CSBG Powerpoint Show Corrective Action, Termination or Reduction of Funding for CSBG Eligible Entities

1. Community Services Block Grant (CSBG)

Corrective Action, Termination or Reduction of Funding for CSBG Eligible Entities

2. CSBG Information Memorandum 116 Corrective Action, Termination, or Reduction of Funding of CSBG-Eligible Entities

• Issued December 4, 2009

• Step-by-step description of necessary procedures for corrective actions, quality improvement plans, termination or reductions in funding for cause

• Emphasis on corrective actions and quality improvement

• No new deadlines or program requirements

3. CSBG Distribution Essentials

• States, U.S. Territories, and Tribes receive CSBG allocation based on statutory formula

• States may retain up to 10% of allocation for discretionary projects (5% administrative cap)

• Eligible entities must receive 90% of funding

• Recovery Act appropriation specified that 99% of CSBG supplemental appropriation must go to eligible entities

4. What Are Eligible Entities?

• Nonprofit or public organizations

• Tripartite board representing low-income community, public officials, and community representatives

• State established lists of eligible entities are typically consistent from year-to-year

• Changes to the distribution of funds to eligible entities must follow procedures outlined in the CSBG Act

5. Proportional Share

• The “proportional share” of CSBG funds is the amount of non-discretionary grant funds allocated to an eligible entity compared to the amount allocated to other eligible entities

• If an entity received 1/10th of the funds distributed to all eligible entities in a prior year, that entity would receive 1/10th of funds in the following year.

• Changes to proportional share may take place only in compliance with the CSBG Act

6. Cause for Changes to Proportional Share

• Statewide Redistribution of Funds — Changes due to census data, other appropriate data (e.g. poverty data), designation of new eligible entity, or severe economic dislocation — CSBG Act, Section 676(c)(1)(A)

• Failure to Comply with State Plan, Standard, or Requirement — CSBG Act Section 676(c)(1)(B) and Section 676(c)(2)

7. 10 Key Steps in Termination or Reduction for Performance-Related Cause

1. State review and monitoring

2. Determination of performance deficiency

3. Notification of performance deficiency

4. Communication of corrective action requirements

5. Technical assistance determination

6. Training & technical assistance offer (if appropriate)

7.Report on training and technical assistance offered

8. Quality improvement plan (discretionary)

9. Opportunity for hearing

10. Initiation of  proceedings to terminate or reduce funding

8. Step 1: State Review and Monitoring

• Full On-Site Review At least once every three years for all eligible entities

• New Entities On-site review immediately after completion of 1st year

• Follow-Up Reviews Prompt return visits to eligible entities that fail to meet goals, standards, and requirements established by the State

• Other Reviews as Appropriate Includes reviews of entities that have had other Federal, State, or local grants terminated for cause

Key References: §678C(a),  42 U.S.C. §9915(a)

9. Note: Responsibility to Investigate Issues

• Review when funds are terminated for cause in related programs (e.g. Head Start, Low Income Home Energy Assistance Program (LIHEAP), and the Weatherization Assistance Program) to assure similar issues or concerns do not exist with CSBG funds

• Investigate any “whistleblower” allegations of fraud or abuse of CSBG funds and notify Federal authorities

• HHS Hotline: 1-800-447-8477

10. Step 2: Determination of Performance Deficiency

• State determines based on review that an eligible entity

Fails to comply with terms of an agreement

Fails to comply with State plan,

Fails to provide CBSG services, or

Fails to meet appropriate standards, goals, and other requirements, including performance objectives

References: §678C(a), 42 U.S.C. §9915(a)

11. Step 3: Notification of Performance Deficiency

• Notification should be specific and documented

• Maintain record of dates and method of notification

12. Step 4: Communication of Corrective Action Requirements

• Specific actions required to correct performance deficiency must be communicated

• Maintain record of date and method of communications

• Maintain record of any deadlines and documentation requirements

13. Step 5: Training and Technical Assistance Determination

• Determine whether technical assistance is appropriate to help correct deficiency

• Consult with OCS and/or national technical assistance providers as necessary to secure appropriate technical experts

14. Step 6: Training and Technical Assistance Offered

• Maintain record of types of technical assistance offered

• If technical assistance is not offered, maintain record of State rationale for not providing technical assistance

15. Step 7: Report on Training and Technical Assistance Offered

• Provide report to OCS documenting either:

Specific training and technical assistance offered (e.g. copies of technical assistance plans); or

The State rationale for not providing technical assistance.

• If training and technical assistance offered, document whether accepted, when provided, and outcome.

• If training and technical assistance refused, document the stated reasons for refusal.

16. Step 8: Quality Improvement Plan

• State discretion based on seriousness of deficiency and time reasonably required to correct deficiency

• If Quality Improvement Plan warranted, State must allow entity to develop and implement plan within 60 days of being informed of deficiency

• Quality Improvement Plan should identify:

Actions that will be taken to correct deficiency;

State-approved timeframe for completion of actions.

• State must review and issue a decision on whether to approve a plan not later than 30 days after receiving plan and specify reasons if not approved.

17. Step 9: Opportunity for Hearing

• States must provide an opportunity for a hearing prior to terminating eligibility for CSBG funding or reducing proportionate share of CSBG funds.

• Hearing procedures should be consistent with applicable State policies, rules, or statutes.

• Subject to Federal review

• Suggested documentation includes:

Notice of hearing

Hearing official(s)

Names of participants

Documentation of evidence

18. Step 10: Proceedings to Terminate or Reduce Funding for Cause

• Depending on hearing outcome, State may initiate proceedings to terminate designation or reduce funding for cause

• State must notify the eligible entity and OCS of the decision

19. Opportunity for Federal Review

• A Federal review of decision to terminate or reduce funding may be requested within 30 days of notification of State decision.

• State may not discontinue present or future funding until Department of Health and Human Services (HHS) response.

• CSBG Act specifies that HHS must complete review within 90 days after receiving all necessary documentation for review.

20. Address to Request Federal Review

U.S. Department of Health and Human Services

Administration for Children and Families

Office of Community Services

Division of State Assistance

Attention: Community Services Block Grant Program

370 L’Enfant Promenade, S.W., 5th Floor West

Washington, DC 20447

Note: Overnight mail and phone confirmation of receipt strongly recommended

21. Award of Funds to a New Eligible Entity

• State may solicit applications and designate as an eligible entity either:

Private nonprofits geographically located in the unserved area;

Private nonprofits geographically contiguous or within reasonable proximity already providing related services in un-served area.

• If no qualified nonprofit identified, State may designate political subdivision (e.g. county).

• Tripartite board requirements must be met

• New award may not be issued until Federal review of decision to terminate for cause is completed or 90 days have passed since all documentation provided for Federal review.

22. Potential for Direct Federal Funding

• Section 678(c) of CSBG Act authorizes HHS to fund an eligible entity directly if a State violates CSBG Act requirements.

• In such instances, State allocation would be reduced by the amount provided to the eligible entity

23. Additional Options to Protect Federal Funds

• Cost reimbursement with review of expenditures during a period of Quality Improvement Plan to mitigate substantial risks.

• Formal investigation and referral of allegations of waste, fraud, or abuse of funds.

24. Key Points

• CSBG Act Provides Protections and responsibilities at Federal, State, and eligible entity levels

• Communication and documentation are critical at all stages of corrective action, quality improvement, and funding actions.

• CSBG Act procedures should be utilized in any instances of significant performance deficiency or risk.