements Problems Encountered U.S. Department of Housing and Urban Development Community Planning and Development 24
The Monitoring Checklist Specify the particular items to be examined Varies by activity area Example: lead hazard reduction in housing Ensures correct items are examined Promotes thoroughness and consistency U.S. Department of Housing and Urban Development Community Planning and Development 25
The Monitoring Checklist Use standardized monitoring checklists or workbooks on-site. Specifies the steps you will follow to measure compliance. Increases monitoring efficiency and quality. Collects data in a form that facilitates writing up results. See appendices to Chapter 5 of Managing CDBG. U.S. Department of Housing and Urban Development Community Planning and Development 26
Staffing for Monitoring Ensure that staff: Are trained in the ideal approach and overall goals. Are familiar with program rules. Understand correct monitoring protocol. Work with standardized forms and worksheets. U.S. Department of Housing and Urban Development Community Planning and Development 27
Staffing for Monitoring A team approach to staffing the monitoring may be best when: Monitoring comprehensively. Monitoring a range of CDBG-funded activities. Serious problems are anticipated. U.S. Department of Housing and Urban Development Community Planning and Development 28
Staffing for Monitoring When more than one monitor, explain the respective roles of each staff member. Example: One staff person to review fiscal systems and records Another to look at program files and requirements U.S. Department of Housing and Urban Development Community Planning and Development 29
Preparation Desk Audit Learn about changes in a subrecipient s activities. Identify areas to examine during the on-site visit. Review all the written data you already have. Application for CDBG funding The written agreement Progress reports Reimbursement requests Documentation of previous monitoring U.S. Department of Housing and Urban Development Community Planning and Development 30
Pre-Monitoring Visit Reduces the likelihood of negative findings after the formal monitoring. Inform the subgrantee about your monitoring procedures. Discuss the information you will be examining. Point out apparent weaknesses in the subrecipient s operations. Suggest how they can be corrected before the formal monitoring visit. U.S. Department of Housing and Urban Development Community Planning and Development 31
Five Steps in a Monitoring Visit There are five basic steps to any monitoring visit: Notification Letter Entrance Conference Documentation, Data Acquisition and Analysis Exit Conference Follow-up Monitoring Letter U.S. Department of Housing and Urban Development Community Planning and Development 32
The Notification Letter Send a formal notification letter stating: Dates and the scope of the monitoring. Information you will review. Duration of the monitoring. Which of your staff will be involved. Office space you require. Members of the subrecipient s staff you may need to talk with. U.S. Department of Housing and Urban Development Community Planning and Development 33
The Entrance Conference First order of business On-site with the subgrantee Include director and appropriate financial and program staff. Clear understanding of the purpose, scope, and schedule. Communicate the grantee s obligation to determine whether the use of CDBG funds has been appropriate. U.S. Department of Housing and Urban Development Community Planning and Development 34
Documentation Create a written record of the steps followed and information reviewed. Document conversations with subgrantee staff. Annotate the monitoring checklist or worksheet with details. Use to develop monitoring results. Support any findings or concerns. Identify the sources of the information used. U.S. Department of Housing and Urban Development Community Planning and Development 35
Exit Conference At the end of your visit, meet again with key representatives. Present preliminary results. Provide an opportunity for the subgrantee to correct any misconceptions or misunderstandings. Secure additional information. Subgrantee may report on current steps to address deficiencies. U.S. Department of Housing and Urban Development Community Planning and Development 36
Monitoring Results As a result of monitoring, the grantee may reach one or more conclusions: Performance was adequate or exemplary; There were significant achievements; There were concerns that need to be brought to the attention of the subgrantee; Technical assistance was provided or is needed; and/or There were findings that require corrective actions. U.S. Department of Housing and Urban Development Community Planning and Development 37
Identified Deficiencies Where a deficiency has been found, you should categorize it as a finding or a concern. Provide guidance regarding any identified deficiencies. Any conditions which may require serious corrective action need to be identified. U.S. Department of Housing and Urban Development Community Planning and Development 38
Finding Defined A finding is a deficiency in program performance based on material noncompliance with a statutory, regulatory, or program requirement for which sanctions or other corrective actions are authorized. See Exhibit 2-2 of the CPD Monitoring Handbook for sanction authority. U.S. Department of Housing and Urban Development Community Planning and Development 39
Finding Documentation HUD recommends for documentation of a finding to include: Condition: What was wrong or what the problem was. Criteria: The regulatory or statutory requirements that were not met. Cause: Why the condition occurred. Effect: What happened because of the condition. Corrective Action: Action(s) needed to resolve the problem and the time frame by which the subgrantee is to respond. U.S. Department of Housing and Urban Development Community Planning and Development 40
Concern Defined A concern is a deficiency in program performance not based on a statutory, regulatory, or other program requirement. Sanctions or corrective actions are not authorized for concerns. The grantee should bring the concern to the attention of the grantee and recommend actions to address concerns and/or provide technical assistance. U.S. Department of Housing and Urban Development Community Planning and Development 41
Concern Documentation Documentation of a concern should include the condition, cause, and effect as in a finding. The grantee may suggest or recommend actions that the subgrantee can take to address a concern, based on sound management principles or other guidelines. Corrective actions are not required to address concerns. U.S. Department of Housing and Urban Development Community Planning and Development 42
Subgrantee Response Concerns do not require a response; findings do. Response to findings: Concur and undertake suggested corrective actions. Concur and suggest alternate corrective actions. Provide additional information to address the finding. U.S. Department of Housing and Urban Development Community Planning and Development 43
Subgrantee Response Response to concerns may also include concurrence and the provision of additional information. Remember: Monitoring is a conversation with the goal of improved subgrantee program management. U.S. Department of Housing and Urban Development Community Planning and Development 44
Monitoring Letter Sent to subgrantee within 30 days after completion of monitoring. Describes the results of the monitoring. Provides detail sufficient to clearly describe the areas which were covered and the basis for the conclusions. U.S. Department of Housing and Urban Development Community Planning and Development 45
Monitoring Letter Provides a written record of the monitoring review. Recognizes good work and improvement. Points out areas where corrective action or improvement is required. Includes your recommendations or requirements for improvement. U.S. Department of Housing and Urban Development Community Planning and Development 46
Monitoring Letter Each monitoring letter is recommended to include: The program, project, or entity monitored. The dates of the monitoring. The name(s) and title(s) of the grantee staff who performed the monitoring review. A listing of the program/project/activity areas reviewed or not reviewed. U.S. Department of Housing and Urban Development Community Planning and Development 47
Monitoring Letter Monitoring conclusions and if applicable, clearly labeled findings and concerns. If there are findings, an opportunity for the program participant to demonstrate compliance. The time frame for a grantee response to the monitoring letter. An offer of any technical assistance found to be needed and/or description of technical assistance provided in the course of monitoring. U.S. Department of Housing and Urban Development Community Planning and Development 48
Monitoring Follow-up Grantee needs to follow up on monitoring results. According to monitoring letter time frames. Review of periodic reports. Subsequent monitoring should examine the implementation of corrective measures and program improvements. U.S. Department of Housing and Urban Development Community Planning and Development 49
Resources Managing CDBG A Guidebook for Grantees on Subrecipient Oversight http://www.hud.gov/offices/cpd/communitydevelopment/library/subrecipient/ CPD Grantee Monitoring Handbook http://www.hud.gov/offices/cpd/library/monitoring/handbook.cfm Overview of NSP Monitoring http://hudnsphelp.info/media/resources/crosscuttingregs_monitoringoverview.pdf NSP Monitoring Webinar June 17, 2010 http://hudnsphelp.info/learning/index.cfm?do=viewlearningcenter U.S. Department of Housing and Urban Development Community Planning and Development 50
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