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HomeMy WebLinkAboutItem 3B - Attachment A - Processes and Procedures for City Grant Management and Funds Disbursement MEMORANDUM To: Palm Springs City Council Members From: Scott Stiles, Palm Springs City Manager Date: September 12, 2024 Subject: Processes and Procedures for City Grant Management and Funds Disbursement In an effort for the City of Palm Springs to be more transparent in its use of City funds, my staff has developed a new set of grant management and fund disbursement processes and protocols for the City Council to review. This policy memo identifies seven areas for improvement and provides actionable recommendations to address them. These policy recommendations apply to any organization requesting funds directly from the City Council, either during the course of the budget process or raised at a City Council meeting. These policies do not apply to the Small Grants and Sponsorships program, which is administered by staff and has established its own rigorous policies, nor does this policy apply to standard City contracts for goods and services. I am presenting this proposal and asking that the Council approve these policy changes so that we can collectively agree to strengthen our processes. Funding Large Projects in Lump Sum Current Policy: Most funding from the City Council is distributed in a lump sum. Beginning this year, the only exception are applications through the Grants and Sponsorship Program that exceed $75,000; these are split into two payments, six months apart. Proposed Policy: Eliminate lump sum payments for any funding above $75,000. Grants and funding will be paid through reimbursement. The applicant organization is required to prepare an invoice and progress report showing work completed. If reimbursement will not work for a particular project, the City Manager is authorized to instead split funds into a minimum of 2 payments, with each payment distributed at least 3 months apart. For funds totaling more than $200,000, funds will be split into a minimum of four payments, with each payment distributed at least 3 months apart with the receipt of progress reports and financial documentation. Achieved through: Approval by the City Council. The Staff Report template and Grant Agreement will be updated to reflect changes. Regular Reports and Invoices Current Policy: Most City contracts reserve the right to ask for financials or progress reports at any time in the contract. However, it does not mandate them or establish a timeline for when and how many reports should be received. Proposed Policy: The City will require progress reports and invoices consistent with the proposed policy regarding Funding Large Projects in Lump Sum. For contracts within the reimbursement program, regular reports and invoices are necessary to receive funding. For contracts in which funds are split over time, the City will not release funds until receipt of required documentation. This will be outlined in the organization’s contract with the City. Achieved through: Approval by the City Council. Vetting Process for New Organizations Current Policy: There is a vetting process for organizations seeking funding through the Small Grants and Sponsorships Program. Grant funding outside the Small Grants and Sponsorship Program, above $75,000, requires City Council approval. Proposed Policy: Funding recipients must meet minimum eligibility requirements to receive city grant funding. This includes: 1. Be located in or provide services in the City of Palm Springs. 2. Meet the definition of a Nonprofit Organization and can provide the organization’s IRS 501(c) tax designation letter. 3. Have the ability to provide the organization’s 990 and 990-PF federal tax return, and/or audited financial statements. 4. Possess a valid City of Palm Springs Business License, as applicable. 5. Be found in good financial standing with the City of Palm Springs. 6. Be found in good standing from a legal perspective by the City Attorney. 7. Provide a proposal which will benefit those living in the City of Palm Springs. 8. Meet all criteria outlined in the grant application. 9. Compliance with all applicable federal, state, and local laws, statutes, and ordinances, and all lawful orders, rules, and regulations when performing grant-funded services. 10. Grantee shall not discriminate against any employee or applicant per the provisions of the Palm Springs Municipal Code Section 7.09.040. All nonprofit organizations, including those with whom the City has historically partnered, must meet minimum eligibility requirements, be in compliance and in good standing with the following agencies: ● IRS Verified Non-Profit Status ● California Secretary of State Good Standing ● DOJ Registry of Charitable Trusts ● Franchise Tax Board Status ● City Department of Finance ● City Code Enforcement Achieved through: City Council approval of policy revision. Independent Audit Current Policy: The current policy does not require organizations to submit audit documentation to the City. Proposed Policy: Require organizations receiving over $75,000 to submit an independent audit every year. Most organizations should already be performing an annual audit, so the burden of this requirement is low. Achieved through: City Council approval of policy revision, which is included in the minimum eligibility requirements. Identifying the Responsible Party on Staff Current Policy: There has been ambiguity about designating the staff person responsible for overseeing a program or contract. Proposed Policy: A sponsoring City department and individual point person on City staff will be assigned to coordinate and provide oversight of the grantee and audit the program/project expenses upon receipt. The point person is responsible for writing the staff report, overseeing the program and contract, auditing supporting documentation, and raising any issues with appropriate staff and/or Council Members. Achieved through: Policy directive from the City Manager to staff. Staff Training Current Policy: Training on grants and contracts among City staff is limited and informal. Proposed Policy: All City staff who, as part of their normal duties, may oversee a program or contract should be trained on policies and procedures of approving funding and overseeing a contract. This includes best practices, review of the staff report template, due diligence, documentation, and disbursement procedures. Achieved through: Policy directive from City Manager and/or Department Director to staff.