The purpose of this section of the manual is to define various administrative functions and activities of local CAA’s and KACA in the operation of the Low-Income Home Energy Assistance Program and to provide the forms and instructions used in complying with the required procedures.

The energy assistance program has been administered by Community Action Agencies since 1986. KACA is responsible for contacting the Public Service Commission, state legislators, KACo., and Kentucky’s Congressional delegation to advise them of program changes. Local agencies will follow up with local officials and utilities to advise them of program changes BEFORE consumers contact them.

Each agency is responsible for assuring that financial management systems are in place and developed in accordance with federal standards and circulars (A-122, A-110, A-87, 45 CHR 92) as appropriate. Additional requirements made as a part of these procedures will be added to the existing requirements as a part of the LIHEAP Management system, only. Every effort has been made to develop procedures that only add to the existing federal standards; however, if any agency discovers that the procedures required by this manual are in conflict with the federal standards, contact the KACA office. KACA will then determine the appropriate action and make the needed changes for all agencies.

Each agency is responsible for assuring that all LIHEAP administrative activities are correctly charged to the program or paid with non-federal funds. The local CAA will be responsible for maintaining appropriate records to support compliance with this requirement. There are only two cost categories for the program--benefits and administrative. Benefits are those charges for the purchase of utility service, fuel, blankets, sleeping bags, temporary shelter, or other benefits for eligible households. Space heaters that are purchased and loaned to eligible households are also allowable charges to benefits. Agencies may request that up to 5% of the Crisis benefit allocation be used for budget counseling. This must be requested and approved in writing prior to the first day of November. Any agency that would like to provide counseling must submit a plan for tracking the consumers assisted, the cost for providing this benefit, and the method to be used to quantify the results of the budget counseling service. All other program activities are administrative.

KACA will develop the subcontract agreement between KACA and the local CAA’s. KACA will submit the subcontract agreement to the Department for Community Based Services (DCBS) for their review and sanction, prior to any agreement being initiated between KACA and CAA’s. The development process will include a review of the requirements as stipulated in the contract between the Department for Community Based Services and KACA.

The subcontract agreements will be effective the first day of September through the last day of June (unless emergency funds are authorized). Both the original subcontract agreement and amendments will be presented to the signatory authority for both parties for final approval. Amendments to the subcontract agreements will be made after the close of the Subsidy component to reflect actual cost incurred for benefits and to establish the maximum benefit levels for the Crisis component. At the time the final determination has been made that an agency has under spent administrative funds, a final amendment may be made to shift unused administrative funds to agencies that may be in need of these funds.

Agencies will report actual benefits and administrative obligations through May 30, and estimated administrative obligations through June 30, with the Final LIHEAP Invoice due according to the LIHEAP invoicing schedule in the appendix. KACA will accept requests for reimbursements only on the appropriate billing form (Form HM-2) and signed by the appropriate signatory authority for each agency, attesting to the accuracy and validity of the expenses reported and assuring that the expenses are not duplicative of expenses reported to other funding sources. Upon submission to KACA, each HM-2 will be reviewed, designated with an internal labeling procedure and compiled with other local agency billing reports for invoicing to the Cabinet. KACA will submit an invoice to DCBS at two-week intervals according to the schedule. Invoices should also be submitted to KACA according to the schedule. Reimbursements to the local agencies are made the same day that reimbursement is received from the Cabinet. However, KACA will be allowed up to three (3) working days after the receipt of the payment from the Cabinet to make the reimbursements to local agencies. CAAs will be allowed up to 3 days after receipt of payment to make appropriate payments to vendors. Reimbursements will be made based on the LIHEAP INVOICE (Form HM-2). A FINANCIAL RECONCILIATION REPORT will be due by June 1.

KACA shall reconcile the LIHEAP Invoice (Form HM-2) and the LIHEAP Batch Tickets (Form HM-4) at the end of the Subsidy component. Any necessary adjustments of payment will be made in the first payment of the Crisis component.

Subcontract agreements will not be considered finally closed prior to the submission of a cumulative report of consumers served and cost incurred (Final Report, HM-3). Each subcontract agreement will be closed out as promptly as feasible after the expiration date of the agreement. The final report (Form HM-3) for closeout will be due to the KACA within 15 days of the expiration of the agreement, July 15. The report requires that agencies report cumulative benefits obligated by component, the total funds received from KACA, and any differences between the obligations and receipts.

In closing the agreement, the following will be observed:

• upon request, KACA shall promptly pay the Subcontractor for any allowable reimbursable cost not covered by previous payment, contingent upon funds received by the KACA and the RECONCILIATION OF PREVIOUS PAYMENTS TO THE SUBCONTRACTOR;

• upon notification from KACA, the Subcontractor shall refund any unobligated funds

• the Subcontractor shall submit such reports as required by KACA. KACA may extend the date for any report upon receiving justified request from the Subcontractor and may waive any report that is not needed; and

• the closeout of the agreement does not affect the retention period for the program records.

It is understood the agreement will be closed prior to an audit, and that KACA reserves the right to disallow and recover an appropriate amount, after fully considering any recommended disallowance resulting from an audit.

The closeout does not affect the Subcontractor’s responsibility with respect to any program income for which the Subcontractor is still accountable.

For contracting purposes, KACA will allocate Subsidy funds based on each agency’s share of the previous year’s Subsidy program.

Crisis and Emergency benefit funds will be allocated, except for $400,000, which shall be retained for the contingency allocation of the Crisis program, based upon each agency’s percentage of the statewide eligible population at or below 100% of the poverty level. Should additional federal funds become available after the Crisis program begins, those funds shall go into the contingency fund. Contingency funds will be allocated on a first-come, first-served basis. A completed Contingency Fund Request Form is required to be submitted to KACA. KACA will attempt to use the contingency funds to keep all agencies open in the Crisis component as long as possible.

Administrative funds will be allocated as a percent of benefits. KACA will retain for a maximum of 10% of administrative dollars available by contract with the Cabinet, if funding is available. The maximum administrative rate for local agency, as detailed as a line item in the current contract, is 8.95% of benefits, if funding is available. Should additional administrative funds become available, the rate will be adjusted upward. At the discretion of KACA, an agency may hold a portion of its administrative funds until the final closeout of the Subsidy component to assure that contract funds are available to cover program obligations. Any administrative funds that were allocated to an agency, but not used by the agency will be made available to any other agency that exceeded the allowable administrative rate under the subcontract agreement on a first-come, first-served basis.

Subcontract agreements will be amended prior to June 30 to reflect any increase or decrease.

Paper Applications: Each agency will be required to batch and submit applications during the LIHEAP program. A batch ticket (Form HM-4) is required with each batch of applications submitted to KACA. Each batch will be by the calendar week, utilizing date of application, and the batch ticket with all applications will be due to KACA within 7 days of each Friday. Applications should also be separated by the month. Each batch should be properly coded and sent from the agency’s central location. Subsidy and Crisis applications should be batched separately. Approved and denied applications should be batched separately. KACA will log the batch tickets received each day. Each batch ticket should be dated, assigned the appropriate (batch) number, and signed by the appropriate staff person. The system for numbering each batch will be to first assign the agency number (see appendix for an Agency code listing) and then a sequential number for each batch ticket. Thus, the first batch of applications for Audubon Area Community Services will be numbered #01-1 and the tenth batch submitted will be #01-10. (See appendix for batching schedule.)

Computerized Applications: Agencies that are submitting applications on data disks should include a batch ticket with the MONTHLY data disk. Agencies utilizing computerized applications may also choose to electronically transfer directly via modem or the Internet. All computerized applications for the preceding month must be available to KACA by the 10^th of the following month.

The audit specifications for the LIHEAP subcontract agreements will be attached to the subcontract agreements and duplicated as an attachment to this procedural manual.

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KACA shall maintain an in-house audit tracking system. Draft audits are received from local agencies and reviewed for consistency with closeout reports. Any discrepancies or problems identified by this review are addressed to the local CAA and reported to the Cabinet, with resolution attempted before the final audit report. The resolution of any discrepancies between the KACA figures and the draft audit figures will be initiated while the audit is in draft form. A report of the audited figures and/or explanation of differences noted are mailed to the Cabinet. A desk review of each draft audit will be performed prior to the report to the Cabinet to determine compliance with audit standards and schedules contained in the Subcontract Agreement and relevant OMB Circulars.

Final audits are received from local agencies, reviewed, and filed. KACA will initiate resolution procedures as soon as each final audit is received.

The LIHEAP schedules from the single agency audit for each agency will be submitted to KACA within 7 months of the end of the subcontract agreement, January 31. Final Agency audits will be submitted within 9 months of the end of the subcontract agreement, March 31. The appropriate share of the audit cost will be charged to the administrative account for the contract period in which the audit is performed. No more than 50% of the reimbursement for local CAA audit cost will be paid prior to the approval of the agency’s final audit.

KACA reserves the right to require additional information, including audit work papers during the KACA single agency audit. Any discrepancies determined in the process of this audit will be communicated to the local agency involved and reconciliation of any differences in the audit findings of the local agency and KACA will be performed by the appropriate audit firms.

The cost of administering the LIHEAP program is to be paid from the administrative funds allowed in the Subcontract Agreement or from non-federal and/or local funds. CSBG funds CANNOT BE USED TO PAY FOR LIHEAP ADMINISTRATIVE COST. The policy established in December of 1985 is as follows:

All information and referral time or activities such as staffing the office to accommodate walk-in and telephone calls should be considered part of the normal outreach or I&R activities and would not be appropriate for charging to the LIHEAP program.

Each agency will be required to appropriately charge and document, through time sheets, the worker’s time during the program.

Agencies may request program waivers. All requests must be made in writing and submitted to KACA prior to the beginning of the program component for which the waiver is requested. Any approved waiver will be valid for one program year, unless the approval letter specifies another time frame.

With the exception of the application, agencies may modify and/or add forms to the program. Copies of these forms must be submitted to KACA prior to the program component for which they will be utilized. Agencies utilizing computerized applications may make modifications as needed as long as all required information is presented in a "readable" form on the data disk or download.

Agency Board of Directors must review and approve written procedures and processes developed by the agency for the procurement of goods and services related to LIHEAP activities prior to the beginning of the program year, November. "The "Board Statement of Vendor Selection Approval" form must be signed and retained with the agencies program records.

All Board Members, Agency Executive Staff, and all employees working with the LIHEAP program must complete a "Vendor Disclosure Statement" prior to the solicitation of any vendor for the program.

All job openings created, as a result of the program must be listed with the Employment Services.

Each agency will have the following written procedures either in the agency Personnel Policy Manual or agency Procedural Manual:

1. Procedures to address consumer complaints and provide for hearings,
2. Confidentiality Policy,
3. Vendor Selection Procedures,
4. Policy consistent with KRS 45A.340, Conflicts of Interest of Public Officers and Employees,
5. Policy consistent with KRS 45A.355, Gratuities and Kickbacks – Use of Confidential Information,
6. Policy regarding lobbying activities to ensure compliance with section 1352, Title 31, US Code,
7. Consumer Fraud and Abuse Policy.

Each agency will be monitored by KACA a minimum of one time during the programs operations. It is the agency’s responsibility to assure that all information is available for KACA’s review. Agencies will be notified at least three weeks in advance of the monitoring visit and will receive a written monitoring tool at the beginning of the program year. Monitoring reports will be returned to the agencies within four weeks of completion of the monitoring visit.

As some agencies may be monitored during the Subsidy Component of the program, additional follow-up may be required. Corrective Action Plans must be submitted to KACA within four weeks of receipt of any monitoring tool indicating an area is out of compliance with the subcontract. It is the agencies’ responsibility to assure that all information needed for the final monitoring review, final report, is available to KACA.

Monitoring is viewed as a "learning tool " to benefit the agency and KACA.

adequately addressed by these guidelines, the Cabinet will provide written directives as supplements.