Report 2009-119.2 Recommendation 7 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 #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.