QUALITY ASSURANCE/QUALITY CONTROL (QA/QC) PROCEDURES

Homeowner Rehabilitation Implementation Tool #5

Description: As part of the Disaster Recovery Homeowner Rehab Program Design and Implementation Toolkit, the Quality Assurance/Quality Control (QA/QC) Procedures, may be used by a CDBG-DR grantee as a general approach to monitoring and oversight of the disaster recovery programs, including housing program. The purpose is to minimize findings from the federal level, and provide sufficient on-site visits and desk reviews by the state of its subrecipients. Modification of Source Documents Provided by: State of Texas, General Land Office Caveat: This is an informational tool and/or template that should be adapted to each grantees specific program design.

For More Information This resource is part of the Disaster Recovery Homeowner Rehab Program Design Toolkit. View all of the Disaster Recovery Toolkits here: https://www.onecpd.info/resource/2853/cdbg-dr-toolkits. For additional information about disaster recovery programs, please see your HUD representative.

This is not an official HUD document and has not been reviewed by HUD counsel. It is provided for informational purposes only. Any binding agreement should be reviewed by attorneys for the parties to the agreement and must conform to state and local laws.

U.S. Department of Housing and Urban Development Community Planning and Development, Disaster Recovery and Special Issues Division

QUALITY ASSURANCE/QUALITY CONTROL (QA/QC) PROCEDURES

Subrecipient and Grantee Monitoring Strategy and Schedule
This document is to be used by a CDBG-DR Grantee as a general approach to monitoring and oversight of all programs, including housing. The purpose of the Quality Assurance/Quality Control (QA/QC) procedures is meet performance measures, rules and requirements identified by the federal government and by the grantees contractual agreement with a subrecipient. The procedures have been created to achieve the following goals: Implement continuous process improvement Utilize data collected during the desk review process to focus QA/QC efforts Perform desk reviews in a timely manner Perform efficient on-site reviews for areas that reveal the most risk from the desk reviews Perform single audit reviews in a timely manner Eliminate non-value added activities within the DR Program

The objectives are as follows: Determine if Grantees, Subrecipients, Project Management or other for-partner companies (PMCs) and Grant Administrators are adhering to the terms of their agreement with the Disaster Recovery Grantee. Assure costs/draws submitted by Grantees, Subrecipients, PMCs, and Grant Administrators are eligible based on applicable laws and CDBG regulations. Determine if the Grantees, Subrecipients, PMCs and Grant Administrators have adequate programmatic and financial controls. Continuously assess the capacity of the Grantees, Subrecipients, PMCs or Grant Administrators over the life of the program. Continuously identify areas of opportunity and provide technical assistance where needed to Grantees, Subrecipients, PMCs and Grant Administrators. Monitor, evaluate and recommend improvements for all DR program processes. Comply with federal monitoring requirements of 24 CFR 570.501(b) and with 24 CFR 84.51 and 85.40. Ensure records are maintained throughout the life of the program and after. Issue findings and concerns where applicable based on agreed upon attributes. Follow-up with any compliance issue, assure corrective actions and controls are in place, and provide technical support to Grantees, Subs, PMCs, Grant Administrators and Internal divisions

Strategy
Desk reviews will be performed on portions of all executed contracts. These desk reviews will be conducted in a progression that moves along a contracts life cycle for five critical core components as follows: Setups/Applications Contracts and Amendments Environmental Review and Clearance Construction Close Out

If issues and/or risks emerge during desk reviews that require further review at the subrecipient/grantee level, an onsite visit will be conducted. If more than eight (8) findings reported, an on-site visit is required.1
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Note to CDBG-DR Grantee: Many grantees may choose not to elect a requirement for on-site grantees by number of findings.

Homeowner Rehab Program Tool: Homeowner Rehab Program QA/QC Standard Operating Procedures

Due to the size and scope of CDBG-DR awards, it may be necessary to identify and train staff to conduct the QA/QC whom are not the same as those overseeing the program. Training must include specific modules on CDBG-DR appropriations.

Testing Attributes
Testing attributes are items that QA/QC will test and monitor for during the desk review process. While the Program applies the following three types of attributes to operations federal guidelines, state guidelines, and self-imposed program guidelines, QA/QA will focus on federal guidelines as the essential requirements for the Program to meet. A periodic meeting with applicable parties will be held to discuss state and self-imposed guidelines to determine the validity and/or the value that the requirement adds to the program. These attributes will be either kept and monitored, or eliminated.

Findings Process
Any finding that has been reported is clarified and tracked. Once an issue is identified, QA/QC staff work with Program staff to ensure that the condition identified is as it appears.2 QA/QC staff issues a clarification letter to confirm the condition. Program staff will respond: QA/QC staff will either clear it or issue a Compliance Notice. Program will develop and respond with a corrective action which will be evaluated to determine it satisfies the finding. Once the corrective action has been approved, a clearance letter will be issued.

Communication
Communication methods will depend upon the type of review conducted. They may include the following: When conducting a desk review of quality assurance on program activities, compliance notices will be issued to Program when a specific requirement has not been met. Program will prepare responses and make corrections and/or action plans to address the issues noted. If issues and/or risks emerge during desk reviews that require further review at the subrecipient/grantee level, an onsite visit will be conducted and those results will be issued in a report to the subrecipient/grantee for any corrective actions required. Special reviews, joint program technical assistance and QA/QC reviews, and other onsite reviews will be reported to the subrecipient/grantee and/or other audiences as identified according to the circumstances of the review. Staff will review and issue a management decision on audit findings within the subrecipients/grantees audit report and ensure that the subrecipient/grantee takes appropriate and timely corrective action.

Assumes the QA/QC staff is different than Program staff.

Homeowner Rehab Program Tool: Homeowner Rehab Program QA/QC Standard Operating Procedures

Schedule Desk Reviews: {Enter calendar dates when reviews will take place}
Housing Round One. Program(s) for Review:___________________ Set Up/Application Reviews Underwriting Reviews Environmental Reviews Construction Reviews, if initiated.

*Ensure that each program receives a desk review within the first calendar years.3 As the programs progress, construction reviews and close-out reviews will be essential.

On-site Reviews: {Enter calendar dates when visits and reviews will take place}
Housing Round One (Joint Quality Assurance and Program Technical Assistance Reviews) Program(s) for review:_________________ For each program, which critical component will be reviewed: Setups/Applications Contracts and Amendments Environmental Review and Clearance Construction Close Out

*Ensure that each subrecipient receives a desk review within the first calendar years.4 As the programs progress, construction reviews and close-out reviews will be essential.

Ongoing
Ongoing QA/QC of subrecipients is focused on: prior audit issues identified by subrecipients internal audit, and monitoring findings or concerns identified by a HUD monitoring report. Steps to ensure resolution include: Tracking of all prior findings and concerns reported via HUD, Internal Audit, etc. will be conducted with focus on resolution and closure. A weekly meeting is conducted and tracking of all progress is recorded. Clarification Letters are prepared and submitted to HUD to ensure that all planned actions on reported findings, concerns, and/or observations are adequate to address the issue. Closure Letters are prepared and submitted to HUD requesting consideration of actions taken and a determination to close outstanding issues if the actions taken fully address the issues.

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Note to CDBG-DR Grantees: As many CDBG-DR programs spend funds rapidly, timelines may vary. Note to CDBG-DR Grantees: See Footnote 3.

Homeowner Rehab Program Tool: Homeowner Rehab Program QA/QC Standard Operating Procedures