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Section 5: Resolution of Findings

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Introduction

During the course of a project, circumstances may arise that accelerate project activities, delay the project, or are otherwise outside of the scope of the project. According to the Common Rule, Texas’ Uniform Grant Management Standards, and Article 7 of the Grant Agreement Terms and Conditions, the subgrantee must inform the grantor (The Texas Department of Transportation [TxDOT]) of any events that may have “significant impact upon grant or subgrant activity” as soon as these become known. These conditions are defined under “ Frequency” in Chapter 5, Section 2 of this manual.

Notification and resolution of adverse or favorable conditions, as appropriate, between a subgrantee and TxDOT, or TxDOT and the federal grantor agency (National Highway Traffic Safety Administration [NHTSA]), are described below.

An incomplete or incorrect Performance Report or Request for Reimbursement (RFR) should be immediately returned to the project director for correction. Appropriate documentation of the nature of the problem should be included in the transmittal. Project and program managers can send an RFR or Performance Report back to the subgrantee for corrections by changing the status of electronically submitted performance reports and/or RFRs through the Traffic Safety Electronic Grants Management System (eGrants) to “Modifications in Progress”. While in “Modifications in Progress”, the subgrantee will be allowed to make the necessary corrections and then resubmit the documents for project manager review.

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First-line Resolution - Minor Findings

The TxDOT project or program manager notifies the subgrantee’s project director in writing upon any initial indication of minor discrepancies or errors in reporting, project implementation, or accounting. Examples of minor discrepancies include:

  • delays in activities that will not adversely affect the timely completion of the project
  • the omission of secondary performance data.

A notification of any finding must include the following information:

  • a detailed description of the finding
  • a description of any actions or options the subgrantee may make in response to the finding
  • a date by which the subgrantee should have implemented the recommended action or advised the project or program manager of a proposed alternative, or both (under most circumstances, this date should be no more than 30 days after written notification by the project or program manager).

Copies of this correspondence, including copies of e-mail exchanges, should be included in the eGrants file of record via the creation and completion of an On-Going Monitoring Report. See Section 2 of this chapter for more details on completing an On-Going Monitoring Report through eGrants.

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Resolution of Minor Findings: Options

Minor findings should be corrected before they become major problems. The following table shows examples of ways in which a project or program manager may resolve minor findings. Left undetected or unresolved, minor discrepancies may become major problems.

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Finding

Resolution

Unapproved or ineligible cost in the RFR

Return report to subgrantee and ensure correction in subsequent RFR.

Delay in reporting

Provide written reminder of due dates; provide assistance.

Data omitted from reports

Return report to subgrantee and provide written reminder and explanation of purpose of data.

Delay in activity

Discuss delay with subgrantee’s project director; ensure the action plan is current, if applicable.



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Second-line Resolution - More Serious Error or Discrepancy

Upon a repeated incidence of a finding or a more serious error or discrepancy, the project or program manager must provide a notice in writing to the subgrantee.

Examples of more serious errors or discrepancies include:

  • an RFR for an unallowable item
  • omission of a significant amount or type of reporting information
  • actions taken without prior approval when the grant stipulated prior approval
  • significant delay in achievement of objectives and performance measures.

In addition to the information required for a first notification, this second-line notice would include any potential ramifications or imposed requirements. These, as defined in the Uniform Grant Management Standards, might range from temporary delays in reimbursement to designation of “High Risk” status or cancellation of the grant agreement.

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Resolution of Significant Findings

Significant findings are to be addressed immediately, with notification to the subgrantee from the director of the TxDOT Traffic Operations Division - Traffic Safety Section (TRF-TS), or his or her designee.

Examples of significant findings include:

  • delays that are likely to significantly impact successful implementation of the project
  • discovery that an amendment was made in which the state-local share formula is inaccurate
  • indication of fraud or other illegal activity associated with management or implementation of a project
  • continuing delays or omissions in the submission of required documents
  • consistent failure to abide by a provision in the grant agreement.

Notification is to be made to the subgrantee’s signatory with single copies to:

  • the appropriate federal grantor agency, if federally funded
  • the project director
  • the TxDOT signatory
  • the file of record.
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Resolution of Major, Significant Findings: Options

The following serious incidents provide examples of ways a project or program manager is to resolve significant findings:

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Finding

Resolution

Significant delays due to unforeseen circumstances

Renegotiate action plan (for General Grants); ensure completion of project grant amendment, if necessary.

Failure to submit a Performance Report

eGrants will not allow a subgrantee to submit a Request for Reimbursement (RFR) until the corresponding Performance Report has been received.

Unapproved or ineligible costs (greater than $250)

Return unapproved RFR for corrections or demand that the necessary correction or adjustment be made to the subsequent RFR or final RFR.

Inability to complete necessary tasks

Cancel grant agreement, preferably on a mutual basis.

Illegal activity

Ensure investigation is being conducted; initiate stop work order if appropriate.



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Project Audit

If serious financial problems are identified, the TxDOT Traffic Operations Division may request that the TxDOT Audit Office (AUD) perform an audit.

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High Risk Designation

A subgrantee may be considered “High Risk” if TxDOT determines that a subgrantee:

  • has a history of unsatisfactory performance,
  • is not financially stable,
  • has not conformed to the terms and conditions of the award,
  • is otherwise not responsible.

Special conditions and/or restrictions shall correspond to the high risk condition and shall be included in the notification to the subgrantee.

Special conditions and restrictions may include:

  • withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given time period,
  • requiring additional, more detailed financial reports,
  • additional project monitoring,
  • requiring the subgrantee to obtain technical or management assistance, or
  • establishing additional prior approvals.

If TxDOT decides to impose such conditions, the TxDOT project or program manager will notify the subgrantee as early as possible, in writing, of:

  • the nature of the special conditions/restrictions,
  • the reasons for imposing the special conditions/restrictions,
  • the corrective actions which must be taken before special conditions/restrictions will be removed,
  • the time period allowed for completing the corrective actions, and
  • the method of requesting reconsideration of the conditions and/or restrictions imposed.
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Mediation or Cancellation

If actions are not taken to resolve findings, or if actions taken (including placing a subgrantee on “High Risk” status) are not successful in resolving the problems encountered, then the project is to be canceled. However, mediation by TxDOT may be initiated prior to cancellation in a final attempt to resolve differences and come to terms on actions needed. Mediation may be initiated by the subgrantee or an official of TxDOT, including the project or program manager, programs director or administrator, or traffic operations director in the district or division. Results of mediation are considered final for all parties. Work may continue at a reduced level during mediation if approved by TxDOT. If the grant agreement ends during mediation, a new grant is not to begin until the mediation has been successfully completed.

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Right to Appeal

The subgrantee may appeal a decision made by TxDOT, according to the provisions of the grant agreement. This appeal does not apply to any situation that has gone into mediation.

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