1. (a) Previous Participation Reviews for annual non-competitive contracts funded through the U.S. Department of Health and Human Services' Community Service Block Grant Program ("CSBG"), the Low Income Housing Energy Assistance Program ("LIHEAP") and the Department of Energy Weatherization Assistance Program ("WAP") will be conducted in connection with the preparation of the applicable State Plan to be submitted to the appropriate federal agency.
2. (b) Capitalized terms used in this section shall have the meaning ascribed in Chapter 5 of this title.

3. (c) Any entity that the Department may enter into a contract with will be required to submit:

   1. (1) A listing of its current board of directors, council, or other governing bodies as applicable;
   2. (2) A list of the Subrecipient's key personnel (Executive Director, CFO, program director) and the length of time they have been in that position and employed by the Subrecipient;
   3. (3) Identification of the client tracking and financial management system or software used by the Subrecipient and the length of time that the entity has been utilizing these systems;
   4. (4) Any pending state or federal litigation (including administrative proceedings) against the Subrecipient along with any final decrees within the last three years;
   5. (5) A list of any multifamily Developments owned or Controlled by the Subrecipient that are monitored by the Department; and
   6. (6) Identification of all Department programs that the Subrecipient has participated in within the last three years.
4. (d) Subrecipients will be provided a reasonable period of time, but not less than five business days, to provide the requested information.

5. (e) The Subrecipient's financial obligations to the Department will be reviewed to determine if any of the following deficiencies exist:

   1. (1) Payment of principal or interest on a loan due to the Department is past due beyond any grace period provided for in the applicable loan documents;
   2. (2) The Department has requested and not been provided evidence that the Subrecipient has maintained required insurance on any collateral for any loan held by the Department;
   3. (3) The Department has requested and not been provided evidence that property taxes have been paid or satisfactory evidence of a tax exemption on any collateral for any loan held by the Department; or
   4. (4) Fees or other amounts owed to the Department which are thirty days or more past due.

6. (f) The information provided by the Subrecipient, the results of the most recent Single Audit, any deficiencies identified in subsection (d) of this section and all findings identified during any monitoring visits conducted within the last three years (whether or not the findings were corrected during the corrective action period) will be taken into consideration to:

   1. (1) Prepare the monitoring plan, including the identification of the contracts that will be monitored under the funds provided through the state plan;
   2. (2) Identify if applicable, any element that will be monitored for all contracts;
   3. (3) Identify any recommended special contract terms and conditions;
   4. (4) Identify any "Network wide" training that will be offered; and
   5. (5) Identify any CSBG eligible entity that will be required to prepare and submit a Quality Improvement Plan ("QIP").
7. (g) If any deficiencies in subsection (d) of this section are identified, or if the most recent Single Audit contained findings or if there have been any monitoring findings identified during the last three years, the Subrecipient will be notified that EARAC will be informed of such issues (with the exception of events of noncompliance precluded by Texas Government Code §2306.6719(e)). The Subrecipient will be provided a five business day period to provide written comment or propose conditions or mitigations. Although there will be an opportunity to respond and comment within the five day period, a response is not required.
8. (h) The list of Subrecipients along with summary information regarding monitoring, (with the exception of events of noncompliance precluded by Texas Government Code §2306.6719(e)), Single Audit and any deficiencies identified in subsection (d) of this section will be presented to EARAC. EARAC may request any other information from the Compliance Division that is documented in the compliance history with the exception of events of noncompliance precluded by Texas Government Code §2306.6719(e).
9. (i) EARAC can recommend award, denial or award with conditions.
10. (j) Any Subrecipient who will be recommended for denial or award with conditions or any CSBG eligible entity that will be required to submit a Quality Improvement Plan will be informed in writing and will be required submit a written response or propose conditions or mitigations. An additional five business days will be provided to submit the written response or proposed conditions or mitigations. If the Subrecipient's response does not result in EARAC recommending award with no conditions or award with conditions that the Subrecipient agrees to, the Subrecipient will have the opportunity to appeal EARAC's recommendation in accordance with §1.304 of this subchapter.
11. (k) Although funds may be reserved for the Subrecipient or the Subrecipient's service area, consistent with §1.3 of Subchapter A of this chapter, concerning Delinquent Audits and Related Issues, the Department will not enter into a contract or extend a contract with any Subrecipient who is delinquent in the submission of their Single Audit, unless an extension has been approved in writing by the cognizant federal agency.
12. (l) The Department will not enter into a contract with any Subrecipient who has a board member on the Department's debarment list or the federal debarred and suspended listing. However, other than debarment, individual board member's participation in other Department programs is not required to be disclosed and will not be taken into consideration.
13. (m) The Department will not enter into a contract with any Subrecipient who is on the Department's or the federal debarred and suspended listing.
14. (n) Previous Participation reviews will not be conducted for contract extensions. However, if the entity is delinquent in submission of its Single Audit, the contract will not be extended.
15. (o) Full Previous Participation reviews will not be conducted for contract amendments if the increase in funds is 15% or less. However, EARAC will be notified of any monitoring findings that have been identified since the most recent previous participation review and for which the corrective action period has elapsed. In addition, EARAC will be notified of any Single Audit findings that have been identified since the most recent previous participation review. The contract will not be amended if the entity is delinquent in submission of its Single Audit. Subsections (f) and (i) of this section shall not apply for an amendment that award funds under this subsection. Full Previous Participation reviews will be conducted for contract amendments if the increase in funds is greater than 15%.
16. (p) Previous Participation reviews for discretionary or competitive awards made under any of these programs will be conducted prior to the award of funds. Subrecipients will be required to submit the required information listed in subsection (b) of this section along with the application for funding.

Source Note:The provisions of this §1.302 adopted to be effective July 26, 2015, 40 TexReg 4685.