oversight

The State of Iowa Misspent Community Development Block Grant Disaster Assistance Funds and Failed To Check for Duplicate Benefits

Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-03-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                 Issue Date
                                                                       March 10, 2010
                                                                 Audit Report Number
                                                                       2010-KC-1001




TO:         Scott G. Davis, Director, Disaster Recovery and Special
             Issues Division, DGBD


           //signed//
FROM:      Ronald J. Hosking, Regional Inspector General for Audit, 7AGA


SUBJECT: The State of Iowa Misspent Community Development Block Grant Disaster
         Assistance Funds and Failed To Check for Duplicate Benefits



                                   HIGHLIGHTS

 What We Audited and Why

             We audited the State of Iowa’s (State) Jumpstart Business Assistance (Jumpstart)
             program. We reviewed 432 grants provided to the City of Cedar Rapids (City).
             Our audit objective was to determine whether the State ensured that the City
             provided Jumpstart funds to only eligible businesses and that these businesses did
             not receive duplicate Federal benefits.

             We audited the State because it received $799 million in disaster funding from the
             U.S. Department of Housing and Urban Development (HUD). The funding was
             comprised of $282 million through the Community Development Block Grant
             (CDBG) program in 2008 and an additional $517 million in disaster aid in 2009 to
             help it recover from the floods of 2008.
What We Found


           The State misspent more than $10.5 million of its CDBG disaster funding and
           failed to check for duplicate benefits before awarding the funds. It provided
           Jumpstart disaster assistance funds to 305 of 406 businesses without supporting
           their eligibility for funding. It also failed to verify that the 406 Jumpstart
           recipients did not receive duplicate benefits through any other program, insurance,
           or source before awarding the disaster assistance funds.


What We Recommend

           We recommend that the Director, Disaster Recovery and Special Issues Division,
           require the State to (1) provide documentation to support that $10.5 million in
           disaster assistance funds was paid to businesses in accordance with Iowa State
           law or reimburse the CDBG program from non-Federal sources for amounts that
           it cannot support and (2) perform oversight and monitoring of the disaster
           recovery activities in a timely manner. We also recommend that the Director
           require the State to perform a duplication of benefits check on all 406 businesses
           that received Jumpstart funds to ensure compliance with the Robert T. Stafford
           Disaster Relief and Emergency Assistance Act and repay any amounts that are
           found to have been duplicated.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.


Auditee’s Response

           We provided the draft report to the State on January 22, 2010, and requested a
           response by February 5, 2010. The State provided written comments on February
           5, 2010, and disagreed with finding 1 but agreed with finding 2.

           The complete text of the auditee’s response, along with our evaluation of that
           response, can be found in appendix B of this report.




                                            2
                              TABLE OF CONTENTS

Background and Objective                                                                4

Results of Audit
        Finding 1: The State Provided Disaster Assistance Funds to Businesses Without   5
                   Supporting Their Eligibility for Funding

        Finding 2: The State Failed To Check for Duplicate Benefits Before Awarding     9
                   Disaster Assistance Funds

Scope and Methodology                                                                   11

Internal Controls                                                                       12

Appendixes
   A.   Schedule of Questioned Costs                                                    13
   B.   Auditee Comments and OIG’s Evaluation                                           14
   C.   Schedule of Unsupported Grants                                                  22
   D.   Criteria                                                                        33




                                              3
                       BACKGROUND AND OBJECTIVE

On May 27, 2008, the Federal Emergency Management Agency (FEMA) declared various
counties in the State of Iowa (State) as disaster areas as a result of severe storms and flooding.
The disaster declaration allowed those counties to receive Federal aid from FEMA, the Small
Business Administration (SBA), and the U.S. Army Corps of Engineers.

In the late spring and early summer of 2008, the State suffered a series of tornados, followed by
massive floods. In some cases, the same community was hit by both events. Among the larger
communities, Cedar Rapids, Iowa’s second largest city, was especially hard hit. An estimated
2,400 businesses were damaged physically, and more than 3,000 others suffered economic
losses.

The State was awarded $282 million in disaster funding through the Community Development
Block Grant (CDBG) program in 2008 and an additional $517 million in disaster aid in 2009 to
help it recover from the floods, bringing the State’s total disaster funding to $799 million. As of
September 30, 2009, the State had spent nearly $31 million of these funds, of which nearly $14.9
million was for the City of Cedar Rapids’ (City) Jumpstart Business Assistance (Jumpstart)
program.

The Iowa Department of Economic Development (Department) was tasked with administering
the disaster recovery activities of the State. The Department’s mission is to enhance economic
development of the State and provide for job creation and increased prosperity and opportunities
for the citizens of the State by providing direct financial and technical assistance and training to
businesses and individuals and coordinating other State, local, and Federal economic
development programs. The Department has a nine-member voting board appointed by the
governor and seven ex-officio nonvoting members and is administered by an executive director
appointed by the governor.

The Department contracted with the City to administer the Jumpstart program. The City in turn
subcontracted the administration of Jumpstart to the local chamber of commerce. The Jumpstart
program was meant to provide financial assistance to businesses suffering physical damage or
economic loss due to the disasters that had been approved for and received a disaster loan from
an eligible lender. The financial assistance offered was a loan that would be forgiven if the
business reopened within 12 months of the award date. The maximum amount of assistance
provided to a business was 25 percent of the disaster loan from an eligible lender, up to $50,000.

Our objective was to determine whether the State ensured that the City provided Jumpstart funds
to only eligible businesses and that these businesses did not receive duplicate Federal benefits.




                                                  4
                                 RESULTS OF AUDIT

Finding 1: The State Provided Disaster Assistance Funds to Businesses
           Without Supporting Their Eligibility for Funding
The State provided Jumpstart disaster assistance funds to 305 of 406 businesses without
supporting their eligibility for funding. This condition occurred because the State failed to
monitor the Jumpstart program and misinterpreted State law. As a result, it misspent more than
$10.5 million of its CDBG disaster funding.


Through the Jumpstart program, the State provided disaster assistance funds to 305 of 406
businesses without supporting their eligibility for funding. Appendix C contains a schedule of the
deficiencies identified in each of the 305 loans.

 Businesses Without Executed
 Loan Documents

               The Department provided forgivable loans (grants) to 305 businesses that did not
               document the receipt of disaster loans from eligible lenders as evidenced by
               executed loan documents or loan disbursement. Iowa State law and the U.S.
               Department of Housing and Urban Development (HUD)-approved action plan
               specify that to be eligible for disaster assistance funds, a business must have
               received a disaster loan. Specifically, the law requires the submission of executed
               loan documents.

               For example, for application #793, the City obtained only verbal confirmation of a
               disaster loan for $100,000 rather than written confirmation. In the case of
               application #791, the City failed to obtain loan documentation to support $50,000 in
               grants provided to the business. In applications #667, #715, #717, #815, and others,
               the businesses provided only loan authorization documents and not the actual
               executed promissory note or loan agreement as required by State law. In
               applications #1014 and #1082, two related entities used the same loan document to
               secure $100,000 ($50,000 each) in grants.

 Businesses That Incorporated
 After the Flood

               The Department provided grants to two businesses that incorporated after the floods
               of 2008, applications #1190 and #1081. Iowa State law and the HUD-approved
               action plan specify that to be eligible for disaster assistance funds, a business must
               have sustained damage or loss due to the 2008 disasters. The floods occurred in



                                                 5
           May 2008; however, the business submitting application #1190 incorporated in
           September 2008, and the business submitting application #1081 incorporated in
           October 2008.

Grants Greater Than 25
Percent of Bank Loan Amount


           The Department provided grants to two businesses that were greater than 25
           percent of the loan documentation submitted. Iowa State law and the HUD-
           approved action plan specify that disaster assistance is limited to 25 percent of the
           disaster loan received, up to a maximum of $50,000.

           For application #561, the Department provided $50,000 in grants to the business
           when it documented only $177,700 in bank loans, which would result in an
           allowable maximum grant amount of $44,425. For application #965, the
           Department provided $40,000 in grants to the business when it documented only
           $40,000 in bank loans, which would result in an allowable maximum grant
           amount of $10,000.

Grants Based on Mortgages


           The Department provided grants to two businesses based on mortgage
           documentation rather than disaster loans, contrary to the requirements.

           For example, in applications #983, #1078, #1079, and #1080, the Department
           provided $12,500 in grants to each borrower participating in the same business
           and that provided the same mortgage approval document for $200,000. In the
           case of application #1145, it provided $50,000 in grants to a borrower that
           produced executed loan documents for the purchase of a $500,500 building.

Lack of On-Site Monitoring


           The Department failed to perform on-site monitoring of the Jumpstart business
           assistance program. It admitted that it failed to perform on-site monitoring of the
           Jumpstart program and added that it was implementing procedures for monitoring
           its business programs.

           The Department also explained that its staff was not experienced in monitoring
           CDBG business programs. It had two staff members that handled business
           programs, but one of them left and was replaced by someone who was transferred
           from another unit to assist. Because the Department did not monitor the program,
           it was not aware of the problems in the administration of the program. For



                                             6
            example, the Department incorrectly thought that the City required the submission
            of Internal Revenue Service Federal tax returns and Schedule Cs (Form 1040) by
            sole proprietorships that received assistance.

Violation of State Law and
HUD Action Plan

            The Department believed that State law did not intend for disaster loans to be
            accepted by or disbursed to Jumpstart recipients before these recipients were
            eligible for Jumpstart disaster assistance. It erroneously interpreted Iowa
            Administrative Code, section 261, chapter 78, and the HUD-approved action plan.
            The Department’s position was that the offer of a loan by an eligible lender
            provided sufficient evidence of appropriate due diligence. However, the law
            clearly states that businesses must have executed loan documents to obtain
            Jumpstart funds equal to 25 percent of the loan received. Further, the Department
            told us that it had advised the City that it did not require executed loan documents.
            Appendix D contains a description of the criteria.

CDBG Funds Misspent

            As a result of the conditions described above, the Department misspent more than
            $10.5 million of its CDBG disaster funding. The following table summarizes the
            material deficiencies identified.

                                                         Number of          Amount
                       Categories of deficiencies        businesses         awarded
                  Lack of executed loan documents           292             $10,180,226
                  Lack of loan documentation                 2                 $100,000
                  Business incorporated after flood          2                   $7,070
                  Grants greater than 25% of bank loan       2                  $45,575
                  Grants based on mortgage                   5                 $100,000
                  Same loan document used for
                  two businesses                              2                 $100,000
                  Total                                      305             $10,532,871

Recommendations

            We recommend that the Director of the Disaster Recovery Assistance and Special
            Issues Division require the State to

            1A.      Provide documentation to support that $10,532,871 in Jumpstart disaster
                     assistance funds was paid to businesses in accordance with Iowa State law




                                              7
      or reimburse the CDBG program from non-Federal sources for amounts
      that it cannot support.

1B.   Perform oversight and monitoring of the disaster recovery activities in a
      timely manner.




                               8
Finding 2: The State Failed To Check for Duplicate Benefits Before
           Awarding Disaster Assistance Funds
The State failed to check for duplicate benefits before awarding disaster assistance funds. This
condition occurred because the State believed that the risk of duplicate benefits was low. As a
result, HUD had no assurance that the State complied with the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (Stafford Act) and prevented duplicate benefits.



 Duplicate Benefits Not Verified
 Before Assistance Was
 Provided

              The Department failed to verify that the 406 Jumpstart recipients did not receive
              duplicate benefits through any other program, insurance, or source before
              awarding disaster assistance funds. This verification is necessary to satisfy the
              Stafford Act, which requires that no business will receive assistance for any loss
              for which it has already received financial assistance. See appendix D for the
              detailed criteria.

              For example, the Department was supposed to check with SBA and other lending
              institutions before providing Jumpstart assistance to applicants. This measure
              was intended to ensure that the applicants had not already received financial
              assistance for the same purposes from the other entities. The Department began
              awarding Jumpstart funds in December 2008 but did not begin checking with
              SBA until February 2009. Additionally, it had not checked with other lending
              institutions as of June 2009 when it had spent all of the Jumpstart funds.

 Risk of Duplicate Benefits
 Considered Low


              The Department incorrectly believed that there was no possibility for duplication
              of benefits with SBA funds because Jumpstart funds were meant for working
              capital and SBA loans were meant for other purposes. However, SBA offers
              physical disaster business loans and economic injury disaster loans to disaster-
              affected businesses. The purpose of economic injury disaster loans is to provide
              businesses with operating funds until they recover. These funds can be used to
              make payments on short-term notes, accounts payable, and installment payments
              on long-term notes. Therefore, the SBA loans and Jumpstart funds could be used
              for the same purposes.




                                               9
Insurance Proceeds and State
Assistance Not Considered


           The Department failed to consider the possibility that insurance proceeds and
           State-funded (i.e., non-Federal) disaster assistance could create duplicate benefits.
           According to the Department, it failed to consider insurance proceeds as well as
           State funds in determining whether recipients had duplicate benefits. When it
           initially reviewed the Stafford Act, it did not realize that insurance proceeds and
           State funds should be considered during the duplicate benefits check.

Lack of Assurance of
Compliance with Laws

           As a result of the conditions described above, HUD had no assurance that the
           Department complied with the Stafford Act and prevented duplicate benefits.

Recommendations

           We recommend that the Director of the Disaster Recovery Assistance and Special
           Issues Division require the State to

           2A.    Perform a duplication of benefits check on all 406 businesses that received
                  Jumpstart funds to ensure compliance with the Stafford Act.

           2B.    Repay any amounts found to be duplicated.




                                            10
                        SCOPE AND METHODOLOGY

To accomplish our objective, we reviewed

       •   Applicable Code of Federal Regulations requirements, the Stafford Act, Office of
           Management and Budget circulars, HUD handbooks, and HUD manuals;
       •   Applicable sections of the Iowa Administrative Code;
       •   Department duplication of benefits procedures;
       •   Relevant audit reports;
       •   Applicable contracts and agreements; and
       •   Jumpstart program applicant files.

We also interviewed applicable Department and City contractor staff.

From December 2008 through July 2009, the State provided 406 businesses with more than
$14.7 million in Jumpstart funds. We reviewed all 432 Jumpstart applications submitted by
these businesses.

While reviewing the recipient files, we examined the loan documents to determine whether they
had been executed and used an online public records database to determine whether the
businesses had obtained bank loans. Also, we obtained bank records and State draw records to
determine whether the businesses received the funds. Additionally, we searched the Iowa
secretary of state’s Web site to determine whether Jumpstart recipients were in business before
the floods of 2008.

We relied on computer-processed data provided by the contractor that managed the Jumpstart
program. During the audit, we assessed the reliability of the data and found the data to be
adequate. We performed sufficient tests of the data and based on the assessments and testing, we
concluded that the data were sufficiently reliable to be used in meeting our objectives.

We performed audit work from August through November 2009 at the Department’s office at
200 East Grand Avenue, Des Moines, IA, and at the Corridor Company Works office at 222 3rd
Street SE, Suite 600, Cedar Rapids, IA.

We performed our review in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




                                              11
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following controls are achieved:

   •   Program operations,
   •   Relevance and reliability of information,
   •   Compliance with applicable laws and regulations, and
   •   Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.



 Relevant Internal Controls
              We determined that the following internal controls were relevant to our audit
              objective:

              •       Controls to ensure that CDBG funds were disbursed only to eligible
                      recipients.

              We assessed the relevant controls identified above.

              A significant weakness exists if management controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.

 Significant Weakness

              Based on our review, we believe that the following item is a significant weakness:

              •       The State did not have adequate controls in place to ensure that CDBG funds
                      were disbursed only to eligible recipients.




                                               12
                                     APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS

                      Recommendation number              Unsupported 1/



                                1A                          $10,532,871


1/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of the audit. Unsupported
     costs require a decision by HUD program officials. This decision, in addition to
     obtaining supporting documentation, might involve a legal interpretation or clarification
     of departmental policies and procedures.




                                             13
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION

Ref to OIG Evaluation   Auditee Comments




Comment 1




                         14
Ref to OIG Evaluation   Auditee Comments




Comment 2




Comment 3




                         15
Ref to OIG Evaluation   Auditee Comments




                         16
Ref to OIG Evaluation   Auditee Comments




                         17
Ref to OIG Evaluation   Auditee Comments




                         18
Ref to OIG Evaluation   Auditee Comments




                         19
Ref to OIG Evaluation   Auditee Comments




                         20
                         OIG Evaluation of Auditee Comments

Comment 1   We compared the State's use of funds to 1) the original code language which
            required receipt of a loan, 2) the amended code language which required executed
            loan documents, and 3) the action plan which required receipt of a loan. All three
            of these required actual receipt of a loan rather than merely a loan approval. We
            disagree that the code amendment was in error. We believe that the amendment
            required the presentation of documentation to show that the businesses actually
            obtained disaster loans. The intent of the program was to ensure that viable
            businesses obtained grant amounts, based on discussions with Department staff.
            Loan approval by a bank does not necessarily mean that a loan has been fully
            underwritten or that all due diligence has been performed. The Department's files
            did not contain evidence that these loans were properly underwritten. In fact,
            some of the loan approval letters indicated that further underwriting would be
            needed before final approval.

Comment 2    The Department has taken a positive step by developing a monitoring policy.
            The Department should ensure that all programs receive on-site monitoring to
            ensure that any problems discovered can be remedied.

Comment 3   The Department has taken a positive step by submitting its list of awards to the
            SBA. The Department should also ensure that all insurance proceeds and other
            forms of disaster assistance received by businesses that did not apply for SBA
            assistance are accounted for and any duplication remedied. This should help
            ensure that all potential duplicate benefits are identified.




                                            21
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS

         Business       Stated    Jumpstart grant    Verified loan     Unsupported
        application      loan        amount          disbursement    Jumpstart amount
          number       amount        awarded            amount          awarded
  1         517        $227,500         $50,000           $0                  $50,000
  2         519          $62,700        $15,675           $0                  $15,675
  3    523 and 920       $58,353        $14,588         $42,000                 $4,088
  4         531        $350,800         $50,000           $0                  $50,000
  5         533        $220,000         $50,000         $86,000               $28,500
  6         539          $50,000        $12,500           $0                  $12,500
  7         540        $504,300         $50,000           $0                  $50,000
  8         557        $265,000         $50,000           $0                  $50,000
  9         558        $200,000         $50,000           $0                  $50,000
 10         561        $177,700         $50,000           $0                    $5,575
 11         566        $200,000         $50,000           $0                  $50,000
 12         572        $106,400         $26,600         $86,400                 $5,000
 13         586        $525,000         $50,000           $0                  $50,000
 14         587          $50,000        $12,500           $0                  $12,500
 15         588          $10,000         $2,500           $0                    $2,500
 16         601          $11,700         $2,925           $0                    $2,925
 17         603        $119,300         $29,825           $0                  $29,825
 18         605        $419,700         $50,000           $0                    $7,575
         607 , 964, 
 19      and 1086      $200,000          $50,000         $0                   $50,000
 20         613        $616,600          $50,000         $0                   $50,000
 21         617        $220,100          $50,000         $0                   $50,000
 22         619        $234,400          $50,000         $0                   $50,000
 23         622        $220,100          $50,000         $0                   $15,000
 24         625        $300,000          $50,000         $0                   $37,500
 25         626        $162,800          $40,700       $87,800                $18,750
 26         627        $202,400          $50,000         $0                   $50,000
 27         629          $8,100           $2,025         $0                    $2,025
 28         630        $213,800          $50,000      $290,000                $50,000
 29         635        $106,200          $26,550         $0                   $26,550
 30         638        $250,000          $50,000         $0                   $50,000
      Total                           $1,136,388                             $926,488




                                           22
Appendix C

              SCHEDULE OF UNSUPPORTED GRANTS

        Business        Stated    Jumpstart grant    Verified loan     Unsupported
       application       loan        amount          disbursement    Jumpstart amount
         number        amount        awarded            amount          awarded
 31         640          $55,000        $13,750           $0                  $13,750
 32         641        $421,300         $50,000           $0                  $50,000
 33         642        $250,000         $50,000           $0                  $50,000
 34         643        $105,000         $26,250           $0                  $26,250
 35         650        $350,000         $50,000           $0                  $50,000
 36         653          $47,600        $11,900           $0                  $11,900
 37         654          $15,000         $3,750           $0                    $3,750
 38         657        $300,000         $50,000           $0                  $50,000
 39         658        $193,001         $48,250           $0                  $48,250
        662, 950 
 40     and1033        $200,000          $50,000       $91,200                $27,200
 41         664        $100,000          $25,000         $0                   $25,000
 42   667 and 1098     $200,000          $50,000      $150,000                $12,500
 43         680        $125,000          $31,250         $0                   $31,250
 44         687        $110,000          $27,500         $0                   $27,500
 45         691        $270,600          $50,000         $0                   $50,000
 46         692        $174,000          $43,500         $0                   $43,500
 47         698        $150,000          $37,500         $0                   $37,500
 48         702        $197,807          $49,452         $0                   $49,452
 49         703        $130,000          $32,500         $0                   $32,500
 50         705        $250,000          $50,000         $0                   $50,000
 51         708        $190,000          $47,500         $0                   $47,500
 52         709        $200,000          $50,000         $0                   $50,000
 53         711        $160,000          $40,000         $0                   $40,000
 54         715        $200,000          $50,000         $0                   $50,000
 55         716        $200,000          $50,000         $0                   $50,000
 56         717        $200,000          $50,000         $0                   $50,000
 57         721       $1,500,000         $50,000         $0                   $50,000
 58         724        $200,000          $50,000      $150,000                $12,500
 59         725          $68,200         $17,050         $0                   $17,050
 60         736          $90,300         $22,575         $0                   $22,575
      Total                           $1,177,727                           $1,079,927




                                           23
Appendix C

              SCHEDULE OF UNSUPPORTED GRANTS


         Business      Stated    Jumpstart grant   Verified loan     Unsupported
        application     loan        amount         disbursement    Jumpstart amount
          number      amount        awarded           amount          awarded
 61         737       $105,000         $26,250          $0                  $26,250
 62         738         $30,000         $7,500          $0                    $7,500
 63         739       $200,000         $50,000          $0                  $50,000
 64         744       $221,400         $50,000          $0                  $50,000
 65         745         $50,000        $12,500          $0                  $12,500
 66         746         $60,000        $15,000          $0                  $15,000
 67         747       $200,000         $50,000          $0                  $50,000
 68    748 and 994    $100,000         $25,000          $0                  $25,000
 69         749         $88,300        $22,075          $0                  $22,075
 70         750       $114,000         $28,500        $54,000               $15,000
 71         753       $200,000         $50,000          $0                  $50,000
 72         765       $200,000         $50,000          $0                  $50,000
 73   779 and 1095    $200,000         $50,000          $0                  $31,875
 74         780         $75,800        $18,950          $0                  $18,950
 75         781         $33,400         $8,350          $0                    $8,350
 76         783       $238,800         $50,000          $0                  $50,000
 77         784       $200,000         $50,000          $0                  $50,000
 78   785 and 1064    $200,000         $50,000          $0                  $50,000
 79         786         $75,000        $18,750          $0                  $18,750
 80         788         $50,000        $12,500          $0                  $12,500
 81         791       $425,000         $50,000          $0                  $50,000
 82         793       $200,000         $50,000          $0                  $50,000
 83         794         $75,000        $18,750          $0                  $18,750
 84         795         $50,000        $12,500          $0                  $12,500
 85         799       $125,000         $31,250          $0                  $31,250
 86         800       $200,000         $50,000          $0                  $50,000
 87         801       $200,000         $50,000          $0                  $50,000
 88         811         $25,700         $6,426          $0                    $6,426
 89         812         $88,400        $22,100          $0                  $22,100
 90         813       $122,900         $30,725        $72,900               $12,500
      Total                           $967,126                             $917,276




                                          24
Appendix C

              SCHEDULE OF UNSUPPORTED GRANTS


        Business        Stated    Jumpstart grant  Verified loan     Unsupported
       application       loan        amount        disbursement    Jumpstart amount
         number        amount        awarded          amount          awarded
 91         815          $12,000          $3,000        $0                    $3,000
 92         818        $202,500          $50,000        $0                   $50,000
 93         820        $210,000          $50,000        $0                   $35,000
 94         821        $222,040          $50,000        $0                   $50,000
 95         823        $250,000          $50,000        $0                   $50,000
 96         829        $200,000          $50,000        $0                   $50,000
 97         832          $16,000          $4,000        $0                    $4,000
 98         837          $71,400         $17,850        $0                   $17,850
 99         838        $225,000          $50,000        $0                   $50,000
100         839          $25,000          $6,250        $0                    $6,250
101         841          $70,542         $17,535        $0                   $17,535
102         842        $100,000          $25,000        $0                   $25,000
103         843        $200,000          $50,000        $0                   $50,000
104   844 and 1094     $200,000          $50,000        $0                   $23,075
105         846          $50,000         $12,500        $0                   $12,500
106   850 and 1182     $185,000          $46,250        $0                   $46,250
107         851          $24,000          $6,000        $0                    $6,000
108         852          $18,800          $4,700        $0                    $4,700
109         853        $175,000          $43,750      $48,900                $31,525
110         854        $383,400          $50,000        $0                   $50,000
111         856        $227,000          $50,000        $0                   $50,000
112         858        $250,000          $50,000        $0                   $50,000
113         862          $57,000         $14,250        $0                   $14,250
114         863        $200,000          $50,000        $0                   $50,000
115         870        $245,000          $50,000        $0                   $50,000
116         877           $6,000          $1,500        $0                    $1,500
117         878        $315,700          $50,000        $0                   $50,000
118         880        $230,000          $50,000        $0                   $50,000
119         884       $1,200,000         $50,000        $0                   $50,000
120         886          $61,000         $15,250        $0                   $15,250
      Total                           $1,017,835                           $963,685




                                           25
Appendix C

              SCHEDULE OF UNSUPPORTED GRANTS


         Business   Stated loan Jumpstart grant  Verified loan     Unsupported
        application   amount       amount        disbursement    Jumpstart amount
          number                   awarded          amount          awarded
121   888 and 1107    $192,000         $48,000        $0                  $48,000
122         889       $190,000         $47,500        $0                  $47,500
123         890        $22,862          $5,715        $0                    $5,715
124         893       $100,000         $25,000        $0                  $25,000
125         894       $250,000         $50,000        $0                  $50,000
126         898       $200,000         $50,000        $0                  $50,000
127         899       $200,000         $50,000      $48,000               $38,000
128         905        $70,000         $17,500      $50,000               $12,500
129    906 and 992    $208,400         $50,000        $0                  $50,000
130    907 and 998    $200,408         $50,000      $50,408               $37,398
131         911       $200,000         $50,000        $0                  $50,000
132         919       $354,200         $50,000        $0                  $50,000
133         931       $200,000         $50,000        $0                  $50,000
134         932       $101,100         $25,275      $36,600               $16,125
135         933        $30,000          $7,500        $0                    $7,500
136         940       $200,000         $50,000        $0                  $50,000
137         941       $111,700         $27,925      $46,700               $11,250
138   942 and 1061    $110,800         $27,700        $0                  $27,700
139         948       $200,000         $50,000        $0                  $50,000
140         949       $100,000         $25,000        $0                  $25,000
141         951       $305,900         $50,000        $0                  $50,000
142   952 and 1128    $200,000         $50,000        $0                  $50,000
143         954       $200,000         $50,000        $0                  $50,000
144         955       $200,000         $50,000        $0                  $50,000
145         956       $300,000         $50,000        $0                  $50,000
146         958       $136,200         $34,050        $0                  $34,050
147         959       $200,000         $50,000        $0                  $50,000
148         960       $200,000         $50,000        $0                  $50,000
149         961       $250,000         $50,000        $0                  $50,000
150         963       $200,000         $50,000        $0                  $50,000
      Total                         $1,241,165                         $1,185,738




                                         26
Appendix C

              SCHEDULE OF UNSUPPORTED GRANTS


        Business       Stated    Jumpstart grant Verified loan     Unsupported
       application      loan        amount       disbursement    Jumpstart amount
         number       amount        awarded         amount          awarded
151         965         $40,000        $40,000        $0                   $40,000
152         968         $55,035         $3,750        $0                    $3,750
153         969       $250,000         $50,000        $0                   $50,000
154         970         $40,000        $10,000        $0                   $10,000
155         971       $200,000         $50,000        $0                   $37,500
156         972       $230,000         $50,000        $0                   $50,000
157         973         $14,000         $3,500        $0                    $3,500
158         975       $200,000         $50,000        $0                   $50,000
159   980 and 1165    $200,000         $50,000        $0                   $50,000
160         981       $200,000         $50,000        $0                   $50,000
161         982       $220,000         $50,000        $0                   $50,000
162         983         $50,000        $12,500        $0                   $12,500
163         984         $10,000         $2,500        $0                    $2,500
164         985         $25,000         $6,250        $0                    $6,250
165         986       $200,000         $50,000        $0                   $50,000
166         987       $200,000         $50,000        $0                   $50,000
167         988         $50,000        $12,500        $0                   $12,500
168         989          $7,400         $1,850        $0                    $1,850
169         990         $40,000        $10,000        $0                   $10,000
170         991       $125,000         $31,250        $0                   $31,250
171         999       $172,500         $43,125        $0                   $43,125
172       1001        $200,000         $50,000        $0                   $50,000
173       1002        $250,000         $50,000        $0                   $50,000
174       1003          $20,000         $5,000        $0                    $5,000
175       1004        $200,000         $50,000        $0                   $50,000
176       1005        $100,000         $25,000        $0                   $25,000
177       1008        $200,000         $50,000        $0                   $50,000
178       1010          $59,300        $14,825        $0                   $14,825
179       1013        $184,300         $46,075        $0                   $46,075
180       1014        $200,000         $50,000        $0                   $50,000
      Total                           $968,125                           $955,625




                                         27
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS

        Business         Stated    Jumpstart grant    Verified loan     Unsupported
       application        loan        amount          disbursement    Jumpstart amount
         number         amount        awarded            amount          awarded
181       1019            $20,092          $5,023          $0                    $5,023
182       1021          $200,000         $50,000           $0                   $50,000
183       1022          $200,000         $50,000           $0                   $50,000
184       1023          $200,000         $50,000           $0                   $50,000
185       1029          $240,000         $50,000           $0                   $50,000
186       1030            $40,000        $10,000           $0                   $10,000
187       1031            $40,000        $10,000           $0                   $10,000
188       1032         $2,850,000        $50,000           $0                   $50,000
189       1034          $200,000         $50,000           $0                   $50,000
190       1035          $396,100         $50,000           $0                   $50,000
191       1039         $4,500,000        $50,000           $0                   $50,000
192       1041          $200,000         $50,000           $0                   $50,000
193       1042            $33,488          $8,513          $0                    $8,513
194       1043          $750,000         $50,000           $0                   $50,000
195       1044          $200,000         $50,000           $0                   $50,000
196       1050            $10,000          $2,500          $0                    $2,500
197       1051          $200,000         $50,000           $0                   $50,000
198       1052            $91,697        $22,924           $0                   $22,924
199       1053          $200,000         $50,000           $0                   $50,000
200       1057         $5,804,000        $50,000           $0                   $50,000
201       1058            $20,000          $5,000          $0                    $5,000
202       1059          $398,300         $50,000           $0                   $50,000
203       1062            $46,000        $11,500         $30,069                 $3,983
204       1063          $100,000         $25,000           $0                   $25,000
205       1065            $32,580          $8,145          $0                    $8,145
206       1066          $100,000         $25,000           $0                   $25,000
       1069, 1137,  
207     and 1240         $90,950          $22,737          $0                  $22,737
208       1071          $250,000          $50,000          $0                  $50,000
209       1073          $100,000          $25,000          $0                  $25,000
210       1076          $500,000          $50,000          $0                  $50,000
      Total                            $1,031,342                           $1,023,825




                                            28
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS


        Business       Stated    Jumpstart grant  Verified loan     Unsupported
       application      loan        amount        disbursement    Jumpstart amount
         number       amount        awarded          amount          awarded
211       1078          $50,000         $12,500        $0                   $12,500
212       1079          $50,000         $12,500     $250,000                $12,500
213       1080          $50,000         $12,500     $225,000                $12,500
214       1081        $100,000           $2,070     $100,000                 $2,070
215       1082        $200,000          $50,000        $0                   $50,000
216       1084          $45,000         $11,250        $0                   $11,250
217       1085        $110,000          $27,500        $0                   $27,500
218       1087        $200,000          $50,000        $0                   $50,000
219       1088          $39,200          $9,800        $0                    $9,800
220       1089        $200,000          $50,000        $0                   $50,000
221       1090        $200,000          $50,000        $0                   $50,000
222       1091        $352,900          $50,000        $0                   $50,000
223       1097        $200,000          $50,000        $0                   $50,000
224       1105        $100,000          $25,000        $0                   $25,000
225       1106          $54,900         $13,725        $0                   $13,725
226       1108        $200,000          $50,000        $0                   $50,000
227       1109        $250,000          $50,000        $0                   $50,000
228       1112        $200,000          $50,000        $0                   $50,000
229       1114        $140,000          $35,000        $0                   $35,000
230       1120          $80,000         $20,000        $0                   $20,000
231       1121       $4,000,000         $50,000        $0                   $50,000
232       1122          $53,000         $13,250        $0                   $13,250
233       1123          $75,000         $18,750        $0                   $18,750
234       1124       $5,000,000         $50,000        $0                   $50,000
235       1125        $200,000          $50,000        $0                   $50,000
236       1126          $50,000         $12,500        $0                   $12,500
237       1127        $200,000          $50,000        $0                   $50,000
238       1130        $163,000          $40,750        $0                   $40,750
239       1131        $263,000          $50,000        $0                   $50,000
240       1134        $200,000          $50,000        $0                   $50,000
      Total                          $1,017,095                         $1,017,095




                                          29
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS


        Business      Stated     Jumpstart grant    Verified loan     Unsupported
       application     loan         amount          disbursement    Jumpstart amount
         number      amount         awarded            amount          awarded
        1135 and 
241       1196        $80,000           $20,000         $0                   $20,000
242       1136       $200,000           $50,000         $0                   $50,000
243       1138       $200,000           $50,000         $0                   $50,000
244       1139       $200,000           $50,000         $0                   $50,000
245       1140       $200,000           $50,000         $0                   $50,000
246       1142       $200,000           $50,000         $0                   $50,000
247       1143       $250,000           $50,000         $0                   $50,000
248       1145       $500,500           $50,000      $500,500                $50,000
249       1147       $200,000           $50,000         $0                   $50,000
250       1149       $200,000           $50,000         $0                   $50,000
251       1150       $250,000           $50,000         $0                   $50,000
252       1151       $100,000           $25,000         $0                   $25,000
253       1152       $205,000           $50,000         $0                   $50,000
254       1154        $50,000           $12,500         $0                   $12,500
255       1155       $250,000           $50,000         $0                   $50,000
256       1157       $260,000           $50,000         $0                   $35,000
257       1158       $200,000           $50,000         $0                   $50,000
258       1159        $50,000           $12,500         $0                   $12,500
259       1160       $200,000           $50,000         $0                   $50,000
260       1161       $200,000           $50,000         $0                   $50,000
261       1163        $91,620           $22,905         $0                   $22,905
262       1164        $90,000           $22,500         $0                   $22,500
263       1166       $200,000           $50,000      $100,000                $25,000
264       1167       $200,000           $50,000         $0                   $50,000
265       1168       $200,000           $50,000         $0                   $50,000
266       1172       $200,000           $50,000         $0                   $50,000
267       1173       $300,000           $50,000         $0                   $50,000
268       1176        $70,000           $17,500         $0                   $17,500
269       1177       $200,000           $50,000         $0                   $50,000
270       1178       $200,000           $50,000         $0                   $50,000
      Total                          $1,282,905                           $1,242,905




                                          30
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS


        Business     Stated loan   Jumpstart grant Verified loan     Unsupported
       application     amount         amount       disbursement    Jumpstart amount
         number                       awarded         amount          awarded
271       1179         $24,054            $6,013        $0                    $6,013
272       1180        $400,000           $50,000        $0                   $50,000
273       1181         $25,000            $6,250        $0                    $6,250
274       1183        $200,000           $50,000        $0                   $50,000
275       1184        $160,000           $40,000        $0                   $40,000
276       1185        $200,000           $50,000        $0                   $50,000
277       1188        $200,000           $50,000        $0                   $50,000
278       1189        $300,000           $50,000        $0                   $50,000
279       1190         $20,000            $5,000        $0                    $5,000
280       1192         $10,000            $2,500        $0                    $2,500
281       1197        $200,000           $50,000        $0                   $50,000
282       1198        $200,000           $50,000        $0                   $50,000
283       1199        $200,000           $50,000        $0                   $50,000
284       1200         $85,000           $21,250        $0                   $21,250
285       1213        $150,000           $37,500        $0                   $37,500
286       1215         $40,000           $10,000        $0                   $10,000
287       1216        $200,000           $50,000        $0                   $50,000
288       1217        $152,670           $38,167        $0                   $38,167
289       1220         $46,510           $11,627        $0                   $11,627
290       1221         $40,000           $10,000        $0                   $10,000
291       1222         $18,000            $4,500        $0                    $4,500
292       1224         $60,000           $15,000        $0                   $15,000
293       1227        $100,000           $25,000        $0                   $25,000
294       1233        $100,000           $25,000        $0                   $25,000
295       1234        $200,000           $50,000        $0                   $50,000
296       1237        $250,000           $50,000        $0                   $50,000
297       1238        $200,000           $50,000        $0                   $50,000
298       1242        $200,000           $50,000        $0                   $50,000
299       1245        $200,000           $50,000        $0                   $50,000
300       1247        $100,000           $25,000        $0                   $25,000
      Total                             $982,807                           $982,807




                                           31
Appendix C

               SCHEDULE OF UNSUPPORTED GRANTS


        Business     Stated loan   Jumpstart grant   Verified loan     Unsupported
       application     amount         amount         disbursement    Jumpstart amount
         number                       awarded           amount          awarded
301       1253        $200,000           $50,000          $0                   $50,000
302       1254        $150,000           $37,500          $0                   $37,500
303       1262        $200,000           $50,000          $0                   $50,000
304       1264        $200,000           $50,000          $0                   $50,000
305       1266        $200,000           $50,000          $0                   $50,000
      Grand total                    $11,060,015                          $10,532,871




                                            32
Appendix D

                                          CRITERIA

Iowa Administrative Code

Paragraphs 78 261-78.4(15) state that an eligible business is one that meets the following
requirements:
   78.4(1) The business has sustained physical damage or economic loss due to the 2008
   natural disasters, and
   78.4(2) The business has executed loan documents for a disaster loan from an eligible
   lender.

Paragraph 78 78.5(1) states that an eligible business may apply for funding for working capital to
ensure the business’s survival. The maximum amount of program funds available for working
capital to ensure the business’s survival is 25 percent of the business’s loan from an eligible
lender up to a maximum of $50,000.

Paragraphs 78 261-78.6(15) state that an administrative entity shall provide financial assistance
from this program to eligible businesses in compliance with the terms and conditions described
in this rule. An administrative entity may award funds in the form of a forgivable loan to
businesses that have received a disaster loan from an eligible lender. A forgivable loan is a loan
that will be forgiven if the business reopens within 12 months of the award date and, if
applicable, upon receipt of documentation that the business has purchased and installed the
energy-efficient equipment.


Robert T. Stafford Disaster Relief and Emergency Assistance Act, Public Law 93-288, as
Amended, 42 U.S.C. (United States Code) 5121-5207

Section 312. Duplication of Benefits (42 U.S.C. 5155) states:

(a) General prohibition - The President, in consultation with the head of each Federal agency
    administering any program providing financial assistance to persons, business concerns, or
    other entities suffering losses as a result of a major disaster or emergency, shall assure that no
    such person, business concern, or other entity will receive such assistance with respect to any
    part of such loss as to which he has received financial assistance under any other program or
    from insurance or any other source.

(c) Recovery of duplicative benefits - A person receiving Federal assistance for a major disaster
    or emergency shall be liable to the United States to the extent that such assistance duplicates
    benefits available to the person for the same purpose.




                                                 33