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IHCDA CDBG-D Wx/OOR Compliance Training. IHCDA Compliance and Asset Management Staff. TODAY’S WORKSHOP: Will provide a brief overview of the chapters located within the new Strategic Investment Process (SIP) Award Manual focusing specifically on CDBG-D.
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TODAY’S WORKSHOP: Will provide a brief overview of the chapters located within the new Strategic Investment Process (SIP) Award Manual focusing specifically on CDBG-D. Will focus on educating you on how these items will tie into the monitoring of your award. Letting you know what to expect and what we expect when we monitor. Will be brief. As a recipient or potential recipient of CDBG-D funds, the expectation is that you will read, review, get familiar, and ask questions after the fact about things that you are unsure of for your award. At the conclusion of this afternoon’s workshop will respond to any questions, comments, or concerns you may have.
Chapter One: Policy Requirements Applicant Deferral Form (Appendix Q in Weatherization Manual) CDBG Public Hearings (Sample notice found in Exhibit C) • Required at application submission and program completion • Legal notice must be published in each County being served • Copies of publisher’s affidavits, minutes, and sign-in sheet must be retained Match/Leverage Requirements • No requirement for CDBG-D Banked Leverage • Only eligible on awards made in1999 or later • Banked leverage generated on a CDBG or CDBG-D award cannot be used as match on a future HOME award • Banked match generated on a HOME award may be used as leverage on a future CDBG or CDBG-D award CDBG-D Duplication of Benefits Certification (Exhibit E) • Must be completed and kept on file for each beneficiary Eligible forms of homeownership • Fee Simple Title • 99-year leasehold
Chapter two: Lead Based Paint Requirements The primary cause of childhood lead poisoning is deteriorating lead-based paint and lead-contaminated dust and soil in older housing units. Although lead was banned from residential house paint in 1978 by the Consumer Product Safety Commission (CPSC), an estimated 57 million older homes still contain some lead-based paint. In most cases, LBP work should be the highest priority for rehabilitation in a home. Key Items • Brochures – ensure that the right people receive them and/or that they are posted in the appropriate location • For contractors and subcontractors • “Lead Paint Safety – A Field Guide for Painting” • For homeowners • “Protect Your Family from Lead in Your Home” • “Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools” • For organizations • The “Runs Better Unleaded” Poster must be displayed at the offices of the recipient, subrecipient, and administrator
Chapter two: Lead Based Paint Requirements Lead Hazard Testing and Clearance Process • Determine whether or not property is exempt from testing • Indentify the “Approach to Lead Hazard Evaluation and Reduction” • Varies depending on the level of assistance to the unit • Conduct the Lead Hazard Evaluation • Paint Testing • Risk Assessments • Notify the occupant of the Lead Hazard Evaluation • Must be notified within fifteen (15) days after the results have been determined • Complete Lead Hazard Reduction activities as directed according to the level of assistance and the results of the Lead Hazard Evaluation • Safe Work Practices • Paint Stabilization • Interim Controls • Abatement • Conduct the Lead Hazard Reduction and Clearance Test • Must be conducted by a licensed lead-based paint inspector, risk assessor, or clearance technician
Chapter two: Lead Based Paint Requirements 7. Provide the occupant with the Notification of Hazard Reduction and Clearance • Must provide occupants with the “Notification of Lead Hazard Reduction and Clearance” within fifteen (15) days of completion. 8. Complete and submit the “Lead Form for Set-up and Clearance” (see Chapter 12, Funds Management – CDBG-D, Exhibit C) Other things to consider • Relocation • $25,000 in federal assistance triggers abatement • Lead Hazard reduction activities that are part of the federal assistance do not count towards this limit • Example - $27,000 in rehab work on home…..$10,000 of this $27K is related to lead reduction activities…..in this case only count $17,000.
Chapter three: accessibility Recipients cannot discriminate against an otherwise qualified individual with disabilities, solely by reason of his or her disability, with regards to participation in any program or activity receiving CDBG funds. This chapter defines the recipient’s responsibilities in terms of physical and program accessibility of their CDBG program. Recipients must include the accessibility logo on all client related materials
Chapter four: Uniform relocation act "Each award recipient shall provide for reasonable benefits to any person involuntarily and permanently displaced as a result of the use of assistance received…. Owner-occupied rehabilitation • Award recipients are required to provide temporary relocation assistance in the event that a unit becomes temporarily unlivable during rehabilitation • Can be provided in the form of paying for meals, hotel, housing participants in another unit, etc. • Participation is voluntary so participants are not eligible for permanent relocation assistance • Participants are not required to receive relocation advisory notices but should be informed that relocation might occur during the initial eligibility review.
Chapter five: Civil Rights The Fair Housing Act states that it is illegal to discriminate against any person because of race, color, religion, sex, disability, familial status, or national origin All CDBG award recipients are required to take an action to affirmatively further fair housing • The action must reach the general community at-large and not be limited to low-moderate income residents only Award recipients, subrecipients, and administrators are required to post the Fair Housing Equal Opportunity Poster in their offices Award recipients must include the Fair Housing logo on all client related materials Award recipients must provide all beneficiaries with a copy of the HUD brochure entitled “You May Be A Victim Of…” (Exhibit F)
Chapter Six: Conflict of Interest Persons Covered Provisions apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the state, or of a unit of general local government, or of any designated public agencies, or sub-recipients which are receiving CDBG funds. Conflicts Prohibited No person who exercises or have exercised any functions or responsibilities with respect to CDBG activities. Persons in a position to participate in a decision-making process or gain inside information with regards to such activities. Persons that may obtain a financial interest or benefit from the activity, or have an interest or benefit from the activity. Persons that have an interest in any contract, subcontract, or agreement either for themselves or those with whom they have family or business ties.
Chapter Six: Conflict of Interest Conflict of interest requests should be submitted in writing and contain the following: • A request for an exception to the conflict of interest prohibition. • A copy of the minutes from a public meeting denoting that the affected person has publicly disclosed the conflict and has stated that he/she has withdrawn from functions or responsibilities with respect to the assisted activity in question. • An opinion from the recipient’s attorney that the interest for which an exception is sought would not violate state or local law. Uniform Conflict of Interest Disclosure Statement (Exhibit A) • If an exception is allowed, this document must be completed and submitted within fifteen (15) days to the following parties: • Indiana Housing and Community Development Authority • State Board of Accounts • Clerk of the Circuit Court of the county in which the contract was executed
Chapter seven: Section 3 Applicability of Section 3 • Recipients of HUD Community Planning & Development construction funding in excess of $200,000 in a program year • Contractors and subcontractors that receive contracts in excess of $100,000 for Section 3 covered projects/activities • The Section 3 language must be included in or attached to such contracts (Exhibit B) Requirements • Attempt to offer 30% of new employment opportunities to Section 3 residents • Attempt to award 10% of the total dollar amount of all covered construction contracts to Section 3 businesses Mandatory Reporting Requirements • Whether or not an IHCDA award generated a need for new employment or contracts, the recipient must still submit Section 3 quarterly reports to IHCDA indicating this information. • Quarterly reports are due February 1, May 1, July 1, and November 1 • Recipients are also asked to submit their own annual report directly to HUD on Form HUD-60002 (Exhibit A)
CHAPTER SEVEN: SECTION 3 Definitions • Section 3 Residents are one of the following: • Residents of Public and Indian Housing; or • Individuals that reside in the metropolitan area or nonmetropolitan county in which the Section 3 covered assistance is expended and show income does not exceed the local HUD income limits set forth for low- or very low-income households • Section 3 Business Concerns are one of the following: • Businesses that are fifty-one percent (51%) or more owned by Section 3 residents; or • Businesses whose permanent, full-time employees include persons, at least thrity (30%) of whom are currently Section 3 residents, or within three (3) years of the date of first employment with the firm were Section 3 residents; or • Businesses that provide evidence of a commitment to subcontract in excess of twenty-five percent (25%) of the dollar amount of all subcontracts to be awarded to businesses that meet the qualifications described above.
Chapter Eight: Income verification All households must be income eligible to receive assistance Each applicant must receive an income verification IHCDA uses the Part 5 definition of income which looks at the gross household income anticipated for the coming 12-month period Owner-Occupied Rehabilitation • Households must be income eligible at the time the construction contract is executed When do income verifications expire? • Income verifications are good for 6 months from the date of the initial certification. • If more than 6 months lapse, the household income must be re-verified Record Keeping • Recipients are expected to keep the following information in each beneficiary file: • Beneficiary application for assistance • Tenant Eligibility Questionnaire (Exhibit D) • Tenant Income Certification Form (Exhibit C)
Chapter Eight: Income verification Record Keeping (continued) • All sources of income w/ supporting documentation (wages, Social Security, child support, etc.) • 3rd party verifications are preferred • When utilizing paycheck stubs as support documentation, you must obtain the number of paystubs that cover three (3) consecutive months of payments • All sources of assets w/ supporting documentation (checking, savings, CD’s, etc.) • Receipt of the applicable brochures (Fair Housing, Lead Based Paint) • Any other documentation verifying the beneficiaries’ eligibility (i.e. joint custody of a child documentation, all management/recipient clarification documents , etc.) Income Inclusions/Exclusions • Pages 62 - 64 of the SIP Award Manual Asset Inclusions/Exclusions • Page 67 of the SIP Award Manual
Chapter Eight: Income verification Treatment of Assets • Imputed Income from Assets vs. Actual Income from Assets • Imputed Income from Assets • If the total cash value of all assets is greater than $5,000, multiply that amount by the HUD passbook savings rate which is currently 2% • Actual Income from Assets • The actual income generated by the asset through interest, dividends, etc. • The greater of the imputed income from assets and the actual income from assets is the figure used in the total household income calculation Methods of Verification • Third Party Verification • Reasonable effort to obtain written third-party verification is required. • Second Party & Electronic Verification • Can only be used under certain circumstances Rent and Income Limits • The current rent and income limits can be found on our website at http://www.in.gov/ihcda/2520.htm.
Chapter ten: procurement Any procurement action that takes place for the award regardless of the funding source must follow the outlined procurement process. Local Units of Government (LUG) are governed by the following laws: • Applicable Federal Regulations • CFR Part 85 • OMB Circular A-110 • OMB Circular A-87 • Applicable Indiana Procurement Laws • Public Purchases Law (IC-36-1-9) • Public Works Law (IC-36-1-12) • If the LUG is the award recipient, the local unit of government’s procurement standards must be followed. • A subrecipient or award administrator working on behalf of the LUG must still utilize these procurement standards. Procurement Methods for LUGs • Competitive Sealed Bids • Competitive Negotiation Method • Small Purchase Procedures • Non-Competitive & Sole Source Purchases
Chapter ten: procurement • Competitive Sealed Bids • All construction contracts procured by a LUG must be solicited through this method • Solicited through formal advertising • Technical Bid Specifications, Terms, and Conditions • Bidder’s List (if applicable) • Bid Opening • All bids should be read aloud and the contract awarded at a public meeting • Must maintain evaluation of bids and minutes of this meeting • Fixed-price contract is awarded to the lowest/most responsive bidder • Competitive Negotiation Method • Preparation of a Request For Proposals (RFP) • Request proposals from at least two qualified firms • The RFP must be publicized • Evaluate the proposals • Establish criteria prior to evaluation • Scoring encouraged for objectivity • Negotiate with at least two firms • Establish a Contract File
Chapter Ten: procurement • Small Purchase Procedures • For services, supplies, and materials under $25,000 • At least two quotes – at least one from MBE/WBE firm • Non-Competitive & Sole Source Purchases • May only be used under the following circumstances: • When public urgency prohibits delays in the competitive bid process • The needed material or service is available from only one source • Competition is determined inadequate after a number of sources have been solicited • Procurement by Not-for-Profit Organizations • Governed by the following federal requirements: • CFR Part 84 • OMB Circular A-110 • Required to follow competitive procurement procedures • May choose to follow their own procurement standards or the local unit of government procurement standards • If utilizing your own procurement standards they MUST be pre-approved by IHCDA • Other Requirements • MBE/WBE
Chapter ten: Procurement • At least 2 MBE/WBE firms must be solicited with each procurement action • Insurance • Award recipients will be required to provide proof of adequate builder’s risk insurance during construction and property insurance following construction for the assisted property throughout the affordability period of the award • Bonding Requirements • Applicable to any construction contracts or subcontracts exceeding $100,000 and require: • A bid guarantee from each bidder equivalent to 5% of the bid price • A performance bond on the part of the contractor for 100% of the contract price • A payment bond on the part of the contractor for 100% of the contract price; OR • In lieu of acquiring the payment and performance bonds, IHCDA will accept an irrevocable line of credit equal to the greater of the award amount or 25% of the total construction contract • Required Contract Provisions • Pages 101-102 of the SIP Award Manual • Federal Contract Provisions – Must be included in all contracts (Exhibit D) • Contractor Verification • Prior to bid award, grantees must verify that all contractors that are bidding on the project are not listed on the HUD debarred lists • Exhibit C
Chapter eleven: Environmental Review and Section 106 Review The Environmental and Section 106 Historic Review User Guides can be found in two locations: • On IHCDA’s website at http://www.in.gov/ihcda/3099.htm. • Chapter 11 of the SIP Award Manual • Exhibit A – Environmental Review User Guide • Exhibit B – Environmental Review Resources • Exhibit C – ER Forms • Exhibit D – ER Sample Notices • Exhibit E – Historic Review User Guide Keep in mind that both of these processes MUST be completed prior to executing any contracts. An IHCDA release of funds letter will not be issued until the Environmental Review process is complete. This means: • For not-for-profit recipients IHCDA has approved your Environmental Review record, the legal notice has been published, and a release of funds from HUD has been received
Chapter thirteen: modifications Possible reasons for requesting a modification: Change an award ending date Change in project activities, site or area Reallocation of funds budgeted between approved activities Change in the use of principal and interest payments received by the recipient Change in private sector participants, investments, or housing goals Change in any conditions listed in your award agreement These requests should be sent to your Real Estate Production Analyst
Chapter fourteen: construction standards All housing that is constructed or rehabilitated must meet the stricter of the Indiana State Building Code, local building codes, or manufacturer’s instructions Requirements for Physical Inspections on assisted properties • Must be inspected twice during the award term • The first inspection will occur at the completion of the documented scope of work and prior to the IHCDA inspector’s final physical inspection • This inspection must be completed by a licensed home inspector, engineer, or architect • If the paid staff of the recipient completes the work on the home, an outside third party inspector must be used • If an outside contractor is procured to complete the work then the staff of the recipient will be permitted to complete the inspection • The second inspection will be conducted upon completion of the construction of the award by your IHCDA Inspector Who can conduct third party inspections? • The inspector must have a current license with the State of Indiana Professional Licensing Agency (PLA). For information on who is licensed, how to become licensed, or how to renew/update your license, please see their website at http://www.in.gov/pla/hi.htm.
Chapter fifteen: Lien and Restrictive covenants & Affordability Requirements CDBG-D Wx/OOR Lien and Restrictive Covenant Agreement & Affordability Requirements • The completion of the LRCA is not required if the amount of CDBG-D dollars used for rehabilitation, lead-based paint, environmental review, and program delivery combined in a unit does not exceed $12,000 • The completion of the LRCA is required if the amount of CDBG-D dollars used for rehabilitation, lead-based paint, environmental review, and program delivery combined exceeds $12,000 • Term will be three (3) years • Begins on the date of closeout • Will be given to you when you with your award documents • The recipient is responsible for filing the LRCA and any amendments hereto in the Office of the Recorder of the County in which the project is located • Compliance staff will check for this document at the final monitoring
Chapter sixteen: Program monitoring and record retention IHCDA Closeout Monitoring • This is completed by an IHCDA Compliance Auditor prior to the closeout of your award to ensure compliance with federal and state rules and regulations • IHCDA will hold the final $5,000 of an award until both the final monitoring and the final inspection have been completed and all findings and concerns associated with them have been resolved Record Retention and Custodial Requirements • Financial Records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of five (5) years