CDBG_Subrecipient_Manual_highlighted__2023.pdf

CDBG

Sub-Recipient Manual

Office of Housing and Community Services 2008 Classique Lane, P.O. Box 7800

Tavares, FL 32778-7800 352-742-6540

Fall 202

Dear CDBG Sub-Recipient, Congratulations to your organization on receiving a grant through Lake County's Community Development Block Grant (CDBG) program. The Office of Housing and Community Services welcomes your partnership in

This competitive program aims to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons.

As a sub-recipient, there is a series of responsibilities of which your organization must be mindful. Throughout the year, there are reporting requirements which must be carried out in order to maintain compliance with the U.S. Department of Housing and Urban Development, the funding agency of CDBG, and with Lake County, which administers the grant. This manual is intended to be a resource to equip you to be successful and in carrying out your CDBG-funded projects.

Housing and Community Services team members are available to support you throughout the grant cycle. We also welcome stories, photos, and anecdotes that exhibit how your organization has used CDBG to enhance equity, achieve your goals, and support members of our community. Thank you for your contributions to Lake County!

Sincerely, Lake County Housing and Community Services

TableofContents

Letter toCDBGSub-recipients

Part 1: Introduction Purpose of thisManual

AboutCDBG About CDBG inLake County How Funding Determinations aremade in Lake County

Contact Information KeyTerminology andCommonAcronyms Low-to Moderate-Income Limits & Census Blocks for 2021-2022

Low-to Moderate-Income Clientele Income Form

Low-toModerate-IncomeArea Annual Grant Cycle & Key Dates Other Important Links

Part 2: Administrative & Financial Systems Sub-RecipientAgreement

InternalControls

RecordkeepingRequirements Finance&Accounting Procedures

Reimbursement Requests

Procurement Construction

SingleAudit Reporting

Monitoring Environmental Reviews

Part I Introduction

Purpose of Manual

The primary purpose of this manual is to serve as the Lake County Office of Housing and Community Services' policies and procedures manual for its Community Development Block Grant (CDBG) program sub-recipients. It serves as a source of information and guidance when conducting CDBG activities, and is a supplement, not a substitute, to CDBG regulations. The CDBG program is funded by the U.S. Department of Housing and Urban Development (HUD) and is administered to local sub-recipients by Lake County Housing and Community Services. Lake County Housing and Community Services reserves the right to add, remove or change policies, procedures, or forms in this manual.

If a sub-recipient is unsure how to proceed after reading the manual, they are encouraged to call Lake County Housing and Community Services at (352) 742-6540 for assistance. There are also several online resources available on HUD websites.

About CDBG

Authorized by Title I of the Housing and Community Development Act of 1974 (HCD Act) as amended, the Community Development Block Grant program provides annual grants on a formula basis to entitled cities and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low and moderate-income persons. Grants are awarded to entitlement communities to carry out a wide range of community development activities directed toward neighborhood revitalization, economic development, and the provision of improved community facilities and services. Applicants for funding must be able to explain the way in which the proposed activity aligns with one of ow to moderate income persons; 2) Prevent slum or blight; or 3) Address urgent community needs. Each year, Congress votes to determine the overall program funding for the year.

About CDBG in Lake County

Lake County has received CDBG grants municipalities apply for a portion of the annual grant for projects. Those who receive funding set goals for the number of individuals they plan to serve, housing units they aim to preserve, jobs they seek to retain or create, or another metric, which the Office of Housing and Community Services uses to measure progress. In recent years, Lake County has received grants of about $1 million annually. Over the past 22 years, Lake County has received over $26 million from HUD and leveraged millions more through sub-recipients, from other public and private sources.

How CDBG funding determinations are made in Lake County

Each spring, the Office of Housing and Community Services issues a notice inviting applications for CDBG-eligible projects. Applications are reviewed by Housing and Community Services staff and Lake County's CDBG Consultant. Once applications are evaluated, a funding recommendation is presented to the Board of County Commissioners for approval. The Office of Housing and Community Services issues a Citizens Participation Plan to provide for and encourage residents to participate in the development of the Office of Housing and Community Services Consolidated Plan, Annual Action Plan, any substantial changes to the Consolidated Plan or Annual Action Plan, and the Consolidated Annual Performance and Evaluation Reports (CAPER). These recommendations are formed into an Annual Action Plan, which is reviewed and ultimately approved by HUD prior to the distribution of funds to sub-recipients.

Contact Information

Amy Elliott Maria AbdoulKarim CDBG Administrator Director, Housing and Community Services

Email: amy.elliott@lakecountyfl.gov maria.abdoulkarim@lakecountyfl.gov

Phone: 352-742-6540

Address: Lake County Office of Housing and Community Services 2008 Classique Lane P.O. Box 7800 Tavares, FL 32778

KeyTerminology andCommonAcronyms

Annual Action Plan: TheConsolidated Plan is carried out throughAnnual Action Plans, which provide a concise summary of the actions, activities, and the federal and non-federal resources thatwill be used each year to address the priority needs and goals by the Consolidated Plan. The current plan is hosted on the Office of Housing and Community Services website.

CAPER: ConsolidatedAnnual Performance andEvaluation Report. Grantees report on accomplishments and progress toward Consolidated Plan goals in the CAPER.

CDBG: Community Development Block Grant Program, a federally funded, competitive grant programdesigned tohelp small cities and townsmeet abroad rangeof community development needs.

CFR: Codeof FederalRegulations, is the of thegeneral andpermanent regulations published in the Federal Register by the executive departments and agencies of the federal government of the United States. The CFR is divided into 50 titles that represent broad areas subject to federal regulation.

Consolidated Plan: TheConsolidatedPlan is designed to help states and local jurisdictions to assess their affordable housing and community development needs and market conditions, and to make data-driven, place-based investmentdecisions.Theconsolidatedplanningprocess serves as the framework for a community-wide dialogue to identify housing and community development priorities that align and focus funding from the CPD formula block grant programs. A copy of the current plan can be requested by contacting The Office of Housing and Community Services.

Grantee:Thepass-throughentity that receives aCDBGgrant andadministersCDBGfunding (Lake County is thegrantee).

HUD:TheUnitedStatesDepartmentofHousingandUrbanDevelopment.

LMI: Low- andmoderate-income.A low- andmoderate- (L/M) incomeperson is as a member of a family having an income equal to or less than the Section 8 Housing Assistance Payments Program low-income limits established by HUD applicable to the size of the A family is as all persons living in the same householdwho are related by blood, marriage, or adoption. An individual living in a housing unit that contains no other person(s) related to him/her is considered to be a one-person family for this purpose. Adult children who continue to live at home with their parent(s) are considered to be part of the family for this purpose and their incomemust be counted in determining the total family income. A dependent child who is living outside of the home (e.g., students living in a dormitory or other student housing) is considered for thesepurposes to bepart of the family uponwhichhe/she is dependent, even though he/she is living in another housing unit.

MBE:Minority-ownedBusinessEnterprise.

Microenterprise: a business having five or fewer employees, one or more of whom owns the business.

Presumedeligible:Exclusively a clientelewhoaregenerallypresumedbyHUDtobe principally L/M income persons. The following groups are currently presumed byHUD to bemade up principally of L/Mincomepersons:wabused children,welderly persons, wbattered spouses,w homeless persons, w adultsmeetingBureau of of severely disabled persons, illiterate adults, persons living with AIDS, and migrant farm workers.

QuarterlyReport:Required documentation submitted by sub-recipients four times each program year, to detail the progress toward accomplishments as described in theSubrecipientAgreement.

RFP: Request for Proposal.

Sub-Recipient: A public or private non-profit agency, authority, or organization, or a for-profit entity authorized under §570.201(o) to provide microenterprise assistance, receiving CDBG funds from the grantee to undertake activities eligible under the CDBG program.

Sub-recipient Agreement: The sub-recipient agreement is a contract between the sub-recipient and Lake County, which outlines the grant award, project, and terms of the grant.

USC: United States Code is the by subject matter of the general and permanent laws of the United States.

WBE:Women-owned Business Enterprise

Low-to Moderate Income Limits & Census Blocks for 2021-2022

Low-toModerate-IncomeClientele

For activitiesmeeting theLow-toModerate-Income (LMI)Clientele national objective, at least 70%of spendingmust low tomoderate-income persons. In addition tomeeting the 70-percent test, applicants must ensure that the activities proposed, when taken as a whole, will not moderate-incomepersons to the exclusion of low-income persons. This does notmean that each activity has to include both low- and moderate-income but it further ensures that the CDBG programwill primarily low-income persons.

The following table outlines the income limits by household size for the current program year. Income Limits can

Select Florida then Lake County to view current income limits.

Presumed Eligible Groups

Please note that there are several groupswhichHUD as eligible These groups include:

abused children elderly persons battered spouses homeless persons severelydisabledadults illiterate adults persons livingwithAIDS migrant farmworkers

Low-toModerate-IncomeArea

Activities qualifying for fundingbasedon their locationmust be in aLow- toModerate-IncomeArea (LMA). An area is considered tomeet the test of being LMA if there is a large percentage (51 percent) of LMI persons residing in the service area as determined by the most recently available decennial Census/American Community Survey (ACS) information, together with the Section 8 income limits that would have applied at the time the income information was collected by the Census Bureau. Further information regarding LMA and LMA Areas for Lake County can be viewed at FY 2022 ACS 5-Year 2011-2015 Low- and Moderate-Income Summary Data - HUD Exchange (https://www.hudexchange.info/programs/acs-low-mod-summary-data/).

CDBGAnnualGrantCycle &KeyDates

October ProgramYear begins Sub-recipients sign sub-recipient agreements; sub-recipientsmaybegin activities and requesting reimbursements once the agreement is fully executed.

Quarter 4 report (of previous year) due October 10th (does not apply to first-time recipients)

December Quarter 1 endsDecember 31st

January Quarter 1 report due January 10th SubmitQuarter 1 expenses for reimbursement

March Quarter 2 endsMarch 31st

April Quarter 2 report dueApril 10th SubmitQuarter 2 expenses for reimbursement Mid-Year monitoring takes place

May Application for future programyear released Information session for future programyear applications

June Quarter 3 ends June 30th SubmitQuarter 3 expenses for reimbursement Applications for future programyear due

July Quarter 3 report due July 10th Submit remaining invoices by July 30th (if you anticipate not being able to meet this deadline, please contact the CDBG Administrator as soon as possible)

September EndofQuarter4 andprogramyear

Part 2 Administrative and Financial Systems

CDBG sub-recipients must maintain administrative and nancial records in compliance with CDBG and HUDRequirements. Sub-recipients should have scal management systems in place that enable them to make sound nancial decisions that abide by federal regulation. Recipients must maintain an accounting or nancial management system that demonstrates compliance with all applicable federal, state and local laws, rules, regulations, and requirements. If youare concerned about your adherence to or management of administrative and nancial systems, please contact the CDBG Administrator, who may provide technical assistance.

Sub-Recipient Agreement

The contract or -recipient serves three key purposes:

a legal requirement by presenting a concise statement of the rules of the CDBG program and the conditions under which funds are provided;

Outlines the sub- project and serves as ayardstick for monitoring sub-recipient performance; and Provides an essential vehicle for training the subrecipient staff onhow to operate the CDBG program.

Lake County is the recipient of federal CDBG funding. As an agency awarded funding under this program, your agencymust enter a contractual relationship with Lake County. The Sub-Recipient Agreement is not a legally executed contract until it is properly signed by each of the signatories for both Lake County and your agency. It is required that your agency sign the once that is doneLake County will then sign it.

Only an authorized signatory for your agency can sign this agreement. This process usually takes 90-120 days. The Sub-Recipient Agreement and the program year to which it is associated follow the scal year (October 1 September 30).

Internal Controls

The subrecipient is responsible for establishing and maintaining a system of internal controls to protect the integrity of grant funds. To the greatest extent possible, the system should provide for adequate separation of duties so that no one individual has authority over all scal functions. Where separation of duties is not possible due to staff limitations,management should assume an oversight role for the overall functions tobe performed.

At aminimum, sub-recipients should use the following as a guide regarding segregation of duties:

No individual shall have complete control over all phases of any transaction. In other words, the same person cannot authorize payment, record transactions, and sign checks.

CDBGBudget andmust be allowable under 2CFR200 Subpart E. Please keep the following in mind:

ReimbursementRequests shouldbe submittedonaquarterlybasis, at aminimum, however, monthly requests are welcomed. (Some exceptionsmay apply, such as seasonal programming and construction,which should be discussed with the CDBG Administrator).

All requestsmust include acover letter, invoices, receipts, canceled checks, and anyother documentation justifying the claimed reimbursement costs.

Only expenses described and approved in the sub- application and sub-recipient agreementwill be reimbursed. Lake County reserves the right to deny a request or request additional documentation to verify the eligibility of an expense.

If no funds are spent within 6 months of the Sub-recipient Agreement execution date, the CDBG Administrator will request a meeting to devise a plan to ensure timely expenditure.

All nancial transactions with CDBGmonies are subject to afederal audit. Sub-recipients must be prepared to explain the purpose of transactions and how they were made.

The nal reimbursement request shouldbemadeno later than July 30th.

Expenses that are generally ineligible include: Buildings for the general conduct of government;

General government expenses except to carry out the CDBG program; Political or religious activities; Construction equipment; Fire protection equipment unless part of a public facility;

Personal furnishing or property; Food not related to direct service delivery to clients; Furnishings that are not integral structural xtures; New housing construction except for land acquisition and other circumstances; Income payments and other subsistence payments made to individuals or a family.

Please note that reimbursementsmay takeup to30 days to process.

All Reimbursement Requests have three parts:

1. A cover letter

Addressed to Lake County Housing and Community Services Lists the total amount of the request Provides explanation as needed to show how line items conform to the scope of services in your sub-recipient agreement. Requests should not be considered self-explanatory; while Lake County staff is familiar with your project, it should also be evident to a federal auditor unfamiliar with the project how the request aligns with your goals (as stated in your application).

2. An invoice that includes:

An invoice number A date Addressed to Lake County Housing and Community Services Itemized Requests

3. Backup documentation Receipts or other proof of payment

Lake County recommends use of the following invoice template (included in the executed Sub-Recipient Agreement) for requests for sub-recipients that do not have a standard invoice template. Please note that an emailmessage is not considered an invoice.

except when they elect to have a program- audit conducted. A program audit is an audit of one federal program (such as CDBG). A program- audit is allowed when the grantee or sub-recipient expends federal awards under only one federal program. A single audit is an audit that includes both an entity's nancial statements and its federal awards (fromall applicable federal programs). If agranteeor sub-recipient expends less than$750,000 a year in federal awards, it is exempt from the audit requirements for that year; however, records must be available for review or audit by appropriate of the federal agency, pass-through entity, Your agency's oversight should be in the form of monitoring to ensure compliance with CDBG regulations, and any requirements imposed by your agency. Advise sub-recipients of requirements imposed on themby federal laws, regulations, and the provisionsof contracts or grant agreements as well as any supplemental requirements imposed by the grantee. Monitor the activities of sub-recipients as necessary to ensure that CDBG funds are used for authorized purposes in compliance with laws, regulations, and the provisions of the sub-recipient agreement and those performance goals are achieved. Ensure that a sub-recipient or non-federal agency expending $750,000 or more in federal awards during their scal year has met the audit requirements of 2 CFR 200 for that scal year in accordance with the provisions of Subpart F Audit Requirements.

Reporting

On a quarterly basis, all sub-recipients with public service and economic development activities are required to submit a report of their accomplishments for the quarter. Sub-recipients conducting construction or capital improvements projects are required to submit accomplishment reporting at the conclusion of the project (for example, once a buildinghas been completed) or on an annual basis (if the project spans more than one program year).

Whensubmitting reports, pleasebe awareof the following items:

1. Do not duplicate numbers for each program, i.e. if a student participates in your program in Q1 and Q2, count them as one person, not two.

2. It is helpful to count out your accomplishments quarterly and then cumulatively.

Quarterly Reporting Periods:

Quarter 1: October 1 December 31 (report due January 10)

Quarter 2: January 1 March 31 (report due April 10) Quarter 3: April 1- June 30 (report due July 10) Quarter 4: July 1- September 30 (report due October 10)

Reporting Housing Capital Improvement Activities

In addition to the information above, the following information must be submitted for each address:

Number of units proposed and completed.

Number of units in eachmulti-unit structure initially occupied by low- and moderate-income households and following capital improvements.

Formulti-unit properties, the amount proposed and expended fromCDBG, other public, and private sources.

Monitoring

HUD requires Grantees to conduct ongoingmonitoring of sub-recipient performance as necessary to ensure that the grant award is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals areachieved. Thegoal of monitoring is to support sub-recipients inmaintaining compliance withHUDand the requirements of

CDBG.

Monitoring of the sub-recipient will include:

Reviewing nancial andprogrammatic reports requiredbyLake County.

Meetingwith sub-recipient representatives to determine appropriate action.

Following up and ensuring that the sub-recipient takes timely and appropriate action on all pertaining to theFederal awardprovided to the sub-recipient from the passthrough entity detected through audits, on-site reviews, and other means.

Issuingamanagement decision for audit ndings pertaining to theFederal awardprovided to the sub-recipient from the pass-through entity as required by §200.521 Management decision.

Depending upon the County assessment of the risk posed by the subrecipient, the following monitoring toolsmay be used byLake County to ensure proper accountability and compliancewith program requirements and achievement of performance goals:

Providing sub-recipientswith training and technical assistance onprogram-relatedmatters.

Performingon-site reviewsof the sub- programoperations.

Please note that all new sub-recipients, sub-recipients with new projects, and sub-recipients with newkey leadership positions lled will automatically undergo a formalmonitoring session at the mid-year point.

Ample notice will be provided to all sub-recipients being monitored.

Environmental Reviews

CommunityDevelopmentBlockGrant (CDBG) regulations require thepreparation of a project Environmental ReviewRecord (ERR) and environmental clearance before the project commences and federal funds are expended, or costs incurred. The ERR contains all the environmental review documents, public notices and written determinations or environment ndings required by 24 CFRPart 58.

The environmental reviewprocess covers all phases of a project, whether the project is funded inwhole or in part withCDBG funds.

Federal regulations require that theLake County Office of Housing and Community Services determine if project activities will cause adverse impacts to the human environment. The Office of Housing and Community Services must also determine whether the project meets other applicable statutory and regulatory requirements.

Most activities will be categorically excluded or exempt, however the ERRmust be completed before the activity begins. For construction and rehabilitation projects, it is likely that a more in-depth environmental assessment will need to take place. Please note that any funds expended prior to environmental review are not eligible for reimbursement. Noproject or activitywill be initiated until Lake County Office of Housing and Community Services completes an environmental review and all necessary approvals have been secured.