CITY OF MOORE, OKLAHOMALocal Government

Program: Community Development Block Grant ? Disaster Recovery CFDA No.: 14.269 Federal Agency: U.S. Department of Housing and Urban Development Federal Award Identification Number: B-13-MS-40-0001 Award Period: May 14, 2014 to September 30, 2022 Compliance Requirement: Monitoring CDBG Program Activities for Compliance with Program Rules & Regulations The City underwent a monitoring review by the grantor in March 2020 related to expenditures for the CDBG-DR Program, the results of which were issued in June 2020. The monitoring review results included seven findings pertaining to the CDBG-DR Program listed as: Finding 1: The documentation for the contractor selection process in a ?round robin basis? was insufficient to show compliance with procurement requirements. Finding 2: City of Moore CDBG-DR contract was missing from the disaster recovery website. Finding 3: A vendor contract did not contain 2 CFR 200 Appendix II Contract Provisions. Finding 4: The City of Moore reimbursed the City of Oklahoma City for professional service fees that were not contained in the Inter-local Agreement between the two cities. Finding 5: The decision-making process described in 24 CFR 55 was not completed for five (5) infrastructure projects. Finding 6: Screening for potential hazardous materials, contamination, and toxin chemicals was not done or included an insufficient review. Finding 7: Failure to evaluate endangered species for one project. Condition Found: Finding 1: On two contracts the activity files do not contain documentation the selection process promoted fair and reasonable competition. Finding 2: The City?s disaster recovery website does not include of all the contracts the Grantee has procured with CDGB-DR funds. Finding 3: A contract failed to address certain termination for cause language as required by 2 CFR 200, Appendix II. Finding 4: The City of Moore reimbursed the City of Oklahoma City for professional service fees over and above what was written in the Inter-local Agreement between the two cities. Finding 5: The City did not complete the required documentation for the decision-making process described in 24 CFR 55. Finding 6: Site contamination was not properly researched for four projects. Finding 7: Impact on endangered species was not evaluated for two projects. Criteria: Finding 1: 2 CFR 200.319 ? Competition states: All procurement transactions will be conducted in a manner providing full and open competition. Finding 2: The City is required to place on the disaster recovery website a copy of contracts the Grantee has procured. Finding 3: 24 CFR 570.502, Uniform Administrative Requirements for Entitlements and March 5, 2013, Federal Register Notice ? P.L. 113-2 Additional requirements related to procurement. Finding 4: 2 CFR 200.249(b)(8) provides for regulations on contractual agreements for services. Finding 5: 24 CFR 55 and 24 CFR 58.5(b) and 78 FR 14332 require compliance with an eight decision-making process prior to signing and submitting the request for release of funds and certification to the State. Finding 6: 24 CFR 58.5(i)(2)(i) and 78 FR 14332 requires the City to ensure that all properties that are being proposed for use in HUD programs be free of hazardous materials and contamination. Finding 7: 24 CFR 58.5? and 78 FR 14332 require the City to comply with the Endangered Species Act of 1973 to ensure the project has no adverse impacts to endangered species. Cause: Finding 1: The processes and procedures were insufficient to ensure fair and open competition. Finding 2: With limited staff resources dedicated to multiple CDBG-DR related tasks and several changes in personnel, the requirement to make all contract information available was missed or not implemented. Finding 3: The City did not understand that the identified contract provisions should be included in all CDBG-DR contracts. Finding 4: The City of Moore did not include the full rate of compensation for which the City of Oklahoma City may be reimbursed in its Inter-local Agreement. Finding 5: The City did not follow the decision-making process described in 24 CFR 55 due to an incomplete understanding of the regulations at 24 CFR 55. Finding 6: The City staff did not understand what the requirements or available sources were for assessing site contamination. Finding 7: The City staff incorrectly applied a ?no effect? determination based on the activity type and, therefore, did not fully evaluate impacts to endangered species. Effect: Finding 1: HUD cannot determine if the City is promoting fair and reasonable competition or that contractors are being selected through a non-arbitrary process. Finding 2: The City has not met all public website requirements for information made available to the public. Finding 3: Lack of applicable contract provisions may not provide adequate protection of federal funds used to meet the City?s disaster recover needs. Finding 4: The City of Moore has reimbursed the City of Oklahoma City costs that are not documented in the Inter-local Agreement. Finding 5: Without performing the eight decision-making process, the City could fail to accurately assess all direct and indirect impacts, alternatives and mitigation measures and the improper documentation leaves the environmental review records deficient. Finding 6: Improper and incomplete evaluation of potential contamination could leave construction crews vulnerable to unsafe working conditions and could expose the public to potentially dangerous conditions. Finding 7: Improper and incomplete evaluation of endangered species could have an adverse impact on endangered species leaving the City open to litigation and potential fines. Recommendation: Overall, the City should respond and address the recommendations as stated in HUD?s monitoring visit letter in a timely manner. Below are HUD?s recommendations: Finding 1: Within 30 days of the HUD report, the City is requested to: 1) Provide HUD with a copy of the revised policies and procedures detailing the two-tier selection process; 2) Provide HUD with a copy of the revised policies to demonstrate that the activity files have been updated. Finding 2: Within 30 days of the HUD report, the City is requested to: 1) Place the relevant documents on the disaster website; 2) Update staff?s policies and procedures. Finding 3: Within 30 days of the HUD report, the City is requested to: 1) Provide HUD with a list of all active contracts and a letter/opinion from the city attorney documenting that the contracts have been reviewed and are in compliance with Federal, State and Local rules; 2) Revise the procedures to require a checklist be placed into each of the activity files to verify the contract has been reviewed; 3) Update the required policies and procedures and provide HUD with a copy. Finding 4: Within 30 days of the HUD report, the City is requested to an add an addendum to its Inter-local contract that includes the professional services fees that the City of Oklahoma City was entitled to for the implementation of the Housing Rehabilitation Program and provide a copy to HUD. Finding 5: Within 60 days of the HUD report, the City is requested to: 1) Provide a completed eight decision-making process for all projects that were in the floodplain and to fully evaluate and document all potential direct/indirect impacts, alternatives, and mitigation measures that should be incorporated into the project; 2) The staff responsible for environmental reviews should attend in person training. Finding 6: Within 60 days of the HUD report, the City is requested to: 1) Provide a thorough review of the projects included in the report and submit a copy to HUD; 2) The staff responsible for environmental reviews should attend in person training. Finding 7: Within 60 days of the HUD report, the City is requested to: 1) Provide a thorough review of the endangered species for the questioned projects and submit to HUD; 2) The staff responsible for environmental reviews should attend in person training. View of Responsible Officials: Management agrees with the findings addressed in the HUD report. Corrective Action Taken: Refer to City?s Corrective Action Plan.

Finding 2019-001 Program: Community Development Block Grant ? Disaster Recovery CFDA No.: 14.269 Federal Agency: U.S. Department of Housing and Urban Development Award Period: May 14, 2014 to September 30, 2022 Compliance Requirement: Activities Allowed or Unallowed Criteria: 24 CFR 570.205(a) states that eligible planning activities are ?Planning activities which consists of all costs of data gathering, studies, analysis, and preparation of plans and the identification of actions that will implement such plans. Condition Found: HUD?s monitoring report dated August 2, 2019 found that the City of Moore was unable to demonstrate that the purchase and update of the GIS was an eligible activity under the grant. The report found the $589,350 of expense was not currently chargeable to the City of Moore?s CDBG-DR grant number B-13-MS-40-0001. Cause: The HUD report acknowledges that there was a misunderstanding of the regulations regarding the eligibility, reasonableness and allocability of the GIS expenditures to the CDBG-Dr grant. The HUD report determined the justification submitted by the City for the GIS server and update does not support the allocation of any costs to the grant because it is not an eligible planning activity. Effect or Potential Effect: The HUD report determined the City of Moore cannot charge the costs associated with the GIS server and system update to the CDBG-DR grant. Corrective Action: To address the deficiency, HUD has requested the City to identify an eligible activity under the CDBG-DR program under which the GIS server purchase and system update can be charged to or repay the CDBG-DR program $88,350 for the GIS server and $501,000 for the GIS system update. View of Responsible Officials and Planned Corrective Action: Management of the City of Moore is in the process of reviewing the finding from HUD and will be submitting a waiver request to allow the expense to be eligible as a resiliency activity.