oversight

The City of Spokane and Lead Hazard Control and Recovery Act Requirements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2013-04-26.

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

OFFICE OF AUDIT
REGION 10
SEATTLE, WA




                  City of Spokane, WA

     Lead-Based Paint Hazard Control Recovery Act
                   Grant Program




2013-SE-1003                               April 26, 2013
                                                                    Issue Date: April 26, 2013

                                                                    Audit Report Number: 2013-SE-1003




TO:            Jon L. Gant, Director, Office of Healthy Homes and Lead Hazard Control, L

               //signed//
FROM:          Ronald J. Hosking, Regional Inspector General for Audit, 0AGA

SUBJECT:       The City of Spokane Did Not Always Appropriately Procure, Match, or Report
               Funds in Accordance With Lead Hazard Control and Recovery Act Requirements


    Attached is the U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General’s (OIG) final results of our review of the City of Spokane’s Lead-based Paint
Hazard Control Recovery Act grant.

    HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.

    The Inspector General Act, Title 5 United States Code, section 8L, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.

   If you have any questions or comments about this report, please do not hesitate to call me at
913-551-5870.




                                                Office of Audit Region 10
                                    909 First Avenue, Suite 126, Seattle, WA 98104
                                      Phone (206) 220-5360, Fax (206) 220-5162
                           Visit the Office of Inspector General Website at www.hudoig.gov
                                          April 26, 2013
                                          The City of Spokane Did Not Always Appropriately
                                          Procure, Match, or Report Funds in Accordance With
                                          Lead Hazard Control and Recovery Act Requirements



Highlights
Audit Report 2013-SE-1003


 What We Audited and Why                        What We Found

We audited the City of Spokane, WA’s           The City failed to ensure cost reasonableness for
Lead-Based Paint Hazard Control program        four Lead Hazard Control contracts. As a result, it
funded by the American Recovery and            had no assurance that it received the best price for
Reinvestment Act to determine whether          its contracted services.
the City complied with procurement,
matching, and reporting requirements when      In addition, the City did not maintain adequate
executing its grant. This audit was part of    records of its matching contributions.
the mandate to monitor grant activities        Consequently, HUD had no assurance that the City
funded by the Recovery Act. We selected        contributed all pledged matching funds.
the City because it received the largest
Lead Hazard Control grant in the U.S.          Finally, the City did not accurately report the final
Department of Housing and Urban                total expenditure amount, the number of jobs
Development’s (HUD) Region 10 (Alaska,         created, and the amount of its vendor payments in
Idaho, Oregon, and Washington) that had        FederalReporting.gov. Therefore, the public did not
not already been audited by our office.        have access to accurate information on the total
                                               funds expended, the number of jobs created, and the
                                               payments to vendors.
 What We Recommend

We recommend that HUD require the City
to (1) conduct cost analyses for the four
contracts totaling more than $1.1 million
and reimburse any unsupported amount,
(2) support $426,130 in eligible matching
funds or return almost $1.4 million in grant
funds, (3) make the necessary changes to
the reported final total expenditure and
final vendor payments figures, and (4)
obtain training on HUD’s procurement and
matching requirements.
                           TABLE OF CONTENTS

Background and Objective                                                       3

Results of Audit
      Finding 1: The City Did Not Always Ensure Cost Reasonableness           4
      Finding 2: The City Did Not Maintain Adequate Records of Its Matching   6
                 Contributions
      Finding 3: The City Did Not Accurately Report Recovery Act Grant        8
                 Information in FederalReporting.gov

Scope and Methodology                                                         10

Internal Controls                                                             11

Appendixes
A.    Schedule of Questioned Costs                                            13
B.    Auditee Comments                                                        14
C.    Example of Vendor Payments: Reported vs. Actual                         16
D.    Criteria                                                                17




                                            2
                      BACKGROUND AND OBJECTIVE

City of Spokane, WA

The City of Spokane, WA, was awarded a $2.85 million American Recovery and Reinvestment
Act Lead Hazard Control grant (grant number WALHB0429-08), which was administered by the
City’s Community Development Department. This grant funded the continuation of the City’s
Lead Safe Spokane program, which allowed it to continue increasing awareness of lead hazards
and expanding lead safe housing choices for low-income home buyers and renters. The City
integrated Lead Safe Spokane with other U.S. Department of Housing and Urban Development
(HUD)-funded rehabilitation programs, all of which were managed under a contract with Kiemle
and Hagood, a local real estate firm.

Recovery Act Lead-Based Paint Program

The Recovery Act included a $100 million appropriation for the Office of Healthy Homes and
Lead Hazard Control. Of the Recovery Act appropriation, $78 million was announced as Lead
Hazard Control awards. The purpose of this program was to assist States, Native American
tribes, cities, counties or parishes, or other units of local government in undertaking
comprehensive programs to identify and control lead-based paint hazards in eligible privately
owned rental or owner-occupied housing.

The Recovery Act Lead Hazard Control grants were first awarded to entities that applied and
were eligible for funding under the 2008 Notice of Funding Availability but did not receive
grants due to funding limitations. The 2008 Notice required Lead Hazard Control grantees to
earmark at least 65 percent of the grant awarded for direct lead hazard control costs and spend no
more than 10 percent of the grant on administrative costs.

Our objective was to determine whether the City complied with procurement, matching, and
reporting requirements when executing its Recovery Act Lead Hazard Control grant.




                                                3
                                RESULTS OF AUDIT


Finding 1: The City Did Not Always Ensure Cost Reasonableness
The City did not ensure cost reasonableness for four Lead Hazard Control contracts. This
condition occurred because the City did not realize that cost analyses were required for sole-
source procurements, nor did it understand what was required when shovel-ready projects were
awarded funding after the initial procurement process had occurred. As a result, the City had no
assurance that it received the best price for more than $1.1 million in contracted services.


 Missing Cost Analyses

              The City entered into a contract with its existing management agent without
              performing an independent cost estimate or a detailed costs analysis. It selected
              Kiemle and Hagood to manage its Lead Hazard Control program using sole-
              source procurement. Kiemle and Hagood had managed the City’s prior Lead
              Hazard Control grant and was already under contract to run its HUD-funded
              rehabilitation programs. However, according to 24 CFR (Code of Federal
              Regulations) 85.36(f)(1), users of sole-source procurement must perform a cost
              analysis, and the City failed to do so.

              In addition, the City did not ensure that its management agent determined cost
              reasonableness for three of its larger, complex projects through either competitive
              procurement or cost analyses. One of the largest projects was complicated by
              additional historical preservation requirements. The other two projects were large
              in scope, and the owners had already secured general rehabilitation contractors
              before their inclusion in the program. Although 24 CFR 85.36 stresses open
              competition and requires a cost or price analysis for every procurement action, the
              grant funds committed for each of these three projects were not supported by
              either competitive procurement or a cost analysis.

 Misunderstood Requirements

              The City did not realize that cost analyses were required for sole-source
              procurements, nor did it understand what was required when shovel-ready
              projects were awarded funding after the initial procurement process had occurred.
              In its 2008 Notice of Funding Availability, HUD encouraged applicants to
              integrate the program with existing rehabilitation efforts. Further, another City
              department stated that a specific brand was required for historically compliant
              windows, and some contractors were already in place. In these cases, the City
              assumed that it was unable to freely choose other vendors and contractors,
              causing it to believe that no cost analyses were required.

                                               4
    Lack of Assurance

                 Without the necessary bids or cost analyses, the City had no assurance that it
                 received the best price for more than $1.1 million in contracted services.

    Recommendations

                 We recommend that the Director of HUD’s Office of Healthy Homes and Lead
                 Hazard Control require the City to

                 1A.      Conduct cost analyses for the four contracts totaling $1,169,405 and
                          reimburse any unsupported amount to the U.S. Treasury from non-Federal
                          funds.

                 1B.      Obtain training on HUD’s procurement requirements.1




1
  The City has arranged to have local HUD staff conduct onsite training that will include Federal procurement
requirements.

                                                         5
Finding 2: The City Did Not Maintain Adequate Records of Its
           Matching Contributions
The City did not maintain adequate records of its matching contributions because it thought that
keeping summary-level data was sufficient. Therefore, HUD had no assurance that the City
contributed all of the pledged matching funds.


 Unverifiable Records

               The City pledged to contribute $757,940 in matching funds. The Residential
               Lead-Based Paint Hazard Reduction Act of 1992 requires that grantees provide
               matching funds of not less than 10 percent of the grant funds received. Grant
               applicants were allowed to pledge additional matching funds to increase their
               application score and help secure funding. Since the City’s pledge of more than
               $757,000 was included in the grant agreement, it superseded the statutory amount
               of $285,000 as the required level of match contributions.

               The City obtained support for only about $332,000 of the required amount.
               Federal Regulations at 24 CFR 85.24(b)(6) instruct grantees to maintain verifiable
               records of their matching contributions, but the City kept summary data instead
               and used the data to prepare its reports. The City reported more than $3 million in
               matching funds contributed, but almost $16,000 of this amount came from
               program income and more than $25,000 from another Federal grant, both
               ineligible sources according to 24 CFR 85.24(b)(1) and 24 CFR 85.24(b)(4).
               Although the City gathered documentation supporting some of the eligible
               matching contributions for salaries, savings from discounted services, sponsored
               training, and contractor donations, it was unable to support about $426,000.

 Incomplete Documentation

               The City thought that keeping summary-level data was sufficient. Instead of
               maintaining the necessary support, the City tracked the matching funds and
               planned to gather the supporting documentation upon request. It was updating its
               policies concerning eligible matching contributions and the associated
               documentation.

 Lack of Assurance

               HUD had no assurance that the City contributed all of the pledged matching
               funds. The grant’s terms and conditions stated that if grantees were not able to
               satisfy the matching requirement, HUD could proportionally reduce the amount
               funded by the grant.


                                                6
    Recommendations

                 We recommend that the Director of HUD’s Office of Healthy Homes and Lead
                 Hazard Control require the City to

                 2A.      Support $426,130 in eligible matching funds or return up to $1,399,5542
                          of the grant funds spent for which matching funds remain unsupported.3

                 2B.      Obtain training on HUD’s matching requirements.




2
  This figure represents the proportion of grant funds equal to the proportion of unsupported match. The City was
unable to support $426,130 of the required $757,940, or 56.22 percent, and 56.22 percent of the $2.49 million grant
funds spent equals $1,399,554.
3
  The repayment amount from either recommendation 1A or 2A can be applied to the amount owed for the other
recommendation. Therefore, after repayment amounts are determined for recommendations 1A and 2A, the total
repayment amount should be limited to the larger of the two.

                                                         7
Finding 3: The City Did Not Accurately Report Recovery Act Grant
           Information in FederalReporting.gov
The City did not accurately report the final total expenditure amount, the number of jobs created,
and the amount of its vendor payments in FederalReporting.gov. These figures were inaccurate
because the City misunderstood reporting and time-keeping requirements and lacked review
procedures. Therefore, the public did not have access to accurate information on the total funds
expended, the number of jobs created, and the payments to vendors.


 Inaccurate Reporting

               The City overstated the final total expenditure amount in its final Recovery Act
               report by almost $19,000. It reported the final amount drawn but did not consider
               the amount it did not spend and returned to HUD.

               The City did not correctly calculate the number of jobs created. According to
               HUD’s Updated Guidance to Grantees, grantees must report job estimate totals by
               dividing the hours worked in the reporting quarter by the hours in a full-time
               schedule in that quarter. For projects combining Lead Hazard Control with
               general rehabilitation, the City did not accurately allocate the proportional labor
               hours to the lead program. The labor hours worked on some projects were not
               included in the calculations, while others were counted twice. Further, 2 CFR
               225, appendix B, section 8(h), states that salary distributions across multiple
               activities must be supported by personnel activity reports that reflect an after-the-
               fact distribution of the actual activity of each employee. However, the City used
               estimated time instead of actual labor hours to account for the administrative staff
               time of City and management agent employees.

               The City did not report the aggregate amount paid to its vendors. Instead, it
               inaccurately and inconsistently reported the sum of individual payments made to
               vendors each quarter and failed to provide sufficient detail regarding each
               significant transaction. HUD’s Updated Guidance to Grantees states that vendor
               payments should be reported as a running total throughout the grant, not
               summarized per quarter. An example of these aggregate vendor payment
               reporting errors can be found in appendix C. In addition, OMB’s Recovery Act
               Reporting Guidance states that grantees must report additional data elements,
               including the amount of the payment and a description of what was obtained for
               it, for each payment over $25,000.

 Misunderstood Requirements

               The City did not understand that it needed to revise its reported expenditure
               amount for funds returned to HUD. When preparing its quarterly Recovery Act
               reports, the City calculated total expenditures as the total of all of its draws from

                                                 8
           HUD to date. However, the City returned almost $19,000 after the final reporting
           period and did not adjust the total expenditures down by this amount.

           In addition, the City did not understand that it was required to record actual staff
           hours worked on its various programs. Intending to reduce the workload of its
           staff, the City estimated in advance the percentage of time each staff member
           would work on each program and charged salaries and benefits accordingly. The
           number of jobs created by the grant award cannot be accurately estimated without
           a mechanism to track actual staff hours worked on the program. This issue was
           also identified by the Washington State Auditor’s Office during its 2011 single
           audit of the City, and in response, the City had begun implementing a time-
           keeping system that allows employees to record and track their hours by activity.

           The City also did not understand that vendor payments were to be reported in
           aggregate over the term of the grant.

Nonexistent Review Procedures

           The City did not have review procedures for reporting jobs data. The same
           employee compiled the data, estimated the number of jobs created, and submitted
           the data to FederalReporting.gov. Nobody else reviewed these figures or their
           underlying support before their submission. Having another employee review the
           figures would have reduced the risk of inaccurate calculations being reported.

Lack of Transparency

           The public did not have access to accurate information on the total funds
           expended, the number of jobs created, and the payments to vendors.

Recommendation

           We recommend that the Director of HUD’s Office of Healthy Homes and Lead
           Hazard Control require the City to

           3A.    Make the necessary changes to the final total expenditure and final vendor
                  payment figures in FederalReporting.gov. Note that the reporting system
                  only allows the final totals to be changed; the quarterly jobs figures cannot
                  be adjusted.




                                            9
                        SCOPE AND METHODOLOGY

Our scope was the period between April 2009 and March 2012. We performed our onsite audit
work between October and December 2012 at the City’s office located at 808 West Spokane
Falls Boulevard, Spokane, WA.

To accomplish our objective, we reviewed applicable applications, agreements, and HUD
requirements; interviewed HUD and City staff; reviewed the City’s policies and procedures; read
the City’s single audit reports; reviewed the City’s project files; analyzed the City’s
disbursements; reviewed contractor payrolls; and read the City’s Recovery Act reports.

Sample Selection

From a total of 367 transactions, we sampled and reviewed 10 of the largest transactions from
the City’s 11 cost categories to determine cost eligibility and proper classification. These
included the largest salary amount for a single pay period, the two largest travel charges, the
largest supply charge, the two largest management fees charged, the largest risk assessment
charge, the largest blood testing charge, the largest closing cost charged to “Contractor Lead
Hazard Control” that was not a journal entry, and the transaction with the largest training and
outreach amounts. Some of the charges spanned multiple cost categories. For project eligibility
and procurement, using computer software, we randomly selected seven project files from four
subsets defined as either single-family or multifamily that were either desk reviewed or not
reviewed by the City. We also included 2 each of the largest projects and professional services
contracts in our procurement review from a total of 62 projects and 4 service contracts.

We did not use computer-generated data to support our audit conclusions. We compared the
source documentation maintained by the City to data reported in HUD’s Line of Credit Control
System and retrieved from Recovery.gov. All conclusions were based on source documentation
reviewed during the audit.

We conducted the audit 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.




                                              10
                              INTERNAL CONTROLS

Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

      Effectiveness and efficiency of operations,
      Reliability of financial reporting, and
      Compliance with applicable laws and regulations.

Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls 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 Recovery Act Lead Hazard Control grant funds were
                      used in compliance with the Recovery Act and HUD requirements.
                     Controls to ensure that activities funded by the Recovery Act Lead Hazard
                      Control grant were reported in compliance with the Recovery Act.

               We assessed the relevant controls identified above.

               A deficiency in internal control exists when the design or operation of a control does
               not allow management or employees, in the normal course of performing their
               assigned functions, the reasonable opportunity to prevent, detect, or correct (1)
               impairments to effectiveness or efficiency of operations, (2) misstatements in
               financial or performance information, or (3) violations of laws and regulations on a
               timely basis.

 Significant Deficiencies

               Based on our review, we believe that the following items are significant deficiencies:

                     The City did not have adequate controls in place to ensure that all contracts
                      were properly procured (finding 1).
                     The City did not have controls in place to ensure that all matching
                      contributions were adequately documented (finding 2).


                                                 11
   The City did not have adequate controls in place to ensure accurate Recovery
    Act reporting (finding 3).




                             12
                                   APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS

                             Recommendation       Unsupported
                                 number               1/
                                   1A               $1,169,405
                                   2A               $1,399,554


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

             March 28, 2013 
              
             Ronald Hosking 
             Regional Inspector General for Audit 
             Region 10 Office of Audit 
             Via Email 
              
                RE:      Comments to OIG Draft Audit Report 
                         City of Spokane ARRA Lead‐Based Paint Grant 
              
             Dear Mr. Hosking:  
              
             Please accept our thanks to HUD Office of Inspector General staff for their efforts reviewing the City of 
Comment 1    Spokane’s lead hazard control grant program.  Your staff’s review has resulted in substantial program 
             improvements to the benefit of Spokane low‐ and moderate‐income families.  We respectfully offer 
             these comments for your consideration.   
              
             Finding 1: The City did not always ensure cost reasonableness 
             A majority of our grant projects were single‐family or small multifamily housing which met federal price 
             estimating and cost analysis requirements.  We agree that program staff misunderstood procurement 
             requirements for certain large and complex projects as identified by OIG staff.  Since your audit, 
             program staff received procurement training from HUD.  Program staff also completed a new Cost and 
             Price Analysis policy and checklist to be applied to four questioned contracts and as an internal control 
             for forthcoming projects.   
              
             Finding 2: The City did not maintain adequate records of its matching contributions 
             Changes to accounting staff, time tracking, and post‐grant‐closeout audit frustrated our assembly of 
             backup documentation upon OIG request.  Program staff continues to gather match documentation to 
             assure HUD that the City contributed sufficient grant matching funds.  Program staff has updated the 
             matching funds schedule and implemented supervisor review to improve internal controls.  Program 
             staff will also receive grant match training from HUD this April.  
              
             Finding 3: The City did not accurately report Recovery Act grant information in FederalReporting.gov 
             Our efforts to provide accurate FederalReporting.gov reports were frustrated by multiple report 
             guideline changes and the ARRA 10‐day deadline to submit reports.  Also, certain program cost savings 
             could not be returned to HUD prior to the final FederalReporting.gov report deadline and staff was not 
             aware that this final report could be modified later.  Program staff will work with HUD to correct final 
             report of total expenditure and vendor payments in FederalReporting.gov.  We have also initiated new 
             internal controls of supervisor’s review of reports and tracking staff hours worked by activity to address 
             the Washington State Auditor issue.   
              
             Sincerely, 
                /S/ 
             Jerrie Allard, Director 
             Community, Housing and Human Services Department




                                                       14
                         OIG Evaluation of Auditee Comments

Comment 1   The City agreed with the findings in this report and is in the process of making
            corrections.




                                            15
Appendix C

                  EXAMPLE OF VENDOR PAYMENTS:
                      REPORTED VS. ACTUAL
               Vendor
                                      Reported by the City                 Actual
                        Payment
    Date
                        Amount
                                  A       B        C     D      A     B      C        D
   6/15/2009 1         $ 5,342
   6/26/2009 2            $225
   7/20/2009 1         $ 8,827
     8/3/2009 3           $628
     8/4/2009 4            $55
   8/24/2009 1         $ 1,985
     9/3/2009 1        $ 6,092
     9/3/2009 1        $ 4,294
  July-Sept. 2009 $ 27,447 2 $ 26,540 2 $ 26,540 0                    $0     8      $27,447
   9/18/2009 1         $ 3,750
   9/18/2009 1         $ 4,632
   9/25/2009 5             $81
   9/25/2009 1         $ 8,926
   9/25/2009 1         $ 2,485
   10/5/2009 1         $ 4,500
  10/12/2009 1         $ 1,501
  10/15/2009 1         $ 4,701
  10/27/2009 1         $ 5,000
   11/3/2009 1         $ 6,898
   11/3/2009 1  $ 13,693
   11/9/2009 1         $ 5,359
  11/17/2009 1           $ 556
  11/17/2009 1           $ 810
  11/24/2009 1         $ 1,037
  11/24/2009 1         $ 7,702
  11/24/2009 1         $ 3,466
  12/10/2009 1         $ 8,614
  12/15/2009 1         $ 4,457
  Oct.-Dec. 2009     $ 88,168 2 $ 26,540 16 $ 88,087 0                $0     27 $115,615
  A - Number of payments to vendors greater than $25,000
  B - Total amount of payments to vendors greater than $25,000 per award
  C - Number of payments to vendors less than $25,000 per award
  D - Total amount of payments to vendors less than $25,000 per award


                                              16
Appendix D

                                        CRITERIA

2 CFR 225, appendix B, section 8(h) – Support of salaries and wages.
   (4) Where employees work on multiple activities or cost objectives, a distribution of their
       salaries or wages will be supported by personnel activity reports or equivalent
       documentation which meets the standards in subsection (5) unless a statistical sampling
       system (see subsection (6)) or other substitute system has been approved by the cognizant
       Federal agency. Such documentary support will be required where employees work on:
          (a) More than one Federal award,
          (b) A Federal award and a non-Federal award,
          (c) An indirect cost activity and a direct cost activity,
          (d) Two or more indirect activities which are allocated using different allocation
              bases, or
          (e) An unallowable activity and a direct or indirect cost activity.
   (5) Personnel activity reports or equivalent documentation must meet the following
       standards:
          (a) They must reflect an after-the-fact distribution of the actual activity of each
              employee,
          (b) They must account for the total activity for which each employee is compensated,
          (c) They must be prepared at least monthly and must coincide with one or more pay
              periods, and
          (d) They must be signed by the employee.
          (e) Budget estimates or other distribution percentages determined before the services
              are performed do not qualify as support for charges to Federal awards but may be
              used for interim accounting purposes.

24 CFR 85.24(b) – Qualifications and Exceptions
   (1) Costs borne by other Federal grant agreements. Except as provided by Federal statute,
       a cost sharing or matching requirement may not be met by costs borne by another Federal
       grant.
   (4) Costs financed by program income. Costs financed by program income, as defined in
       §85.25, shall not count towards satisfying a cost sharing or matching requirement unless
       they are expressly permitted in the terms of the assistance agreement.
   (6) Records. Costs and third party in-kind contributions counting towards satisfying a cost
       sharing or matching requirement must be verifiable from the records of grantees and
       subgrantee or cost-type contractors. These records must show how the value placed on
       third party in-kind contributions was derived. To the extent feasible, volunteer services
       will be supported by the same methods that the organization uses to support the
       allocability of regular personnel costs.


                                               17
24 CFR 85.36 – Procurement
(c) – Competition
   (1) All procurement transactions will be conducted in a manner providing full and open
       competition consistent with the standards of §85.36.
(f) – Contract cost and price
   (1) Grantees and subgrantees must perform a cost or price analysis in connection with every
       procurement action including contract modifications. The method and degree of analysis
       is dependent on the facts surrounding the particular procurement situation, but as a
       starting point, grantees must make independent estimates before receiving bids or
       proposals. A cost analysis must be performed when the offeror is required to submit the
       elements of his estimated cost, e.g., under professional, consulting, and architectural
       engineering services contracts. A cost analysis will be necessary when adequate price
       competition is lacking, and for sole source procurements, including contract
       modifications or change orders, unless price reasonableness can be established on the
       basis of a catalog or market price of a commercial product sold in substantial quantities to
       the general public or based on prices set by law or regulation. A price analysis will be
       used in all other instances to determine the reasonableness of the proposed contract price.

2008 Notice of Funding Availability [FR-5200-N-06] (III)(B)(2)(c)(2) – Housing
Rehabilitation in Conjunction with Lead Hazard Control.

       HUD strongly encourages integration of our grant programs with housing rehabilitation.
       Applicants may include housing rehabilitation expenditures as leveraged resources for
       housing rehabilitation activities conducted in conjunction with the housing units or
       common areas being made lead-safe.

HUD’s Updated Guidance to Grantees – March 26, 2010
   Job Counting Guidance (M-10-08 December 18, 2009)
       OMB Memoranda M-10-08 updated and changed the job estimate calculation so that a
       grantee recipient now report job estimate totals by dividing the hours worked in the
       reporting quarter (i.e., the most recent quarter) by the hours in a full-time schedule in that
       quarter.
   *** Important Note***
       The ONLY data field reporting quarterly data is the “Number of Jobs”
       “Other fields, i.e. the loan and grant template, “Total amount of payments to Vendors
       less than $25,000/award*” and “Total amount of Sub Awards less than $25,000/award*”
       have a quarterly threshold (below $25,000) for inclusion in the data element, but the
       amount reported is cumulative for the award.”




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Implementing Guidance for the Reports on Use of Funds Pursuant to the American
Recovery and Reinvestment Act of 2009 [OMB’s Recovery Act Reporting Guidance],
section 2 – Basic Principles and Requirements of Recovery Act Recipient Reporting
 (2.3) In addition, the prime recipient must report three additional data elements associated with
       any vendors receiving funds from the prime recipient for any payments greater than
       $25,000. Specifically, the prime recipient must report the identity of the vendor by
       reporting the D-U-N-S number, the amount of the payment, and a description of what
       was obtained in exchange for the payment. If the vendor does not have a D-U-N-S
       number, then the name and zip code of the vendor’s headquarters will be used for
       identification. Vendors, as defined in this guidance, are not required to obtain a D-U-N-S
       number.

Residential Lead-Based Paint Hazard Reduction Act of 1992, section 1011(h) – Matching
Requirement
      Each recipient of a grant under this section shall make contributions toward the cost of
      activities that receive assistance under this section in an amount not less than 10 percent
      of the total grant amount under this section.

Terms and Conditions – Amount of Cost Share (Estimated Cost and Payment – Matching)
      The Grantee must satisfy all statutory matching requirements in the NOFA. If the
      Grantee’s actual matching contribution is less than "Recipient Amount" under Block 14
      of the HUD 1044, the Government reserves the right to negotiate new line items and/or
      amounts to satisfy the Grantee’s match, or to reduce the Government’s share
      proportionally. HUD may withhold an amount equal to the statutory required matching
      amount pending receipt and utilization of the match amount. The Grantee shall notify the
      Government at any time it believes it will not meet its match by the completion of the
      grant. If the Grantee exceeds the match, there will be no impact on the Federal share.




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