| (a) Purpose and Overview.
(1) This section provides the procedures that will
be followed for monitoring for compliance with the programs in this
chapter, 10 TAC Chapter 6, including LIHWAP.
(2) Any entity administering any or all of the programs
detailed in this chapter, 10 TAC Chapter 6, 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 Emergency Solutions Grants, Ending
Homelessness Fund, Homeless Housing and Services Program, HOME Partnerships
Program, the Neighborhood Stabilization Program, or the State Housing
Trust Fund, the Department may, but is not required to and does not
commit to, coordinate monitoring of those programs with monitoring
of Community Affairs Division funds under this subchapter.
(3) Any entity administering any or all of the programs
provided for in subsection (a) 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, a Subrecipient 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, 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 will have an onsite review and which
may have a desk review.
(2) The Department will provide a Subrecipient 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 chief executive officer at the email address
most recently provided to the Department by the Subrecipient. In general,
a 30 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 Subrecipient to provide to the Department
the current contact information for the organization and the Board
in accordance with §6.6 of this chapter (relating to Subrecipient
Contact Information and Required Notifications) and §1.22 of
this title (relating to Providing Contact Information to the Department).
(3) Upon request, a Subrecipient 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 customer files with all required documentation;
(I) Applicable human resources records;
(J) Monitoring reports from other funding entities;
(K) Customer files regarding complaints, appeals and
termination of services; and
(L) Documentation to substantiate compliance with any
other applicable Department contract provisions and state or federal
requirements including, but not limited to UGMS, TxGMS, 2 CFR Part
200 Uniform Administrative Requirements, Cost Principles, Audit Requirements
for Federal Awards, Lead Based Paint, the Personal Responsibility
and Work Opportunity Act, and limited English proficiency requirements.
(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 Board Chair and the Subrecipient's Executive Director. For
a Private Nonprofit Organization, 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. For a Public Organization all Department monitoring
reports and Subrecipient responses to monitoring reports must be provided
to the governing body of the Subrecipient, and for a CSBG Subrecipient
to the advisory board 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 by the Department 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 supplies evidence
establishing continual compliance that negates the finding of noncompliance,
the issue of noncompliance will be rescinded. If the Subrecipient's
timely response satisfies all findings and concerns noted in the monitoring
letter, the issue of noncompliance will be noted as corrected. In
some circumstances, the Subrecipient may be unable to secure documentation
to correct a finding. In those instances, if there are mitigating
circumstances, the Department may note the finding is not corrected
but close the issue with no further action required. If the Subrecipient's
response does not correct all findings noted, the close out 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 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) A Subrecipient may request Alternative Dispute
Resolution (ADR). Subrecipient should send a proposal to the Department's
Dispute Resolution Coordinator to initiate ADR pursuant to §1.17
of this title (relating to Alternative Dispute Resolution).
(5) If a Subrecipient does not respond to a monitoring
letter or fail 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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