Section 5: Resolution of Findings

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 2 C.F.R. §200.328, and Article 7 of the Grant Agreement Terms and Conditions, the subgrantee must inform the grantor (TxDOT) of any events that may have “significant impact upon the supported 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 subgrantee Project Director for correction. Appropriate documentation of the nature of the problem should be included in the transmittal. Project 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 Grant Management System (eGrants) under “Change the Status” 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.

First-line Resolution - Minor Findings

The TxDOT Project 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 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 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.

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 manager may resolve minor findings. Left undetected or unresolved, minor discrepancies may become major problems.
Resolution of Minor Findings
Finding
Resolution
Unapproved or ineligible cost in the RFR
Return report to subgrantee and ensure correction in the re-submitted RFR.
Delay in reporting
Provide written reminder of due dates; provide assistance.
Data omitted from reports
Return the report to subgrantee and provide a written reminder and explanation of purpose of data.
Delay in activity
Discuss the delay with the subgrantee’s Project Director; ensure the objective(s) activities are current, if applicable.

Second-line Resolution - More Serious Error or Discrepancy

Upon a repeated incidence of a finding or a more serious error or discrepancy, the Project 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 a designation of “High Risk” status or cancellation of the grant agreement.

Resolution of Significant Findings

Significant findings must be addressed immediately with notification to the subgrantee. For local and statewide projects, this notification must come from the Director of the TxDOT Traffic Safety Division - Behavioral Traffic Safety Section (TRF-BTS), 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.
In the event of significant findings, notification must be made to the subgrantee’s signatory with single copies to:
  • The Project Director.
  • The file of record.

Options for Resolution of Major and/or Significant Findings

The following table provides examples of ways a project manager can resolve significant findings.
Resolution of Major, Significant Findings
Finding
Resolution
Significant delays due to unforeseen circumstances
Renegotiate grant objectives and activities; ensure completion of project grant amendment, if necessary.
Failure to submit a Performance Report
Ensure the subgrantee is aware that TxDOT will not approve a Request for Reimbursement (RFR) until the corresponding Performance Report has been submitted and approved. Also, ensure that the subgrantee is aware that Performance Reports must be submitted within thirty (30) days after the end of the reporting period.
Unapproved or ineligible costs
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 a Stop Work Order if appropriate.

Project Audit

If serious financial problems are identified, TxDOT TRF may request that the TxDOT Compliance Division (CMP) perform an audit.

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 must correspond to the high-risk condition and must 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.
  • Establishing additional prior approvals.
If TxDOT decides to impose such conditions, the TxDOT Project 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.
  • The method of requesting reconsideration of the conditions and/or restrictions imposed.

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, then the project must 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 a TxDOT official, including the Project Manager, Program Director or administrator, or TRF Director in the 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.

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.