Report 2009-119.2 All Recommendation Responses

Report 2009-119.2: Department of Community Services and Development: Delays by Federal and State Agencies Have Stalled the Weatherization Program and Improvements Are Needed to Properly Administer Recovery Act Funds (Release Date: February 2010)

Recommendation #1 To: Community Services and Development, Department of

Once Community Services has received plans from local service providers, it should make any necessary adjustments in its state plan to accurately reflect average costs per home for weatherization assistance and the estimated number of homes to be weatherized under the program.

Annual Follow-Up Agency Response From September 2012

In November 2011, the Department of Community Services and Development (CSD) conducted an evaluation of sub-grantee performance, resulting in the identification of Department of Energy (DOE) American Recovery and Reinvestment Act (ARRA) contract funds at-risk of not being spent. To ensure against these funds going unexpended and reverting to DOE, CSD completed a number of reallocation efforts – i.e., where at-risk funds are transferred to stronger performing agencies with the capacity to take on additional funds. CSD finalized the allocation plan and on February 10, 2012, held a public hearing amending the DOE ARRA State Plan to reflect the reallocation of DOE ARRA funds. On March 26, 2012, DOE approved the amended DOE ARRA State Plan (see attached notice of approval from the DOE Performance and Accountability for Grants in Energy (PAGE) website).

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Recommendation #2 To: Community Services and Development, Department of

To ensure it receives the remaining 50 percent of its $186 million award for the Weatherization program, Community Services should seek federal approval to amend its plan for implementing the Weatherization program and seek an extension from Energy for fulfilling the progress milestones. In addition, it should promptly develop and implement the necessary standards for performing weatherization activities under the program and develop a plan for monitoring subrecipients that includes all requirements called for by the Recovery Act.

Annual Follow-Up Agency Response From January 2012

The recommendation suggested that the department seek federal approval to amend its plan for implementing the Weatherization program and seek an extension from the Department of Energy (DOE) for fulfilling the progress milestone outlined in the Weatherization Program Notice, 10-5, and necessary to receiving the remaining 50 percent of the $186 million DOE ARRA grant funds. The recommendation offered by the BSA, centered on concerns with program implementation delays and CSD's ability to achieve the progress milestones by the self-imposed target date of September 30, 2010. Because the September 30th date was a CSD determination, and failure to accomplish the progress milestones by this date did not pose any risk to California receiving the funding balance of DOE ARRA grant funds (i.e. only delayed the release of funds to CSD), the Department did not see any benefit in seeking any federal approved adjustment to internal plans for achieving the progress milestones. On November 16, 2010, CSD issued an email communication (see attached November 17th email to DOE) to DOE confirming the achievement of all the performance requirements and progress achievements tied to the overarching program milestone objectives. On November 30th, DOE (see email dated November 30th from DOE) lifted the administrative hold on the remaining 50% grant funds, thus affording CSD the ability to access funds and distribute to local subgrantees. Additionally, CSD has implemented a comprehensive monitoring plan for monitoring subrecipients to verify compliance with Davis-Bacon Act, weatherization installation standards, energy audit protocols, program requirements, and whistleblower complaints. CSD plans to amend the DOE ARRA state plan to reflect changes in all facets of the program, to include an updated description of CSD's monitoring program.(2011-041, pp. 87-88)

California State Auditor's Assessment of Annual Follow-Up Status: Resolved

Recommendation #3 To: Community Services and Development, Department of

To comply with federal cash management rules that govern the use of Weatherization program funds, Community Services should ensure it has the authority to provide advances as outlined in its current policy and segregate the duties of preparing claim schedules requesting payments from the duties of accessing Weatherization program funds.

1-Year Agency Response

Community Services stated that in consultation with Energy and according to its guidance, Community Services has revised the advance payment provisions in its contracts to ensure compliance with federal rules. Community Services reported the new advance payment provisions were included in contract amendments released to all Weatherization program providers funded by the Recovery Act on December 31, 2010. (2011-406, p. 202).

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #4 To: Community Services and Development, Department of

To strengthen its ability to monitor Recovery Act Block Grant subrecipients, Community Services should finalize the monitoring guide that focuses on Recovery Act specific requirements.

1-Year Agency Response

As recommended by the Bureau of State Audits, Community Services’ field staff used the new Recovery Act Block Grant Monitoring tool for all onsite monitoring visits. (2011-406, p.203)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #5 To: Community Services and Development, Department of

To strengthen its ability to monitor Recovery Act Block Grant subrecipients, Community Services should create a timeline and develop a risk-based monitoring plan to ensure that subrecipients of block grant funds authorized by the Recovery Act are monitored in time to allow subrecipients to correct any findings and implement recommendations prior to the September 30, 2010, deadline for providing block grant services.

1-Year Agency Response

As recommended by the Bureau of State Audits, Community Services’ field staff used the new Recovery Act Block Grant Monitoring tool for all onsite monitoring visits. As of December 15, 2010, field staff completed all 43 scheduled onsite reviews. The Recovery Act Block Grant program ended September 30, 2010, with the final close-out completed on December 29, 2010. (2011-406, p.203)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #6 To: Community Services and Development, Department of

To strengthen its ability to monitor Recovery Act Block Grant subrecipients, Community Services should follow its procedures to track the results of monitoring subrecipients that will allow management to ensure that program staff promptly follow up on findings of program noncompliance and that the findings are promptly corrected by subrecipients.

1-Year Agency Response

As recommended by the Bureau of State Audits, Community Services’ field staff used the new Recovery Act Block Grant Monitoring tool for all onsite monitoring visits. As of December 15, 2010, field staff completed all 43 scheduled onsite reviews. The Recovery Act Block Grant program ended September 30, 2010, with the final close-out completed on December 29, 2010. The SharePoint automated tracking system captures relevant monitoring data and provides the capability to generate monthly status reports. According to Community Services, monthly status reports developed to-date include the following: • Status of monitoring follow-up • Closed findings • Status of open findings and recommendations • Status of open Recovery Act findings and recommendations • Recovery Act Block Grant and Block Grant expenditure reporting activity (2011-406, p.203)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #7 To: Community Services and Development, Department of

To comply with federal cash management regulations that govern Recovery Act Block Grant funds, Community Services should define the financial hardship under which it will provide cash advances to subrecipients. In addition, Community Services should implement procedures to ensure that it draws federal program funds from the correct grant.

Annual Follow-Up Agency Response From January 2012

This recommendation could not be implemented because CSD eliminated the "financial hardship" language in its ARRA subagreements. The financial hardship requirement was eliminated as a matter of policy and consistency with State CSBG law. There are no financial hardship prerequisites for advance payments under the applicable Recovery Act Block Grant requirements. The State CSBG statute [CA Gov. Code section 12781] provides that eligible entities are automatically entitled to advance payments of 25 percent of the contract amount. Therefore, after considering the BSA's recommendation, CSD determined that the financial hardship provision should be eliminated in the interest of avoiding unnecessary administrative requirements for agencies receiving CSBG ARRA funds. CSD's Financial Services Unit generates a CALSTARs report each month to review to ensure that the correct grants have been charged. On a monthly basis, CSD performs a reconciliation of those CALSTARs reports against the Draw-Downs to make sure they balance and that the correct grant has been charged. Attached are Financial Services Unit desk procedures on Reconciliation of the Unobligated Balance for Federal Grants and related information on accessing CALSTARs and Federal payment management systems. (2011-041, p. 89).

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

All Recommendations in 2009-119.2

Agency responses received after June 2013 are posted verbatim.