| (a) Purpose and Overview
(1) This section provides the procedures that will
be followed for monitoring for compliance with the programs in this
chapter.
(2) Any entity administering any or all of the programs
detailed in this chapter is a Subrecipient. A Subrecipient may also
administer other programs, including programs administered by other
state or federal agencies and privately funded programs. If the Subrecipient
has Contracts for other programs through the Department, including,
but not limited to, the HOME Partnerships Program, the Neighborhood
Stabilization Program, or the Texas Housing Trust Fund, the Department
may, but is not required to and does not commit to, coordinate monitoring
of those programs with monitoring of those programs under this Chapter.
(3) Any entity administering any or all of the programs
provided for in subsection (a)(2) of this section as part of a Memorandum
of Understanding (MOU), contract, or other legal agreement with a
Subrecipient is a Subgrantee.
(b) Frequency of Reviews, Notification and Information
Collection.
(1) In general, the Subrecipient or Subgrantee will
be scheduled for monitoring based on state or federal monitoring requirements
and/or a risk assessment. Factors to be included in the risk assessment
include, but are not limited to: the number of Contracts administered
by the Subrecipient or Subgrantee, the amount of funds awarded and
expended, the length of time since the last monitoring, findings identified
during previous monitoring, issues identified through the submission
or lack of submission of a Single Audit, complaints received by the
Department, and reports of fraud, waste, and/or abuse. The risk assessment
will also be used to determine which Subrecipients or Subgrantees
will have an onsite review and which may have a desk review.
(2) The Department will provide the Subrecipient or
Subgrantee with written notice of any upcoming onsite or desk monitoring
review, and such notice will be given to the Subrecipient and Subgrantee
by email to the Subrecipient's and Subgrantee's Contract contact at
the email address most recently provided to the Department by the
Subrecipient or Subgrantee. In general, a 30 calendar day notice will
be provided. However, if a credible complaint of fraud or other egregious
noncompliance is received the Department reserves the right to conduct
unannounced monitoring visits. It is the responsibility of the Subrecipients
to provide to the Department the current contact information for the
organization and the Board in accordance with §7.7 of this subchapter
(relating to Subrecipient Contact Information) and §1.22 of this
title (relating to Providing Contact Information to the Department).
(3) Upon request, Subrecipient and Subgrantee (if applicable)
must make available to the Department all books and records that the
Department determines are reasonably relevant to the scope of the
Department's review. Typically, these records may include, but are
not limited to:
(A) Minutes of the governing board and any committees
thereof, together with all supporting materials;
(B) Copies of all internal operating procedures or
other documents governing the Subrecipient's operations;
(C) The Subrecipient's Board approved operating budget
and reports on execution of that budget;
(D) The Subrecipient's strategic plan or comparable
document if applicable and any reports on the achievement of that
plan;
(E) Correspondence to or from any independent auditor;
(F) Contracts with any third parties for goods or services
and files documenting compliance with any applicable procurement and
property disposition requirements;
(G) All general ledgers and other records of financial
operations (including copies of checks and other supporting documents);
(H) Applicable Program Participant files with all required
documentation;
(I) Applicable human resources records;
(J) Monitoring reports from other funding entities;
(K) Program Participant files regarding complaints,
appeals, and termination of services; and
(L) Documentation to substantiate compliance with any
other applicable state or federal requirements including, but not
limited to, the Davis-Bacon Act, HUD requirements for environmental
clearance, Lead Based Paint, the Personal Responsibility and Work
Opportunity Act, HUD LEP requirements, and requirements imposed by
Section 3 of the Housing and Urban Development Act of 1968.
(c) Post Monitoring Procedures.
(1) In general, within 30 calendar days of the last
day of the monitoring visit, a written monitoring report will be prepared
for the Subrecipient describing the monitoring assessment and any
corrective actions, if applicable. The monitoring report will be emailed
to the Subrecipient's Board Chair and Executive Director. All Department
monitoring reports and Subrecipient responses to monitoring reports
must be provided to the governing body of the Subrecipient within
the next two regularly scheduled meetings. Issues of concern over
which there is uncertainty or ambiguity may be discussed by the Department
with the staff of cognizant agencies overseeing federal funding. Certain
types of suspected or observed improper conduct may trigger requirements
to make reports to other oversight authorities, state and federal,
including, but not limited to, the State Auditor's Office and applicable
Inspectors General.
(2) Subrecipient Response. If there are any Findings
of noncompliance requiring corrective action, the Subrecipient will
be provided 30 calendar days from the date of the email to respond,
which may be extended for good cause. In order to receive an extension,
the Subrecipient must submit a written request to the Director of
Compliance within the corrective action period, stating the basis
for good cause that justifies the extension. The Department will approve
or deny the extension request within five calendar days.
(3) Monitoring Close Out. Within 45 calendar days after
the end of the corrective action period, a close out letter will be
issued to the Subrecipient. If the Subrecipient's response satisfies
issues raised in the monitoring letter, the issue of noncompliance
will be noted as resolved. If the Subrecipient's response does not
correct all Findings, the follow-up letter will identify the documentation
that must be submitted to correct the issue.
(4) Options for Review. If, following the submission
of corrective action documentation, Compliance staff continues to
find the Subrecipient or Subgrantee in noncompliance, and the Subrecipient
disagrees, the Subrecipient may request or initiate review of the
matter using the following options, where applicable:
(A) If the issue is related to a program requirement
or prohibition of a federal program, the Subrecipient may contact
the applicable federal program officer for guidance or request that
the Department contact applicable federal program officer for guidance
without identifying the Subrecipient.
(B) If the issue is related to application of a provision
of the Contract or a requirement of the Texas Administrative Code,
the Subrecipient may request to submit an appeal to the Executive
Director consistent with §1.7 of this title (relating to Appeals
Process).
(C) The Subrecipient may request Alternative Dispute
Resolution (ADR). Subrecipient may send a proposal to the Department's
Dispute Resolution Coordinator to initiate ADR pursuant to Chapter
1, Subchapter A of this title, relating to General Policies and Procedures.
(5) If the Subrecipient does not respond to a monitoring
letter or fails to provide acceptable evidence of compliance, the
matter will be handled through the procedures described in Chapter
2 of this title, relating to Enforcement.
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