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U. S. Economic Development Administration (EDA) Grant Agreement for the Bee Branch Stormwater Pumping Station Phase IV of the Bee Branch Watershed Flood Mitigation Project Copyrighted October 16, 2023 City of Dubuque Consent Items # 019. City Council Meeting ITEM TITLE: U. S. Economic DevelopmentAdministration (EDA) GrantAgreement forthe Bee Branch Stormwater Pumping Station Phase IV of the Bee Branch Watershed Flood Mitigation Project SUM MARY: City Manager recommending City Council adopt a resolution approving the Financial Assistance Award agreement with the U. S. Economic Development Administration and authorizing the City Manager to act as the City's authorized representative to secure $7,700,000 in grant funding for the Bee Branch Stormwater Pumping Station Project (Phase V of the Bee Branch Watershed Flood Mitigation Project). RESOLUTION Approving a US Department of Commerce Economic Development Administration Disaster Relief Opportunity Grant for the Construction of a New Stormwater Pumping Station at the 16th Street Detention Basin SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Resolutions Award Document Supporting Documentation Dubuque THE CITY QF � All-Meriea Ciry DLT B E ; . � . � �� � � MaSt� Z�C� aYd t�Q Mt55ZSSZ Z zoa�•zoiz•�ai3 YP pp za��*zai� TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Bee Branch Stormwater Pumping Station — Phase IV of the Bee Branch Watershed Flood Mitigation Project (Project #5586500007) U. S. Economic Development Administration (EDA) Grant Agreement DATE: October 11, 2023 City Engineer Gus Psihoyos is recommending City Council adopt a resolution approving the Financial Assistance Award agreement with the U. S. Economic Development Administration and authorizing the City Manager to act as the City's authorized representative to secure $7,700,000 in grant funding for the Bee Branch Stormwater Pumping Station Project (Phase V of the Bee Branch Watershed Flood Mitigation Project). I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Gus Psihoyos, City Engineer Jenny Larson, Chief Financial Officer John Klosterman, Public Works Director Arielle Swift, Assistant Public Works Director Teri Goodmann, Director of Strategic Partnerships Deron Muehring, Civil Engineer II Dubuque THE CITY OF � pll•America Ci� DuB E �.�K,����K�, . � � ��� � � Maste iece oYl the MisSisSi i zoo��zoiz�zoi3 �`P pp zoi�*zatg TO: Michael C. Van Milligen, City Manager FROM: Gus Psihoyos, City Engineer SUBJECT: Bee Branch Stormwater Pumping Station — Phase IV of the Bee Branch Watershed Flood Mitigation Project (Project #5586500007) U. S. Economic Development Administration (EDA) Grant Agreement DATE: October 9, 2023 INTRODUCTION The purpose of this memorandum is to request approval to enter into a Financial Assistance Award agreement with the U. S. Economic Development Administration (EDA) securing $7,700,000 in grant funding for the Bee Branch Stormwater Pumping Station — Phase IV of the Bee Branch Watershed Flood Mitigation Project. BACKGROUND In November of 2013, the City Council passed Resolution 335-13 adopting the 2013 Drainage Basin Master Plan Amendment that outlined several improvements throughout the Bee Branch watershed to mitigate the effects of future flooding and disasters. Collectively, the improvements form the basis of the multi-phase Bee Branch Watershed Flood Mitigation Project outlined below. Table 1. Twelve phases of the Bee Branch Watershed Flood Mitigation Project Phase Description Status 1 Carter Road Detention Basin Complete 2 West 32"d Street Detention Basin Complete 3 Historic Millwork District Complete 4 Lower Bee Branch Creek Restoration Complete 5 Flood Mitigation Gate Replacement Designed 6 Impervious Surface Reduction (Green Alleys) Initiated 7 Upper Bee Branch Creek Restoration Complete g 22nd Street Storm Sewer Improvements Complete to N. Main St. 9 Flood Mitigation Maintenance Facility Cleanup Initiated 10 North End Storm Sewer Improvements 11 Water Plant Flood Protection 12 17t'' Street Storm Sewer Improvements Complete to Heeb St. On December 4, 2013, the lowa Flood Mitigation Board voted to award the City$98,494,178 for the Bee Branch Watershed Flood Mitigation Project. On February 3, 2014 the City Council adopted Resolution 31-14 authorizing the execution of an agreement with the State of lowa Flood Mitigation Board and authorizing the City's use of sales tax increment funding for the Bee Branch Watershed Flood Mitigation Project. 1 The City has used a combination of stormwater utility revenue; local, state, and federal grant funding; and debt in order to construct the improvements associated with the flood mitigation plan. The state grant funding and the subsequent debt issuances allowed for much of the protection to be provided sooner than otherwise possible. With a total estimated cost of$250 million, the Bee Branch Watershed Flood Mitigation Project will prevent an estimated $582 million in damages over the 100-year design life of the project. With more than $163 million in funding assistance, for every dollar invested by Dubuque citizens it will prevent almost seven dollars in flood damage. The cost to build a new flood pumping station capable of handling flows from the Bee Branch Creek was initially estimated to cost approximately $10 million. To better afford the project improvements associated with all the phases of the Bee Branch Watershed Flood Mitigation Project, and in particular the increased costs associated with the Bee Branch Gate & Pump Station Project, the City sought additional financial assistance. In December of 2018, the City Council adopted Resolution 368-18, approving an application for $4,000,000 in EDA grant funding for the new stormwater pumping station project. The City was subsequently awarded $2,500,000 in EDA grant funding. In May of 2019, the City Council adopted Resolution 152-19, authorizing entering into a Financial Assistance Award Agreement with EDA as necessary for the City's use of $2,500,000 in EDA grant funding for the pumping station project. The City Council also pledged "the amount of $6,635,000 from state sales tax increment or local stormwater utility proceeds...." Per the Agreement, the project was required to complete the improvements by April 11, 2024. In May of 2022, the City Council adopted Resolution 177-22, approving the plans, specifications, form of contract, and estimated cost for the Bee Branch Stormwater Pumping Station Project, in the estimated amount of$15,790,000. The estimate of probable costs for the Project is as follows: Construction Contract $15,790,000 Contingency 720,000 Engineering 2,400,000 Total Project Cost $18,910,000 The funding plan for the improvements was as follows: State Sales Tax Increment Proceeds $9,614,000 Stormwater Utility Construction Funds 2,796,000 US EPA State Revolving Fund (SRF) Loan 2,600,000 US EDA Disaster Grant 2,500,000 DRA Distribution 1,400,000 TOTAL $18,910,000 In May of 2022, the City received two bids for the Bee Branch Stormwater Pumping Station Project (the "Project"). The low bid was $24,650,000, which was 56.1% over the Engineer's Estimate. The two bids were within 1.4% of each other, suggesting that the bids reflect the true cost of the project such that rebidding the project with the same design would likely L result in similar results. Due to funding limitations, the City Council adopted Resolution 222- 22 rejecting the bids for the Project. The City was aware that rejecting the bids would likely preclude the City's ability to fund the project using the $2.5 million in EDA grant funding. The City did discuss the possibility of EDA providing additional time to complete the project. However, EDA representatives indicated that the April 2024 deadline was a hard deadline and the City was forced to send a letter in June of 2023 to EDA rescinding the $2.5 million EDA grant for the Bee Branch Stormwater Pumping Station Project. EDA representatives reiterated their desire to assist the City with the Project and invited the City to reapply for EDA grant funding for the project. As directed by EDA, working with ECIA with support from others such as the Greater Dubuque Development Corporation, a new preliminary application was prepared and submitted by the July 28, 2023, EDA deadline. In September of 2023, the City Council adopted Resolution 298-23 approving the City's application for $7.7 million in EDA Disaster Relief Opportunity grant funding and pledged providing the required local matching funds in the amount of $19,012,000 with $2,600,000 from a State Revolving Fund loan and $16,412,000 from General Obligation Bonds. DISCUSSION The City was notified by the U. S. Economic Development Administration (EDA)that the City was awarded $7,700,000 in grant funding for the Bee Branch Stormwater Pumping Station Project (Project). The EDA also provided a Financial Assistance Award agreement (Agreement) for the City's consideration. The City must execute the Agreement by October 30, 2023, or EDA may declare the grant award null and void. The Agreement only applies to the estimated $26,712,000 construction cost of the project. Per the Agreement, the City's share is $19,712,000 as shown below. Construction $25,440,000 Contingency (5%) 1,272,000 Total Project Cost $26,712,000 EDA Grant $7,700,000 Grant Required City Cost Share $19,012,000 Project Grant Total $26,712,000 Per Resolution 298-23, the City committed to funding the local match using the $2.6 million in SRF previously planned for the Project — and as reflected on the State of lowa SRF Intended Use Plan (IUP) — and $16,412,000 in GO debt. However, the City can modify the funding plan and can do so as deemed appropriate as part of the Fiscal Year 2025 budget process. The total cost to construct the project, including construction engineering is as follows: Engineering $1,380,000 � Construction $25,440,000 Construction Contingency $1,272,000 $28,092,000 Following adoption of the FY25 budget, and per the Agreement, the City has until April 2024 to provide EDA with documentation that the matching share is in place and available. The Project bidding and construction schedule is as follows: Event/Milestone Date dopt FY2025 Budget March 2024 Initiate Bidding April 2024 ward of Construction Contract June 2024 Start Construction (early) July 2024 Start Construction (late) September 2024 Complete Construction September 2027 RECOMMENDATION I recommend that the City enter into the Financial Assistance Award agreement with EDA to secure $7,700,000 in grant funding for the the Bee Branch Stormwater Pumping Station Project. BUDGET IMPACT The total cost to complete construction of the Project is as follows: Engineering $1,380,000 Construction $25,440,000 Construction Contingency $1,272,000 $28,092,000 Using the funding for the project established with the FY23 budget and the EDA grant funding as detailed below means there is a $6,472,591 shortfall [$28,092,000 less $21,619,409] that will have to be addressed and funded with the upcoming FY25 budget. EDA Grant $7,700,000 Flood Mitigation Sales Tax Increment $8,254,445 Storm Utility $1,664,964 DRA Distribution $1,400,000 State Revolving Fund Loan $2,600,000 $21,619,409 4 Therefore, the decision will be how best to fund the remaining $6,472,591 shortfall. One option would be to increasing the amount of the State Revolving Funds (SRF) loan. ACTION TO BE TAKEN I respectfully request adoption of the attached resolution approving the Financial Assistance Award agreement with the U. S. Economic Development Administration and authorizing the City Manager to act as the City's authorized representative to secure $7,700,000 in grant funding for the Bee Branch Stormwater Pumping Station Project (Phase V of the Bee Branch Watershed Flood Mitigation Project). Attach. Prepared by Deron Muehring cc: Crenna Brumwell, City Attorney Jenny Larson, Chief Financial Officer John Klosterman, Public Works Director Arielle Swift, Assistant Public Works Director Teri Goodmann, Director of Strategic Partnerships Deron Muehring, Civil Engineer � Prepared by Deron Muehrinq, City of Dubuque Engineering, 50 W. 13th St. Dubuque, IA 52001 (563)589-4270 Return to Adrienne N. Breitfelder City Clerk City of Dubuque, 50 W. 13th St. Dubuque, IA 52001 (563)589-4100 RESOLUTION NO. 337-23 RESOLUTION APPROVING A US DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION DISASTER RELIEF OPPORTUNITY GRANT FOR THE CONSTRUCTION OF A NEW STORMWATER PUMPING STATION AT THE 16TH STREET DETENTION BASIN WHEREAS the City Council of the City of Dubuque, Iowa wishes to secure funding through the Economic Development Administration (EDA), U. S. Department of Commerce Fiscal Year 2018 Disaster Supplemental grant for the construction of a new stormwater pumping station at the 16th Street Detention Basin, and WHEREAS the City Council, adopted Resolution 260-23 authorizing the submission of a grant application for $7,700,000, and WHEREAS, in support of the application for $7,700,000 in grant funding the City Council pledged the amount of $19,012,000 in local matching funds with $16,412,000 from GO Bonds and $2,600,000 from a State Revolving Fund loan, if in fact, the Disaster Relief Opportunity grant is awarded by the Economic Development Administration, and WHEREAS the City has been awarded $7,700,000 in EDA grant funding EDA has provided a Financial Assistance Award agreement (Agreement) outlining the terms of the City's use of the grant funding, and WHEREAS it is in the City's best interest to enter into the Agreement in order for the City to receive the $7,700,000 in EDA grant funding for the Project. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The Mayor is hereby authorized to sign the Agreement with EDA securing $7,700,000 in Economic Development Administration grant funding for the Bee Branch Stormwater Pumping Station Project. Section 2. Authorizes the City Manager to act as an authorized representative on the City's EDA Fiscal Year 2018 Disaster Supplemental grant and may execute any documents as the Economic Development Administration may reasonably request. Passed, approved, and adopted this 16th day of October, 2023. `Brad M. Ca gh, Mayor Attest: Trish L. Gleason, Assistant City Clerk FORM CD-50 U.S. DEPARTMENT OF COMMERCE (REV.10/18) ✓❑GRANT LICOOPERATIVE AGREEMENT FINANCIAL ASSISTANCE AWARD FEDERAL AWARD ID NUMBER 05-79-06277 URI: 124907 RECIPIENT NAME PERIOD OF PERFORMANCE City of Dubuque September 18, 2023 -March 17,2028 STREET ADDRESS FEDERAL SHARE OF COST 50 W. 13th Street $ 7,700,000 CITY,STATE,ZIP CODE RECIPIENT SHARE OF COST Dubuque, IA 52001 $ 19,012,000 AUTHORITY TOTAL ESTIMATED COST Public Works and Economic Development Act of 1965,as amended(42 U.S.C.§3121 et seq.) $ 26,712,000 CFDA NO.AND NAME 11.307,Economic Adjustment Assistance,2018 Disaster Supplemental and 11.300,Public Works PROJECT TITLE Bee Branch Stormwater Pumping Station This Award Document (Form CD-450) signed by the Grants Officer constitutes an obligation of Federal funding. By signing this Form CD-450, the Recipient agrees to comply with the Award provisions checked below and attached. Upon acceptance by the Recipient, the Form CD-450 must be signed by an authorized representative of the Recipient and returned to the Grants Officer. If not signed and returned without modification by the Recipient within 30 days of receipt, the Grants Officer may unilaterally withdraw this Award offer and de-obligate the funds. ❑DEPARTMENT OF COMMERCE FINANCIAL ASSISTANCE STANDARD TERMS AND CONDITIONS ❑R&DAWARD ❑FEDERAL-WIDE RESEARCH TERMS AND CONDITIONS,AS ADOPTED BY THE DEPT.OF COMMERCE El SPECIFIC AWARD CONDITIONS El LINE ITEM BUDGET IZ 2 CFR PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS, AS ADOPTED PURSUANT TO 2 CFR§1327.101 ❑48 CFR PART 31, CONTRACT COST PRINCIPLES AND PROCEDURES ❑MULTI-YEAR AWARD. PLEASE SEE THE MULTI-YEAR SPECIFIC AWARD CONDITION. OTHER(S): EDA Construction Standard Terms and Conditions -effective March 22, 2021 SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER DATE Angela B. Martinez, Regional Director ANGELA ❑igitalfy signed byANGELA MARTINEZ 09/18/2023 MART I N EZ Date:2023.09.16 13:22:29-06'00' PRINTED NAME,PRINTED TITLE,AND SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL DATE Brad Cavanagh,Mayor The undersigned has fully and completely reviewed this training on behalf of the applicantlawardee, understands the information presented in this training, and has the authority to make this certification as the awardee. The undersigned has also read and understood the Notice of Funding Opportunity, Specific Award Conditions, and Standard Terms and Conditions applicable to this Award. The undersigned understands providing false or misleading information during any part of the proposal, award, or performance phase of an EDA assistance award may result in criminal, civil or administrative sanctions, including but not limited to. fines, restitution, and/or imprisonment under 18 U.S.C. § 1001; treble damages and civil penalties under the False Claims Act, 31 U.S.C. § 3729 et seq.; civil recovery of award funds; suspension and/or debarment from all federal procurement and non - procurement transactions, FAR Part 9.4 or 2 CFR Part 180; and other administrative remedies including Signature Katy Wethal Name City of Dubuque (IA) Entity Name Mayor Pro Tem Position Title termination of active EDA assistance awards. Date Per the training instructions, return signed either to the relevant EDA Project Officer or via the EDGE website, as applicable, within 60 days of grant award. A separate Certification is required for each Authorized Signer on the Award.This Certification must be signed by the same Individual(s) executing the Notice of Award. EDA Award Number 05-79-06277 Certificate Two Fraud Awareness Training EDA’s grantees must successfully complete this training and submit the signed completion certificate(s) to the EDA Project Officer listed in the Specific Award Conditions within 60 days of grant award. Failure to comply with this requirement may result in a finding of non- compliance with the terms and conditions of your award. OVERVIEW •Overview of EDA’s Programs •The Department of Commerce (DOC) Office of Inspector General (OIG) •Fraud in EDA Programs •Additional Items •Certificate 2U.S. Department of Commerce | Office of Inspector General INTRODUCTION Role of EDA: Facilitate the timely and effective delivery of Federal economic development assistance to support long-term community economic recovery planning and project implementation, redevelopment, and resiliency 3U.S. Department of Commerce | Office of Inspector General EDA’s Programs •EDA’s Programs enable EDA to make awards that support a wide range of activities. •Eligible applicants and project types for each program is set forth in the respective Notices of Funding Opportunity. •You must read and understand the requirements applicable to the program under which your award is funded, including the applicable Notice of Funding Opportunity, Specific Award Conditions, and Standard Terms and Conditions. 4 INTRODUCTION U.S. Department of Commerce | Office of Inspector General The U.S. Department of Commerce (DOC) Office of Inspector General (OIG) 5U.S. Department of Commerce | Office of Inspector General DOC – OFFICE OF INSPECTOR GENERAL 6 •Created by IG Act of 1978 to: –Combat fraud, waste, and abuse within the DOC –Conduct audits and investigations of DOC operations –Keep the DOC and Congress informed •Mission –To improve the programs and operations of the Department of Commerce through independent and objective oversight This includes oversight of EDA Assistance Programs U.S. Department of Commerce | Office of Inspector General 7 •Office of Audit and Evaluation •Office of Investigations –Criminal –Civil –Administrative –Employee misconduct –Public corruption DOC – OFFICE OF INSPECTOR GENERAL U.S. Department of Commerce | Office of Inspector General WHISTLEBLOWER PROTECTIONS Federal employees, applicants, and employees of federal contractors and grantees who make certain disclosures―to OIG or elsewhere―are protected under the law from suffering retaliation because of those disclosures. Basic elements of whistleblower protection law: (1) you make a protected disclosure; (2) you are subject to certain retaliatory acts; and (3) there is a causal connection between your protected disclosure and the retaliatory act. OIG receives, reviews, and where appropriate, investigates allegations of whistleblower reprisal. Whistleblower complaints may be submitted to the OIG via the hotline: https://www.oig.doc.gov/Pages/Hotline.aspx#complainthotline Whistleblower complaints may also be submitted to the Office of Special Counsel via their website: https://osc.gov/pages/file-complaint.aspx DOC-OIG Whistleblower Protection Coordinator contact information: Email: wpo@oig.doc.gov Phone: 202-482-1099 8U.S. Department of Commerce | Office of Inspector General FRAUD IN EDA ASSISTANCE PROGRAMS 9 •Fraud Defined •Compliance Requirements –Eligibility –Duplicate Funding –Matching Funds –Mandatory Reporting of Fraud •Consequences of Fraud •Recommendations/Best Practices U.S. Department of Commerce | Office of Inspector General 10 Although it can take many forms, fraud, at its core, is deception through the misrepresentation or omission of material facts for the purpose of illegitimate gain. FRAUD IN EDA ASSISTANCE PROGRAMS U.S. Department of Commerce | Office of Inspector General 11 Examples of fraud within EDA Assistance Programs include, but are not limited to: •Accepting federal funding in multiple assistance awards for the same work •Misrepresentations regarding the eligibility of the project or recipient •Misrepresentations or omissions about the recipient’s facilities, ownership/control, or the work to be performed by the recipient •Providing falsified letters of support •Misrepresentations concerning the use of funds expended, work performed, results achieved, or compliance with program requirements under the award •Inflated labor costs FRAUD IN EDA ASSISTANCE PROGRAMS U.S. Department of Commerce | Office of Inspector General 12 •Misuse or conversion of assistance award funds (e.g. using funds for personal expenses) •Theft of government owned property (18 U.S.C.§666) •Embezzlement (18 U.S.C.§666) •Fabrication or falsification of data, in applying for, carrying out, or reporting results from an assistance award •Intentional noncompliance with applicable federal cost principles governing grants / cooperative agreements •Undisclosed self-dealing, such as a sub-award to an entity in which an awardee, executive, or key employee (or family members of the aforementioned individuals) has a financial interest •“Buying Expenses”, or reporting expenses incurred by another entity for work unrelated to the assistance award FRAUD IN EDA ASSISTANCE PROGRAMS (CONTINUED) U.S. Department of Commerce | Office of Inspector General COMPLIANCE REQUIREMENTS 13 RECIPIENTS MUST COMPLY WITH: •2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards •Department of Commerce Financial Assistance Standard Terms and Conditions •EDA Standard Award Conditions for Construction Projects or EDA Revolving Loan Fund Standard Award Conditions (as applicable) •Specific Award Conditions (unique to each award) U.S. Department of Commerce | Office of Inspector General COMPLIANCE REQUIREMENTS 14 2 CFR§200.339 – REMEDIES FOR NONCOMPLIANCE If a non-Federal entity fails to comply with the U.S. Constitution, Federal statutes, regulations or the terms and conditions of a Federal award , the Federal awarding agency or pass-through entity may impose additional conditions; or, in certain circumstances, the Federal awarding agency or pass-through entity may take one or more of the following actions, as appropriate in the circumstances: •Temporary withholding of cash payments pending correction of the deficiency by the non- Federal entity or more severe enforcement action by the Federal awarding agency or pass- through entity •Disallowance of (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance •Whole or partial suspension or termination of the Federal award •Initiation of suspension or debarment proceedings (or in the case of a pass-through entity, recommend such a proceeding be initiated by a Federal awarding agency) •Withholding of further Federal awards for the project or program •Other remedies that may be legally available U.S. Department of Commerce | Office of Inspector General COMPLIANCE REQUIREMENTS 15 Eligibility Within their EDA Assistance Award Proposal, applicants make numerous certifications or recertifications as to their eligibility to receive a federal award, among other certifications. U.S. Department of Commerce | Office of Inspector General Falsely certifying to any material fact or representation contained in a certification is fraud. 16 Eligibility Allegations Included: •Nonprofit organization made false and misleading statements to obtain federal grant funding •Failure to disclose conflicts of interest that were required to be disclosed Outcome: •Nonprofit agreed to pay $528,575.82 to resolve allegations they violated the False Claims Act CASE EXAMPLE U.S. Department of Commerce | Office of Inspector General Double-click below for more information 17 Duplication of Benefits is Prohibited 2 CFR§200.1 – Improper Payment Improper payment means any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. This includes overpayments or underpayments to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for an incorrect amount, and duplicate payments). It also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods or services not received (except for such payments authorized by law). Other Federal Awards with Similar Programmatic Activities “The recipient must immediately provide written notification to the DOC Program Officer and the DOC Grants Officer if, subsequent to receipt of the DOC Award, other financial assistance is received to support or fund any portion of the scope of work incorporated into the DOC Award. DOC will not pay for costs that are funded by other sources.” EDA Standard Terms and Conditions for Construction Projects, March 22, 2021 COMPLIANCE REQUIREMENTS U.S. Department of Commerce | Office of Inspector General 18 Duplication of Benefits Allegations Included: •Not-for-profit owner applied for funding for similar services •Owner converted the duplicate funding for his personal and business use Outcome: •Owner pleaded guilty to mail fraud and money laundering •Sentenced to 24 months in prison •Ordered to pay $480,901 in restitution CASE EXAMPLE U.S. Department of Commerce | Office of Inspector General Double-click below for more information 19 Matching Funds •The non-Federal share of the approved project budget (aka the “matching share” or “local share”) must be borne by the recipient or provided to the recipient by a third party as a contribution for the purposes of and subject to the terms of the award. •The applicant must document that the matching share will: •Be committed to the project for the period of performance •Be available as needed •Not be conditioned or encumbered in any way that may preclude its use consistent with the requirements of EDA investment assistance •Applicants must submit, for each source of matching share, a commitment letter or equivalent document signed by an authorized representative of the organization providing the matching funds. Additional documentation may be requested by EDA in order to substantiate the availability of the matching funds. COMPLIANCE REQUIREMENTS U.S. Department of Commerce | Office of Inspector General 20 Matching Funds Allegations Included: •Small business owner made several false statements and misrepresentations to obtain federal grant funding •Owner misrepresented that he obtained a $100,000 investment from a third party in order to qualify for federal matching funds •Owner converted grant funds to personal use Outcome: •Owner convicted at trial for wire fraud, mail fraud, falsification of records, and theft of government property •Sentenced to 36 months in prison •Ordered to pay $105,726 in restitution •Owner debarred for 5 years CASE EXAMPLE U.S. Department of Commerce | Office of Inspector General Double-click below for more information 21 Mandatory Disclosure of Fraud 2 CFR§200.113 - Mandatory disclosures The non-Federal entity or applicant for a Federal award must disclose, in a timely manner, in writing to the Federal awarding agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. Failure to disclose could result in the remedies detailed in 2 CFR§200.339 (slide 16 of this presentation). COMPLIANCE REQUIREMENTS U.S. Department of Commerce | Office of Inspector General CONSEQUENCES OF COMMITTING FRAUD 22 Criminal Prosecution Lying to obtain a grant, or lying about the work performed may violate several criminal laws: •18 U.S.C. §1001, False Statements (up to 5 years in prison, forfeiture and $250K fine) •18 U.S.C. §641, Theft of Federal Property (up to 10 years in prison, forfeiture and $250K fine) •18 U.S.C. §1343, Wire Fraud (up to 20 years in prison, forfeiture and $250K fine) •18 U.S.C. §666, Theft or bribery concerning programs receiving Federal funds (up to 10 years in prison, forfeiture and $250K fine) Fines for organizations may be as high as $500K Criminal forfeiture = full amount of the grant; personal assets can be seized to satisfy forfeiture or fine U.S. Department of Commerce | Office of Inspector General 23 Civil Prosecution In addition to or in lieu of criminal prosecution Civil False Claims Act, 31 U.S.C.§§3729-3733 •Liability includes up to treble damages (3x actual damages) and a civil penalty of up to $23,607 for each false claim •False claims liability may include payments received when the government relied upon false information in the award proposal, in a certification of current cost or pricing data, in a request for payment, or in progress reports •Although the statute requires knowledge that the claim was false, knowledge includes “deliberate ignorance” or “reckless disregard of the truth” •Whistleblowers can receive up to 30% of the recovery amount for reporting fraud via qui tam provisions of the False Claims Act CONSEQUENCES OF COMMITTING FRAUD (CONTINUED) U.S. Department of Commerce | Office of Inspector General 24 Administrative Remedies •Government can terminate contracts/grants tainted by fraud •Government can suspend/debar the entity, owner, and/or employees •Results in prohibition from receiving any federal grants or contracts, or working as a sub-grantee on federal grants or a sub-contractor on federal contracts •Debarment is typically for three years, but can be for a longer period •Administrative remedies are in addition to or in lieu of criminal and civil liability CONSEQUENCES OF COMMITTING FRAUD (CONTINUED) U.S. Department of Commerce | Office of Inspector General RECOMMENDATIONS 25 The government retains the right to examine the status of an EDA Assistance award at any time. Status checks include: •Site visits •Requests for records including financial documents and timesheets Good recordkeeping will help ensure successful status checks and eliminate potential issues. U.S. Department of Commerce | Office of Inspector General 26 Good Records: Key to Protecting Yourself Documentation •Timesheets for hours worked by ALL involved employees •All financial receipts, invoices and statements for expenses related to the project Updates on the project status, including successes/failures •Keep regular records at the business-level so you have all facts on hand if needed/requested by the government •Documentation to support performance metrics Records Retention Time Frames and other Requirements •See 2 CFR§200.334 RECOMMENDATIONS U.S. Department of Commerce | Office of Inspector General IMPORTANT TO REMEMBER! 27 U.S. Department of Commerce | Office of Inspector General Record Retention and Access § 200.334 Retention requirements for records. Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass -through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. The only exceptions are the following: (a) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken. (b) When the non-Federal entity is notified in writing by the Federal awarding agency, cognizant agency for audit, oversight agency for audit, cognizant agency for indirect costs, or pass-through entity to extend the retention period. (c) Records for real property and equipment acquired with Federal funds must be retained for 3 years after final disposition. (d) When records are transferred to or maintained by the Federal awarding agency or pass-through entity, the 3-year retention requirement is not applicable to the non-Federal entity. (e) Records for program income transactions after the period of performance. In some cases recipients must report program inc ome after the period of performance. Where there is such a requirement, the retention period for the records pertaining to the earning of the program income starts from the end of the non-Federal entity's fiscal year in which the program income is earned. (f) Indirect cost rate proposals and cost allocations plans. This paragraph applies to the following types of documents and t heir supporting records: Indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates). (1) If submitted for negotiation. If the proposal, plan, or other computation is required to be submitted to the Federal Government (or to the pass-through entity) to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts from the date of such submission. (2) If not submitted for negotiation. If the proposal, plan, or other computation is not required to be submitted to the Federal Government (or to the pass- through entity) for negotiation purposes, then the 3-year retention period for the proposal, plan, or computation and its supporting records starts from the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation. IMPORTANT TO REMEMBER! 28 If you are unsure about any of the requirements relating to the award of an EDA Assistance grant/cooperative agreement: •Contact the appropriate EDA POC and provide all relevant facts •Request written guidance from the EDA POC, and •Follow it! U.S. Department of Commerce | Office of Inspector General ADDITIONAL RESOURCES 29 13 CFR Chapter III – Economic Development Administration (Parts 300-315) https://www.ecfr.gov/current/title-13/chapter-III 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II Grant Fraud & Scams – Grants.gov https://www.grants.gov/learn-grants/grant-fraud.html Department of Commerce – Grants and Cooperative Agreement Manual https://www.commerce.gov/oam/files/grants-and-cooperative-agreements-grants-manual- april-20-2021 U.S. Department of Commerce | Office of Inspector General REPORT FRAUD, WASTE, AND ABUSE 30U.S. Department of Commerce | Office of Inspector General U.S. Department of Commerce Office of Inspector General Office of Investigations OIG HOTLINE Phone: (800) 424-5197 Online Complaint Form: https://www.oig.doc.gov/Pages/Hotline.aspx#com plainthotline For more information please visit our website www.oig.doc.gov •All EDA grantees must successfully complete this training and submit the signed completion certificate(s) to the EDA Project Officer listed in the Specific Award Conditions or via the EDGE website within 60 days of grant award. Failure to comply with this requirement may result in a finding of non- compliance with the terms and conditions of your award. U.S. Department of Commerce | Office of Inspector General 31 CERTIFICATE OF TRAINING COMPLETION CERTIFICATE OF TRAINING COMPLETION 32 The undersigned has fully and completely reviewed this training on behalf of the applicant/awardee, understands the information presented in this training, and has the authority to make this certification as the awardee. The undersigned has also read and understood the Notice of Funding Opportunity, Specific Award Conditions, and Standard Terms and Conditions applicable to this Award. The undersigned understands providing false or misleading information during any part of the proposal, award, or performance phase of an EDA assistance award may result in criminal, civil or administrative sanctions, including but not limited to: fines, restitution, and/or imprisonment under 18 U.S.C. §1001; treble damages and civil penalties under the False Claims Act, 31 U.S.C. §3729 et seq.; civil recovery of award funds; suspension and/or debarment from all federal procurement and non- procurement transactions, FAR Part 9.4 or 2 CFR Part 180; and other administrative remedies including termination of active EDA assistance awards. ________________________ _______________ Signature Date ________________________ Per the training instructions, return signed either to the Name relevant EDA Project Officer or via the EDGE website, as applicable, within 60 days of grant award. A separate ________________________ Certification is required for each Authorized Signer on the Entity Name Award. This Certification must be signed by the same Individual(s) executing the Notice of Award. ________________________ Position Title EDA Award Number 05-79-06277 Certificate One U.S. Department of Commerce | Office of Inspector General CERTIFICATE OF TRAINING COMPLETION 33 The undersigned has fully and completely reviewed this training on behalf of the applicant/awardee, understands the information presented in this training, and has the authority to make this certification as the awardee. The undersigned has also read and understood the Notice of Funding Opportunity, Specific Award Conditions, and Standard Terms and Conditions applicable to this Award. The undersigned understands providing false or misleading information during any part of the proposal, award, or performance phase of an EDA assistance award may result in criminal, civil or administrative sanctions, including but not limited to: fines, restitution, and/or imprisonment under 18 U.S.C. §1001; treble damages and civil penalties under the False Claims Act, 31 U.S.C. §3729 et seq.; civil recovery of award funds; suspension and/or debarment from all federal procurement and non- procurement transactions, FAR Part 9.4 or 2 CFR Part 180; and other administrative remedies including termination of active EDA assistance awards. ________________________ _______________ Signature Date ________________________ Per the training instructions, return signed either to the Name relevant EDA Project Officer or via the EDGE website, as applicable, within 60 days of grant award. A separate ________________________ Certification is required for each Authorized Signer on the Entity Name Award. This Certification must be signed by the same Individual(s) executing the Notice of Award. ________________________ Position Title EDA Award Number 05-79-06277 Certificate Two U.S. Department of Commerce | Office of Inspector General CERTIFICATE OF TRAINING COMPLETION 34 The undersigned has fully and completely reviewed this training on behalf of the applicant/awardee, understands the information presented in this training, and has the authority to make this certification as the awardee. The undersigned has also read and understood the Notice of Funding Opportunity, Specific Award Conditions, and Standard Terms and Conditions applicable to this Award. The undersigned understands providing false or misleading information during any part of the proposal, award, or performance phase of an EDA assistance award may result in criminal, civil or administrative sanctions, including but not limited to: fines, restitution, and/or imprisonment under 18 U.S.C. §1001; treble damages and civil penalties under the False Claims Act, 31 U.S.C. §3729 et seq.; civil recovery of award funds; suspension and/or debarment from all federal procurement and non- procurement transactions, FAR Part 9.4 or 2 CFR Part 180; and other administrative remedies including termination of active EDA assistance awards. ________________________ _______________ Signature Date ________________________ Per the training instructions, return signed either to the Name relevant EDA Project Officer or via the EDGE website, as applicable, within 60 days of grant award. A separate ________________________ Certification is required for each Authorized Signer on the Entity Name Award. This Certification must be signed by the same Individual(s) executing the Notice of Award. ________________________ Position Title EDA Award Number 05-79-06277 Certificate Three U.S. Department of Commerce | Office of Inspector General