Section 12.1 Monitoring Process

Completing Your Grant: Section 12.1 Monitoring Process

Overview
The purpose of the monitoring is to verify the project has met the stated goals and objectives of all federal CDBG regulations and that all contractors, subcontractors and suppliers have been paid in full and have provided final lien waivers. The primary objectives of monitoring are:

• Review Grant Recipient performance. A Grant Recipient’s performance will be monitored to ensure that activities have been completed and beneficiaries served in accordance with the contract and that funds have been expended as identified in the budget.
• Identify any necessary corrective actions. Compliance monitoring performed through a desk review or on-site review could result in prescribed corrective measures to be carried out by the Grant Recipient in order to remediate non- compliance or to address performance deficiencies.
• Identify technical assistance needs.

Successful monitoring meetings largely depend upon the organization and accuracy of record keeping by the Grant Administrator.

Monitoring Approach
CDFA does not view monitoring as a one-time event. To be an effective tool for avoiding problems and improving performance, monitoring must be an on-going process. CDFA undertakes monitoring checks at multiple stages of a project’s implementation. These monitoring steps are triggered by various events including, payment draw requests, Semi-Annual Progress Reports, and ongoing communiciation with grantees regarding issues and activities undertaken to implement their CDBG projects.

These monitoring checks during the grant project may be unobserved by the grantee unless a problem arises or until a monitoring letter is issued. The monitoring review may be a comprehensive evaluation of all aspects of compliance for the project or it may be oriented toward assessing compliance in a specific area or areas. The reviews may be conducted at CDFA’s offices or on-site. The depth and location of the monitoring will depend upon which compliance areas needed to be reviewed. Note, however, that any project could be subject to full scope monitoring of all compliance areas.

Scheduling an On-Site Visit
A visit is scheduled in advance. The Authorized Official (AO) of the grantee, as well as the grant administrator, is notified of the date, time, location and purpose of the review visit in writing. The scheduling process and notice should also outline which files and documentation will be needed during the monitoring visit.

Entrance Meeting/Interview
Once on‐site, the first thing that typically occurs is an entrance meeting/interview. CDFA staff will conduct an entrance meeting/interview to state the purpose of the review and summarize the documents and items that will be reviewed. Grantees should be prepared to provide an overview of the project as well as its status and any issues prior to the beginning of the reviews. CDFA staff will also ask about particular concerns or needs regarding the project so that technical assistance can be scheduled, if appropriate.

Monitoring of Files and Other Documentation
Utilizing appropriate checklists, the CDFA staff will review the files to determine if all requirements have been met. The primary areas being examined are consistency with the specific terms of the grant agreement and compliance with state and federal requirements.

Recordkeeping is the most important component of monitoring. Grantee files pertaining to the CDBG project must be orderly and complete. In addition, if files are maintained by or located in another office such as an engineer or clerk, these files should be obtained and available for review.

If required materials are not available on the date of the monitoring, CDFA will request that the Grantee or Grant Administrator submit the required documentation. If not submitted within the deadline established by CDFA, the issues will be listed on the official monitoring letter described in the subsection titled “Monitoring Letter and Follow-Up.”

• Finding: If there are areas that are discovered during the monitoring visit or other montinoring reviews that indicate noncompliance with the laws, regulations or other requirements, this may result in a finding. A finding of non-compliance must be remedied. A finding can result in punitive actions, like pay back of a portion or total of grant funds awarded or inability to apply for grant funds for a period of time, if corrective action is not taken in a specified manner and/or timeframe. For each finding, CDFA will indicate a corrective action, either to correct a past problem or to avoid a future problem, which must be taken by the grantee.
• Concern: A deficiency in program performance not based on a statutory, regulatory, or other program requirement is a concern. Corrective actions are not required for concerns, but CDFA may recommend actions.

Monitoring Letter and Follow-Up
The grantee will receive a formal review letter giving the results of CDFA’s monitoring review. This letter will generally be within 30 days of the conclusion of the monitoring visit; however, a longer timeframe may be appropriate based on workload and the complexity of the issues at hand. The letter will:

• Summarize the area(s) reviewed and performance expectations,
• Provide a summary and an analysis of what was discovered during the review, and
• List all findings and recommended corrective actions to resolve the findings and the timeframe in which the corrective actions must be carried out.

The review letter may also include one or more concerns. These are matters that, if not properly addressed, can become a finding and can ultimately result in sanctions. Concerns are often used to point out operational or management problems, or patterns of performance that could lead to larger problems later, even if they are not evident at the time of the review. Concerns may require some form of response on the part of the grantee.

The grantee must respond in writing within 30 days to any findings listed in the monitoring review letter.

• The grantee will describe all corrective actions taken or provide new information not reviewed during the visit. The corrective actions must be consistent with the recommendations made by CDFA in the monitoring letter.
• The grantee’s authorized official must certify that all regulations will be observed in future transactions and provide written assurance that no adverse effects occurred to the project for failure to observe said regulations.

If issues are not resolved, CDFA may impose a progressive level of punitive actions that include:

• Additional reporting
• Suspension of funding
• Additional special conditions
• Return of disallowed expenditures
• Termination of the grant

CDFA will inform the grantee if the response is sufficient to clear the findings and will provide any assistance necessary to ensure that the project is completed according to the grant agreement and all state and federal rules and regulations. No project will be closed if there are outstanding findings, including audit issues.