County grants jeopardized; possible mismanagement
When Valencia County's emergency management coordinator left her position earlier this month, she left behind three years of tangled files and more than a quarter million dollars in grant funding to be sorted out.
County officials say it will take a few weeks to rebuild the files former coordinator Glenda Chavez left behind to determine how much of the $325,000 in grant funding has been reimbursed to the county. Chavez tendered her resignation effective Feb. 7.
Typically, when grant funding is awarded, a contract for the funding is approved by the county commissioners and the finance department makes a budget adjustment for the increase in revenues and expenses in the amount of the grant.
Then the county begins to "draw down" or spend the money that has been budgeted. However, since most grants work on a reimbursement basis, the money spent is actually coming from the county's general fund.
"It's budgeted, it's there, but the whole thing is supposed to be a zero gain because the money spent is reimbursed by the grant," said Valencia County Finance Director Nick Telles. "The purpose of the grants is to increase the county's operational funds."
The money is reimbursed after the county has submitted the proper reports and paperwork to the granting agency, he said.
In this case, it is unclear if reports have been filed, what was filed and how much money the county has managed to collect from the grants, Telles said.
The grants came from two agencies — the state's Department of Homeland Security and the New Mexico Department of Health — and funded several emergency management projects, the finance director said.
Most of the grants obtained were to purchase equipment, such as equipment trailers, emergency shelter supplies and generators — all things the county would need to respond to large-scale emergencies.
"She was the sole grant administrator; that office — the emergency management coordinator — held all those files," Telles said. "I had been reaching out to her for almost a year about the grant reimbursements."
Chavez's position was created in 2011 to coordinate emergency plans for the county's emergency services departments, such as fire and EMS. Part of the salary for that position was funded through a Homeland Security grant.
Telles said it's unclear right now whether timely reports were made for reimbursement for that grant.
"We are working with the state to reconstruct what has happened and not happened in the last several years," he said.
The two state agencies that administer the grants for local governments are the pass-through agencies for federal grant funding the county has been awarded.
Adding to the complications is the fact that the grant manager at Homeland Security, who was administering the county's grant, left his position late last year, Telles said.
Valencia County Manager Jeff Condrey said during discussions with that department, it was indicated there were verbal agreements made with Chavez, but those reports were never entered into the county's grant file.
"There are things that are not in (the state) file," Condrey said. "And our own files leave a lot to be desired."
The manager said he and Telles are having a good dialogue with the new employee at Homeland Security as the county begins to reconstruct its files.
"They have said the problem might be partially their problem as well," he said. "But the whole situation is not good."
Telles said the grant contracts require reports from both the county and the state in order for the money to be released for reimbursement.
"The state is not supposed to release the money unless we are up-to-date on our reports," he said. "All those contracts were held in the emergency management office."
This issue with the grant reimbursements and lack of consistent reporting is one more example of long-standing and systemic issues at the county, Telles said.
"What we are seeing is 15 years of financial control problems," he said.
Historically, if a county department wanted to pursue a grant, someone from that department applied for the funding and if it was awarded, brought the contract to the county commission.
If the contract was approved, that department administered the grant and took care of the reporting requirements, Telles said.
"There was no centralized handling of grant paperwork and files," he said. "Since day one, the county has not had a policy and procedures on grants for the entire county. In talking with our auditors, they have been advising us that we need to centralize our grant management."
And the county has done that by hiring grant administrator Jay Moolenijzer. Grant administration for all county departments will now be handled by Moolenijzer as a part of the finance department.
"In the past, for the most part, the role of the finance department was to set up the budget adjustments and monitor for overspending," Telles said. "With Jay, grant administration will be more effective and we will have better controls.
"At this point, we don't know how bad things are — how much has been reimbursed, how much has not. We are talking to the state and they are telling us everything that can be done will be. They are not saying we won't be fully reimbursed, but grants do expire."
Telles said based on the information his department has been able to gather in the last two weeks, some of the $325,000 has been reimbursed but it's unclear how much.
One project that will be suspended until the issue is cleared up is the county's update of its multi-jurisdictional hazard mitigation plan to help reduce the risk of natural hazards.
The expense of updating that plan was funded by a Homeland Security grant.
"We're going to have to hold off on that until we figure out what the funding status is. We are trying to figure out where things left off," Telles said.
One emergency situation that cropped up last year was summer flooding. The county's public works department budget took a large hit late last year due to emergency road repairs.
To recover from that unexpected expense, the county declared a state of emergency and began the process of compiling information to submit to FEMA for reimbursement. That information was funneled through the emergency management coordinator for submittal to the federal agency.
Telles said to the best of his knowledge, all the paperwork was submitted to FEMA for reimbursement.
"My understanding is even in the best-case scenario, the process is slow and in comparison to other areas, the county was not hit as hard as some communities," he said.
As for how this lack of oversight could affect future grant funding, Telles said he couldn't speculate on how a potential grantor might view the issue.
"I know they do look at our audit. For instance, for the last several years, we have not been able to qualify for Community Development Block Grant funding," he said. "Thanks to the recent clean audit, we are now able to pursue CDBG money again."
Telles said he would be better able to talk about the situation and have more concrete numbers once his staff had combed through the three years of grant applications, files and reports.
"We have to find the gaps, see what information (files) have. We have to go through three years of someone else's system," Telles said. "We are seeing issues at this point but I am optimistic this can be corrected. We'll just have to go through everything to see where things are."
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