TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS

www.idhca.state.tx.us
Rick Perry
BOARD MEMBERS
GOVERNOR
C. Kent Conine. Chair
Gloria Ray. Vice Chair
Leslie Bingham Escarefio
Michael Gerber Tom H. Gann
ExECUTIVE DIRECTOR Lowell A. Keig
Juan S. Mufiol., Ph.D.
April 13,2010

Ms. M~ria A.guilar

Executive Duector UJ 'b.
~
Community Action Program, Inc.
P.O. Box 144
Abilene, Texas 79604

Re: DOE Weatherization Assistance Program Contract #56090000455

LIHEAP Weatherization Assistance Program Contract #81 090000488
DOE ARRA Weatherization Assistance Program Contract #16090000658
DOE ARRA Weatherization Assistance Program Contract #16090000745
DOE ARRA Weatherization Assistance Program Contract #16090000774

Dear Ms. Aguilar:

Enclosed is a report that details the monitoring review of Community Action Program, Inc. (CAP)
Weatherization Assistance Program contracts with the Texas Department of Housing and Community
Affairs (The Department). This infOlmation is provided to ensure that compliance with the contracts is
maintained and that services to the poor, elderly, and disabled are offered in the most expeditious and
economical manner.

This monitoring report notes ten (10)findings and two (2) recommended improvements In the financial
and programmatic areas of the program. The Department is concerned with the status of your
weatherization program as there are significant deficiencies in CAP's fiscal operations. Please submit
a response to this report to t!lis office within t!lirty (30) days of the date of this leiter.

If we can be of any assistance, please feel free to contact Jason Seale, Program Officer, at (512) 463-
0172. The assistance provided to the Program Officers by the agency is greatly appreciated.

Mi hael DeYoung
ellfy
Di ision Director
Community Affairs Division

c: Ms. Sandy Bowen, Board Chair

221 EAST liT" • P. O. Box 13941 • AUSTIN, TEXAS78711.3941 • (800) 525-0657 • (512) 475-3800
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Directory of Monitoring Sections

Section I. Financial Review

Section II. Travel and Timesheets

Section III. General Liability and Pollution Occurrence Insurance

Section IV. Property Management

Section V. Procurement

Section VI. Audit

Section VII. Personnel Policies and Procedures

Section VIII. Performance Review/Onsite Inspections

Section IX. Administrative

Section X. Client File/Multifamily Review

Section XI. Denied Files

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Dates of Review: March 1,2010 -March 5, 2010

Focus of Review

CONTRACT NAME CONTRACT CONTRACT CONTRACT DATES

NUMBER AMOUNT

DOE 56090000455 $431,769.00 41112009 to 3/31/2010

LIHEAP 81090000488 $530,496.00 4/1/2009 to 3/31/2010

ARRA 16090000658 $2,056,426.00 9/1/2009 to 8/31/2011

ARRA -City of Abilene 16090000745 $575,910.00 9/1/2009 to 8/3112011

ARRA-NIP 16090000774 $250,000.00 9/1/2009 to 8/31/2011

.

On-site review of the Community Action Program, Inc. (CAP) implementation of the
Department of Energy, Low Income Home Energy Assistance Program and American Recovery
and Reinvestment Act of 2009 Weatherization Assistance Program (WAP). Specific areas of
review included Financial Reporting, Contract Agreements, Procurement, Personnel and the
Management of the Department of Energy, Low Income Home Energy Assistance Program and
American Recovery and Reinvestment Act of2009 contracts.

Program Evaluation

The evaluation of the program consisted of: Interviews with the Community Action Program Inc.
(CAP) personnel, analysis of the fiscal system, review of programmatic records, on.site
inspections, client file reviews and inventory review.

The following was noted during the review:

• Antiquated Agency Organization Chart

• Inadequate Accounting Records and Support Documentation
• Inadequate Documentation of Current Contract Inventory
• Lacking Documentation for PY08 Closeout Report
• No Declaration of Income Statement Policy/Procedure
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Finding #1 At the time of monitoring, CAP was unable to provide adequate support
documentation to reference monthly expenditures for DOE, LIHEAP and
ARRA contracts. Insufficient financial documentation did not allow
Program Officers to conduct a thorough review of the financial portion of
the monitoring. During the exit interview, CAP was given an additional
five (5) business days to provide the requested documentation to the
Department. Although CAP did meet the deadline requirements for
submittal, the documentation provided did not prove substantial to be
cross-referenced with monthly expenditure reports. An additional two (2)
days of monitoring were conducted on March 29 - 30, and after multiple
attempts CAP staff were unable to provide substantial documentation from
the accounting software program to reconcile differences in monthly
expenditure reports. CAP is currently in the process of hiring a Fiscal
Officer and Accountant. Until that time, the Executive Director and
Operations Manager are attempting to reconcile the differences in general
ledgers and monthly expenditure reports.

Action
Required: As part of the monitoring response to this report, the Department is
requiring CAP to submit documentation reconciling general ledgers to
expenditure reports for all months of PY08 DOE & LIHEAP contracts. If
adequate documentation is not provided to the Department within forty-
five (45) days, the Department may impose sanctions including, but not
limited to withholding payments, suspension of contract and/or
termination. Reference: ARRA Contract Section 10, DOE Contract
Section 8, LIHEAP Contract Section 8, 10 CFR ~440.24, OMB
Circular A-110 Subpart C (21), TAC ~5.16 (7) (K)

Finding #2 At the time of monitoring, CAP was responsible for submitting DOE and
LIHEAP programmatic and expenditure reports late for PY09. DOE and
LIHEAP programmatic reports for June 2009 and July 2009 in addition to
DOE and LIHEAP expenditure reports for June 2009, July 2009, August
2009 and September 2009 expenditure reports were submitted past the
contract deadline.

Action
Required The Department reminds CAP that DOE and LIHEAP programmatic and
expenditure reports are to be submitted to the Department no later than
fifteen (15) days after the end of each month of the Contract term. ARRA
programmatic and expenditure reports are to be submitted to the
Department no later than five (5) days after the end of each month of the
Contract term. Reference: DOE Contract Section 11 (A), LIHEAP
Contract Section 11 (A)
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ATTACHMENT A

Units Reviewed Comments

13 units reviewed 12 DOEILIHEAP, 1 ARRA - Returns noted below

Client Return s To Address

Attic scuttle hole needs. insulation blocking and
sealing (hallway closet access), flue pipe needs
extra sealing at ceiling penetration into attic, seal
and reduce infiltration reduction at bedroom
window NC unit, CO detector/smoke detector
needs to be installed (invoiced and paid but never
installed
Return to remove existing hot water heater and
replace with direct vent unit (mC M2005,2)
Return to atch lar e hole beneath kitchen sink
Replace exhaust fan over gas stove.
Install mechanical ventilation into bathroom,
otential health hazards si hted mc M1507.2
Attic scuttle hole needs insulation blocking and
sealing around access (IRC NIl 02.2.3).
Insulation level inconsistent (HVAC installed
after insulation), re.level new insulation.
Existing swamp cooler vents in. attic need to be
re laced with ro er able vents (mC R806
Attic scuttle hole needs insulation blocking and
sealing around access (IRC Nll02,2.3)
Block vents/seal door leading to hot water heater
closet (mC G2407)
Install combustion air drop from attic into water
heater closet.
Attic scuttle hole needs insulation blocking and
sealing around access (IRC Nll02.2.3)
Return to install attic ventilation (non-existent)
(mCR806)
Return to adjust/extend hot water flue pipe from
combustion chamber to outside
Return to identif'y additional infiltration measures
(Initial blower door @ 8108 cfrn, final blower
door @ 4637 cfm. Required reduction - 4054
cfm

Action Required: Retwn and address. Upon completion, verification of retwns must be
submitted to the Department within forty-five (45) days of this report.
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• Late Submittal of DOE and LIHEAP Expenditure Reports

• Did Not Submit PY08 DOE and LIHEAP Inventory Reports
• Undocumented Carbon Monoxide Pre-Post Tests
• Incomplete Blower Door Data Sheet
• Incomplete Building Weatherization Report (BWR)
• Outdated Income Documentation
• Lack of Documentation for LSW Practices
• Missing Provision in Personnel PolicieS and Procedures

Section I. Financial Review

EXPENDITURES AS OF JANUARY 2010

CONTRACT YEAR- TO-DATE % OF ORIGINAL # UNITS # UNITS IN

NAME EXPENDITURES CONTRACT COMPLETED PROGRESS
AMOUNT

DOE $265,767.33 61.55% 48 18

LIHEAP $268,952.77 50.70% 52 34

ARRA(658) $93,052.73 4.52% 0 31

ARRA(745) $44,619.46 7.75% 1 12

ARRA (774) $607.65 0.24% 0 1

Recommended Improvement #1 Review of the January 2010 expenditure report revealed that
the LIHEAP average cost per unit was above the household maximum of$4,000.OO. The average
cost per unit for the LIHEAP contract was at $4,036.94. CAP is reminded that the average cost
per unit must be at or below the maximum allowable by the end of the contract period. Any
costs above the maximum average cost per unit will be subject to disallowed cost.

Recommended Improvement #2 Review of the January 2010 expenditure reports for DOE and
DOE ARRA revealed Administrative expenditures were above the maximum allowable of 5%.
Current Administrative expenditures for the DOE contract are 5.83%. Current Administrative
expenditures for the DOE-ARRA contracts (658) and (745) are 36.33% and 34.92% respectively.
The Department reminds CAP that Administrative expenditures are required to be below the
maximum allowable by contract end. Any costs above the maximum allowable will be subject to
disallowed cost.
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Finding #3 At the time of monitoring, CAP was unable to provide support

documentation for PY08 DOE and LIHEAP contract final reports. March
2008 expenditure reports were presented, but a lack of financial
documentation to reference with did not allow Program Officers to
conduct a thorough monitoring of final expenditures for PY08.

Action
Required CAP must submit to the Department within forty-five (45) days the
closeout reports from PYOSDOE and LIHEAP contracts. Failure to do so
may result in ineligibility to receive additional funds or additional
contracts. Reference: DOE Contract Section 11 (B), LlHEAP
Contract Section 11 (B)

Section IV. Property Management

Finding #4 At the time of monitoring, CAP had not submitted to the Department an
annual contract inventory for PY08 DOE & LIHEAP contracts, outlining
purchases with a unit cost of $5,000 or more.

Action
Required CAP must submit to the Department within forty-five (45) days a
completed contract inventory for PY08 DOE & LIHEAP contracts. The
Department reminds CAP that PY09 DOE & LIHEAP contract inventories
must be submitted to the Department no later than 60 days after the end of
the contract term. Reference: DOE Contract Section 11 (C), LIHEAP
Contract Section 11 (C)

Section VII. Personnel Policies and Practices

Finding #5 At the time of monitoring, CAP could not provide a Current Agency
Organization Chart and a Declaration of Income Statement Policy as
required by Texas Administrative Code rules.

Action
Required CAP must submit within forty-five (45) days an updated organizational
chart and a policy for their use of the Declaration of Income Statement
(DIS) within all Community Affairs programs. Reference: TAC ~5.16
(7) (B), TAC ~5.16 (7) (R)

Finding #6 Review of CAP's Guidelines for Personnel Management, Policies and

Practices noted a missing provision to establish, maintain, and utilize
internal control systems and procedures sufficient to prevent, detect, and
correct incidents of waste, fraud and abuse.
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Action
Required CAP must review its Guidelines for Personnel Management, Policies and
Practices and submit to the Department within forty-five (45) days a
revised copy to include the missing provision to establish, maintain, and
utilize internal control systems and procedures sufficient to prevent,
detect, and correct incidents of waste, fraud and abuse. Reference:
ARRA Contract Section 26, DOE Contracts Section 22, LIHEAP
Contract Section 22

Section VIII. Onsite Inspections

Finding #7 A random sampling as well as on-site unit inspections revealed a
deficiency in minimum standards for Lead Safe Work Practices as
outlined by DOE. Review of client file documentation affirmed the
potential of lead hazards in pre- I978 units that were recipients of
weatherization services provided by CAP.
Action
Required CAP is reminded of the implementation of EPA's LRRPP (Lead;
Renovation, Repair and Painting Program) Final Rule dated April 22,
20 I O. The listed reference will provide Minimum Standards for LSW,
found in WPN 08-6, Attachment A. Failure to follow EPA guidelines for
LSW could result in fines administered by the EPA as well as disallowed
costs administered by the Department. Reference: WPN 08-6, WPN 08-
6, Attachment A - Minimum Standards for LSW

Finding #8 Client J. Harris received 3 heating source retrofits, one of which was a
35000 Btu wall heater and two (2) 6000 Btu unvented space heaters with
ODS. One of the replacement unvented space heaters was charged to
DOE.
Action
Required Weatherization staff and fiscal staff are to review the Space Heater Policy
from DOE to provide a better understanding of allowable measures
provided by DOE. The Department is questioning the costs of this
measure in the amount of $575.00
Reference: WPN 08-4, Space Heater Policy

Section IX. Administrative

Finding #9 CAP was unable to provide adequate support documentation for material
specifications being utilized by its current contractors. Missing material
specifications are replacement windows, replacement doors, storm
windows, gas and electric furnace, gas and electric water heater, air
conditioning, evaporative coolers, window screens and refrigerators.
Documents submitted that meet Code of Federal Regulation (CFR)
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requirements are waH/floor/attic insulation, caulking/sealants/glazing and

weatherstripping.

Action
Required CAP must submit to the Department within forty-five (45) days additional
material specifications for the above referenced materials. The
Department reminds CAP that materials utilized in the Weatherization
Assistance Program that don't comply with 10 CFR 440, Attachment A
will be subject to disallowed cost.. Reference: 10 CFR 440,
Attachment A - Standards for Weatherization Materials

Section X. Client FilelMultifamily Review

Finding #10 At the time of monitoring, a review of a random sampling of PY09 WAP
client files noted six (6) deficiencies. Two (2) client files contalned
incomplete blower door data sheets, two (2) client files contained
incomplete Building Weatherization Reports, one (I) client file contained
an incomplete Declaration of Income Statement (DIS) form and one (1)
client file contained inadequate income documentation.

Action
Required CAP is reminded that all client files must contain, at minimum, the list of
record-keeping requirements found in all WAP contracts. Reference:
ARRA Contract Section 13, DOE Contract Section 10, LIHEAP
Contract Section 10.

Signature Date

Signature Date 4/15/10

Signature Date L/~J()

~I

t Manager, Monitoring