October 21, 2026 · Economic Recovery Special · 9,959 words · 4 speakers · 22 segments
Are you going to be on tv again? Alright. Thank you. Welcome to the economic recovery special Committee.
I am Senator terrell mckinney from omaha, representing district 11, and I serve as the Committee chair. If you're planning to testify today, please fill out one of the green testify sheets that are on the green table at the back of the room. Be sure to print clearly and fill it. Fill it out completely when it's your turn to come forward to testify. Give the testifiers sheet to the Committee clerk. When you come up to testify, please speak clearly into the microphone. Tell us your name and spell your first and last name to ensure an accurate record. When you begin your testimony, the light on the table will be green. When the yellow light comes on, you'll have one minute remaining, and the red light indicates you need to wrap up your final thoughts and stop. Questions from the Committee may follow, and you'll have five minutes. A final few items to facilitate today's briefing. If you have handouts or copies of your testimony, please bring up at least ten copies and give them to the page. Please silence or turn off your cell phones. Verbal outbursts of applause are not permitted in the hearing room. Such behavior may cause for you to be asked to leave the briefing. I will now have the Committee members with us introduce themselves starting at my left. Afternoon, everyone. Jason prokop, legislative district 27, west lincoln, lancaster county. Hi, Senator marco juarez, district five, omaha. Kristi armendariz, district 18 in omaha and bennington. Thank you. Also assisting the Committee today is urban affairs Committee legal counsel elsa knight, who's to my right and to my left is Committee clerk sally schultz. With that, we'll begin today's briefing. Good afternoon, and welcome to today's briefing for the economic recovery special Committee.
My name is Senator terrell mckinney terrellmckinney, and I represent district 11. The purpose of today's briefing is to receive formal updates from the department of economic development regarding the ongoing progress, administration and oversight of our economic recovery programs. To assist the Committee in this review, we will have invited officials appear before us. First is marvin larson, director of the department of economic development. Ashley drake, interim economic recovery division administrator. Audrey schowalter, compliance division administrator. As chair. My intent is to hear directly from our invited guests regarding the department's current work, and open the floor from Committee members to ask questions and discuss the next steps. Over the past year, I've heard a multitude of concerns from grantees and community members on the management and process of the north and south omaha recovery grant process. Those concerns include a lack of effective and efficient communication response, turn turnarounds taking weeks and sometimes months ever changing reporting requirements which have which have stalled and delayed projects, and multiple grant managers for grantees, which has caused issues as far as conflicting ways to report and those type of things. So just trying to get a better understanding of that. We have probably like a year left of the of the total program. And my biggest concern is that projects will not finish on time, potentially. And I just want to get an understanding because I've had a bunch of people and not just one entity or a couple. It's been a bunch that have reached out to my office and just kept raising the same concerns around delays in the process, reporting requirements changing over time, and not getting adequate responses back at a time in a timely way to make sure that the project stays on track. And this is in no way to try to point any fingers. For me, it's trying to find a way to figure out what are the reasonings and how can we, as a Committee, even myself, help to assist in any way possible to make sure that these projects are completed when they're supposed to be completed, and if there are issues, how can we get those issues resolved sooner than later? So with that, I'll close. Thank you. First, I would welcome up maureen larson, director of the department of economic development. Good afternoon. Senator mckinney and members of special Committee.
My name is maureen larson. I'm a ureenlarsen. Senator mckinney. I'm the director of the department of economic development. I don't have any prepared statements today. We're just here to answer questions. Unfortunately, we didn't have an agenda or any, but we're happy to be here. I do want to introduce the team that I brought with me. We have ashley drake. Ashley is the director of our omaha office. She oversees all of the nsas grants and economic recovery. Also have audrey sauder, who is our compliance director. I will say that audrey is and her team do a lot of the compliance work. Some questions she may not be able to answer because there's statutorily confidential, but she's here to answer questions. And I also have holly hartman, who's our chief financial officer. If you have any questions related to money. With that, I'm happy to answer any questions that you have. And if I can't answer the questions, I'm happy to get the information to you. What can I try to answer for you? Okay. Any questions from the Committee first? Yeah, I'll ask a question. Mark, Senator morris. So how are you keeping up to date on the progress of dispersion of funds? And you know how each project is getting accomplished on their timeline. Who who keeps track of that? Like, does the omaha person has in charge all the omaha projects that she oversees? So we have multiple it's a multi-layered approach. So we have something called an it's a multi-layered approach. So we have something called an amplifon or uno, which is our grant management system. That's how we oversee every grant within the department. All of our grantees, they have access to this. So when there's reporting requirements, they upload documentation that is pursuant to the agreements that they signed with the department to get their grant funds. This grant, as you, I'm sure you are aware, is was a fronted money. So meaning that the disbursements were set up front and then to have automatic disbursements. So the reporting requirements are sometimes lagging behind the funds going out. So that's where we're at this point because some of the work has been done. The funds are already there. It is now the department's job to make sure that the funds are spent according to statute and according to the agreement and appropriate ways. So that's how we're doing that. But that's all managed through our grant management system. And then we have our on the ground people up in omaha, the omaha office for economic recovery team. We also have a compliance team that is a second level of review to make sure everything complies with, whether it be federal statute rules and regulations, state statute and best practices on grant management. Does that answer all your questions? I have one more follow up. Okay.
As far as the compliance person goes, does does this person actually go out to a site to physically look at how things are getting done? You know, for our project, it. Might not be the actual compliance director, but people, yes, they go out and we actually document with either photography or we'll have somebody actually go and do a site inspection. Yes. Okay. Thank you. Thanks. Other questions. All right. So you heard my opening. And I guess the first thing I'll talk about is what I've been hearing from grantees is just the communication between grantees and has been problematic and causing issues. For example, I've talked to somebody recently that said it took weeks to get a response from somebody within the department on just an email. Can you speak to how communication is being conducted, and why are people raising concerns about communication, taking long and responses not being that great? Sure, I'd have to ask a little bit more specific information on what type of communication it is, if it's something that's taking weeks for response. My initial reaction would probably be that that's because it's being run through compliance teams. Sometimes we'll have grantees that will upload or provide numerous documents and receipts, bank records and things like that, which take more time than just a simple email back. So that may be an issue, but I'd have to know like which. Grants, for example, somebody was doing some reporting and sent back whatever that was asked them, and they didn't even get a response back or whether the email was received or it was in process or like it was being evaluated. It was just like they told me we sent it back as far as our reporting, but nobody has responded and said it's even been received. Okay, if you can get me the name of that, I'd be happy to follow up with see which grantee that was and whether it was something that was provided through our grant management system, or whether it was a direct email. It was it's been multiple. It was not a specific one. I want to say, okay. Yeah. I'm happy to look into it. All right. Then to get to like the, the reporting requirements, I've also talked to other a lot of grantees and have said multiple times where they started with one grant manager or program manager. This person asked for this, that person left. Now this new person is asking for that information again and other information. And now that people are being told they were what they assumed was compliant isn't compliant today, and it's just causing issues and feel like the burden of that is being overly placed on the grantees versus the as far as like the requirements. And can you speak to that. First, the the differing team members? I can speak to that for sure. We're actually hiring right now.
We have a high turnover rate, our omaha office, a lot of our teammates actually end up working for the grantees. They develop relationships. They are very good at grant management. They know how to run programs, and then suddenly they say, I'm leaving in two weeks, I'm going to work for. And it's often, if not almost extraordinarily frequently, one of the grantees hires our employees very quickly. So, yes, we do have high turnover in the office. We are trying to work with that. We're actually also bringing in temporary. We're trying to bring in sos temps to try to help with that so that we have a little bit more bandwidth in the omaha office. That's been a problem since day one of the omaha office. Unfortunately, we can't compete with some of the nonprofits and the private sector, but we do try. So that's the issue with the turnover in there. And a lot of times what we have is we'll get if they're getting differing requirements, we'll say, I need this report. And I'll tell you one of the biggest complaints that the team has in reporting is that we have grantees who will just ghost the department, meaning there's no reporting. And so we'll start with you owe us a report. You're supposed to be doing reports. It should be uploaded to this spot. And we'll just get no reports. So that's a red flag for us that will often start a compliance process. That's when we start reaching out. And then at each step, if there's an issue with compliance, we offer technical assistance. Some grantees will accept it and will actually sometimes go on site and help them. And some just don't want to give us the information. Or it's like pulling teeth to try to get the information to us. If there's information that's provided, and then there's additional information that's requested subsequently. Oftentimes or sometimes what happens there is that that information wasn't adequate or that may have raised a red flag. Again, I'd have to know the context of what was submitted first and then what was asked for subsequently, because oftentimes if it's here's a receipt, was that a reasonable use of grant funds? We need to know what that receipt was for. If you send in a receipt for a car and you're a grantee, we need to know, did you buy a car? What was that car for? Was that car part of something that you signed in your agreement that you needed for that grant? It's situations like that where we're constantly asking for secondary information. And then there's also the second or third level of review where we have our compliance team.
And so now that we're actually the money's going out, we're getting reports we're having to justify, and we're having to shore up what the actual documentation that's given to make sure that that fits the grant and fits where it is, so that we don't have people buying things with grant funds that they shouldn't be. That does take time, depending on the size of the grant and depending on how many line items. For example, if you are a small business owner, it may be quicker that we are able to get back to you because you don't have 1500 lines of invoices and things that you spent with receipts that would match up with each line item. Okay, well, I guess I would say I've talked to the small ones and the big ones, and they all say like the process is crazy. And it's like, even if they have the people from ded on staff, the process of getting things to flow efficiently is like a huge issue. It can be a huge issue. And we've looked at things like with the small business grants, for example, if we have $50,000 grant for a number of small businesses, is there a way to make this more streamlined? And then at this point, we have about a year left, as you said, do we want to have each person amend an agreement to make a less onerous evaluation process, or do we just try to give them enough technical assistance to get it through? So we're constantly evaluating how we can streamline it. But again, we have to comply with the agreements that were signed before my time back in 2023. So is it worth amending every single one to make it easier on the back end? I don't know, maybe it is, but at this point I don't think so. So that's why we're offering technical assistance. And I'd say like the small business ones, those are the ones I'm less worried about because we have some that are at the final stage of being done, those small businesses, and it's just basically getting the paperwork over to us so we can close those out. And that hasn't happened yet. To date. How many are completed? How many projects are completed? Yes. There's some projects that are completed. I think ashley can speak more about the projects themselves. We don't have any that are closed because again, because the money was front loaded, there's administrative things on the back end where we're waiting for documentation showing how the money was spent, how it was used, the project was done, documentation of how each all of the funds were used and things like that. Okay. Are also like, I guess I've talked to people who got the initial lump sum or whatever. They started to get payments and then it stalled. And because it stalled, it's caused their projects to just be severely delayed.
And I've also got calls from vendors like contractors and things like, hey, what's going on? We are working on multiple projects and we're not being paid either. So it's just creating this bottleneck. I, I guess my question would be, how can reporting still make sure everything is straight, but still be conducted in a more efficient way? So we're not creating these bottlenecks of just months and months and months behind schedule. So again, without having the context, that sounds like one of the instances where we have money going out the door, either reporting wasn't being done or reporting wasn't being done adequately, or there were gaps in showing where the funds were to be used. And after multiple times where we've noticed such red flags, if we're not getting compliant data, then a project is warned, they're offered technical assistance, and then they're put on suspension. And then during that suspension, we again offer technical assistance and give them an opportunity to cure. And during that cure. And I know audrey can speak about this because one of her main priorities is to identify vendors that are doing work. And if we have justification that this vendor is doing work, we make every effort to make sure those vendors are being paid while that entity is being is trying to cure their noncompliance issues because we want these projects all to succeed. And on that topic, I also spoke to entities that are being told they can't spend to those vendors because of the compliance process. So that would sound more like that's on a higher level, probably a pre termination because the opportunity to cure did not, they just were not able to cure. But again, we've offered in some instances, we've said go out and hire people, whether it be auditors, whether it be accountants, whether it be fiscal analysts to go out and help you get compliant so that we can pay you. And we've offered to pay those salaries in order to get the grantee compliant so that we can continue with the project. We've also offered our own technical assistance from our own team to actually go. Some of times it's on site to go through books, try to figure out where the receipts are, what can we actually say is a reasonable cost and a reasonable spend, and then shore up the documentation showing that happened and then we can pay it fair. I guess the question would be there were times where what was reasonable was reasonable. Then somebody left and it became unreasonable. And I feel like people are getting dinged based on reporting. That was okay. And that's how they were reporting. Then change over happened and now it's not. And now they're being told they were they're being held to two different standards. There was this one standard that they started with that was okay, things were moving. Then change happens and that standard switches.
And now, because the person who was in place prior had them reporting to a certain standard, now their projects are being delayed. So I think there's two different parts to that. One is that what standard should they be compliant with? And I think that's with all of the statutory requirements and the agreements, whether or not. And I would say that's probably either before my time or right when I started the department where there were there was turnover and that some reporting requirements were not being required, I if that's true, I'm not sure. Maybe ashley can speak to that. But again, she just took over the director position recently. We also have been, as a department becoming compliant heart stop. We are working with past auditor findings. We are working with statutory requirements, rules, regulations and setting up best practices and policies for grant management. We've also had a number of employees take training on how to best manage in a legal and best practices way grant management. So we've implemented those. The other part of that issue is that as money was out the door, but work wasn't being done, the reporting requirements changed because money wasn't being spent. So now, as we say, we built the plans as they were flying. So now the planes are all flying, money is being spent and now we're requiring how is that money being spent? So when you get an advance and you say, I went out and I hired an engineer and he looked at the site and this is what the engineer said, and this is how much it paid him. That's a lot easier reporting than I bought this, this, this, this and this. Here's the timeline. Here's the scope of work. Here's all the contractors I hired. So there's a lot more onerous process. Once you're actually in the midst of a project being built. Okay. Any other questions for me? So just a few, few questions. So these are all arpa grant funded not. Okay. So can you talk about the funding mix of where it's all coming from? So this is LB 531. Okay. This was the one that was it really was. 1024 so you could correct me if I was wrong. I started with. Ten 2010 started with 1024, and then it was switched from arpa funding to state funding. So this is all state funding. So it's just the mix. Okay. So you all some I'm a little bit new to to it since this is pretty montana Legislature, you've talked about amounts as far as amounts that have been granted out. So could you just give it to me in numbers, like how much has been granted out? How much? I guess the total that was granted out when when initially the program was set up, what has actually been paid out?
What is I just would call it pending based on either hiccups by the department, hiccups by the grantee, and then like, what's what's left to be when you when you talk about a year left in the program, what happens then if that year comes and goes and some of these issues aren't resolved, what's going to happen to those resources? Sure. I think there's a number of questions. There's 232 million that went out that was basically for this. Holly's here. She can talk about how much is still left because it was an advanced program and a front loaded. And then with automatic advances, a lot of that money has gone out the door. We actually created a dashboard in order to give Senator mckinney and your Committee, I don't know if you've seen it. It's been up for quite a few months now about all of the projects, and this is self-reporting by the project. So some of them will change as we go in and we make sure that we're that those are accurate, but it shows how many jobs are being reported created, how many projects, the actual graphs of how much money is out the door, and the status of each project, whether it be 50%, 75. So we had 114 of these different programs. So I don't know how many exactly are in what stage, whether 50, 60, 70, 75. But I would say if you want to look at that dashboard and then if you have any questions, I'm happy to to follow up with that. Okay. And what happens if. I hope. Every project is absolutely successful? What happens if it doesn't? So what happens if if there is money there? So again, we hope that every single one is there. If there's money left over those projects and sort of must be completed by december of 2027, all scope of work has to be done and the money has to be out at that point. If we have a leftover some at that point, that's something that we'll have to talk to the Legislature about. Okay. But I do hope every single project is able to be 100% completed. Quick question, quick follow up on that. And of these dollars appropriate, how much of that goes towards agency operations or expenses to administer all the things you've talked about on on your. I don't know the answer to that question. The percentage, but holly is here. I think she can answer that question. I have a number in mind, but I don't want to. She she would correct me if I was wrong and I'm not supposed to turn around and ask her. Okay. All right. Thank you. Other questions, I guess on the deadline date, I do have a curious question. Let's say it's november. I have a contract signed and I'm working with a contractor.
The work is being done, but but it won't be completed until january. Does that stop? That stops. It's a hard statutory stop. So december 2027. So but the contract was signed prior to december 27th. But the work has to be completed. That's the statutory. That's what it says. Yes. I thought it said expended. Well expended. Like you're paying your contractor. Yeah you're paying. But so you're saying could you prepay services and have. That would be a really good question for audrey, my compliance director. I mean. Because because that's the other thing with these delays, people have contracts and it's potentially possible for some of the services to not be able to be rendered at the december 27th deadline. But the contracts had already started, and the work has already begun. Right? I would say please ask that question because I'm sure she's already thought about it. She's extraordinarily gifted in knowing how the compliance rules work. And she could probably answer that. I would say that I would be very concerned with prepaying contracts when there's a statutory requirement that the work be done. I'm not saying prepaid, I'm saying contract signed. So an entity and a vendor agrees to some services. They sign a contract because of the delays. Now the contract probably has to be extended because the date of the start date versus now is probably, let's say one of them is behind a year or six months is delayed. The project completion because of just compliance process. I would really just hope that they get in compliance as quick as they can, because I really want those projects to go so they have a year left. If a project is not compliant and needs technical assistance, please have them reach out to our their program manager or their contact in the department because we want to get that. We do not want to be in a situation where we're in december and we're having to figure out if some grantees are have prepaid contracts and having to do that for sure. I'm not saying prepaid contracts. I'm saying just signed a contract for services that are not able to be completed because of the delays, which arguably probably on both sides of the table, d, d and probably the grantees too. I don't think it's been a one sided issue as far as resolving compliance issues. That's all I'm saying. I would hope that the the amount of technical assistance that we're offering and giving, I think that that is an adequate solution to the compliance issues. And even with allowing non-compliant grantees to go out and hire staff to become compliant, I think that that is a is a huge benefit to the grantees to get compliant. But also we'd have to look. At how if they're being told they can't spend any money.
So we're we're working with grantees that are currently on suspension so that they can get compliant. And part of our ask is get compliant, get us the receipts, get us documentation. And we've allowed we work with these grantees. We don't just shut them off and say, go get compliant and come back when you're ready. We're constantly working with them. And then one of the benefits that we've offered is go out and hire people, and then we've authorized payments. As long as payments are reasonable amount to get compliant and bring in staff to do that. So we can continue on. Okay. So we have even though they're on suspension by agreement, we've allowed them to actually go out and hire people, and we've allowed them to continue paying for the purpose of getting compliant. And then on your other question is, if the contract is signed, you also have to look at the agreement that grantees signed with d, e, d, which is the work will be completed by. And so that would be an issue to. Yeah, I yeah, but I just feel there's mutual. What's the word, mutual accountability on both sides. So what I'll say. I'm going to have to I'm going to have to disagree with you on that. I think that we've they may be delayed a little bit in responses, but I think the amount of technical assistance we've offered, trying to get people into compliance. And again, the number one issue is just not reporting, which is just not. Okay. I guess what I, I don't, but I feel like where there's smoke, there's fire. Like I'm not just speaking of 1 or 2 entities, I'm speaking of a bunch of them all have the same gripe. And to me that says something is wrong somewhere. And these that are on suspension. They are not on suspension, but they're still. Getting some funds. Some of them are. Some of them are delayed. So if they're not in suspension, then they're still getting their funds. Not all of them are getting funds. I guess I would be curious of what you consider suspension. They would get a letter from the department saying you this entity. Here's the terms of your agreement. Here's how you're in breach of this. But if some of. Them that you're on suspension. But there's some that are not on suspension, but submitted reports and haven't been reimbursed. It's not a reimbursement. Well, not burt receive payment is what I'm saying. Okay, then there's probably a compliance issue there. And that. That's what I'm saying. Like they're all not on suspension, but there's an issue somewhere along the line. So there's a suspension where you get the really naughty letter like you're on suspension. There's also like, okay, you are not reporting, we're withholding payments because you ghosted us and you fail to file reports or this is missing from the report.
But that nonpayment of funds is a last resort. But when it's not. I guess what I'm trying to say is I've talked to people who submitted the reports who haven't been they haven't even received replies to the reporting that they were required to report. But are they still getting their funds? I don't think so. Okay, but they're not on suspension. Okay. They submitted the reports, but. Then maybe it's a great report. And we're like, okay. Yeah, but they haven't received the funds either. Oh, again, that is the disconnect because it's advanced payment process. So I don't know why. If they're not on suspension or if they're not working with a program manager for compliance issues, why they wouldn't be receiving funds. If you give me the name of that grantee, I'll reach out to them myself. I'll I'll talk to you. Okay. Yep. All right. Thank you. You bet. Other questions? No. All right, I guess I'll talk to ashley or. Good afternoon. I'm ashley drake, a shleydrake. I am the interim division administrator for the economic recovery division out of the omaha office for ded. I assume this position around may 2026. So there is, as maureen mentioned, some things that predated her. There are many things that predate myself as well. Definitely will do my best to answer your questions, but may need to provide some additional information following today's hearing. All right. Thank you. Are there any questions from the Committee? Yeah, I have just some basic questions. So do you know how many grants that you're actually supervising for omaha? Yes, I have norfolk is one small, maybe not small, butt it is about a third of the grant funding and awards that my team is administering. So if you look at it in terms of dollars, my team has administered over $700 million across arpa, a few non arpa other cash funded programs, and then norfolk. And we have about 260 grants that we are ensuring some of them closed out. But there's always additional information that may be needed for an audit or a report for maybe the federal reports are due quarterly or the next year. So that's the size of our the economic recovery division. And then there are three programs that are slightly outside my purview that I work in close contact that are housing, economic recovery, arpa housing programs. But the housing team oversees the day to day for those. And then we just work together regarding the arpa requirements. Okay. Do you have any idea, like, could you give me a percentage of how many have been, you know, completely closed? Is it pretty small? I would say actually, I couldn't give you an actual percentage, but I wouldn't say that it's small. I'd say it's significant. Right now our division arpa is ending. All funds must be expended by 1231, 2026.
Our internal deadline a lot many of our agreements ended september 30th, 2026 so that we'd have plenty of time to do final reviews. Usually, when a period of performance ends, there's 30 to 60 days following for final finance reports and things to come in. So again, a significant number of the arpa awards have closed out in the last two years. And prior to being the division administrator, I oversaw the arpa programs for the last two years. So. So no, it's not a small figure. We've closed out and successfully paid out several awards. And sorg is one of the later pieces of legislation that will be 531 legislation. We have not closed out any of those awards yet. We still have a few administrative actions. We release the final report, so we're waiting on grantees to submit that final report. That's going to give us more aggregate data as to how the dollars were used, where jobs created, and what other economic development or growth was fueled by the grant funding that they received. Okay. Thank you. Other questions? I guess my questioning would be. Thank you. Other questions? I guess my questioning would be. Why do you think it is that so many people have concerns that the process is being delayed by you guys? In order to answer that, I'd say it's hindsight's 2020. And earlier the director had testified as to, you know, reports coming in, but maybe in the day to day and how I work with my team, I see we don't just sometimes get one report. If we find an error on a january 2025 report, it often was repeated in february, march, april and so forth to today. So then we have to reopen, allow them to edit maybe a year or more worth of reports. And sometimes people will wait till the very, very last possible day to turn in their reports. And we will maybe get 100 reports in a day for per staff member to look at. Other times we might reports are due by the 15th of the month following for normal financial reports, quarterly reports, same schedule, but just on a quarterly basis. Some people will do it on the first, the second or third, but we tend to see a big influx on the 15th just for our normal reports. So why there's a delay or a backlog is sometimes our team just sees a large influx and they have to work through those. And then again, if an error or multiple submissions get turned in, then it takes time to work through those and there's not presently a penalty. So aside from doing a corrective action plan or suspension, people will turn in reports late and without again a penalty. There's no fine, no fee, no assessment negative to them other than maybe the risk of corrective action.
So the team is actively trying to work on the reports that they have, and then also actively trying to collect the reports that are missing. So we're. Often switching back and forth. And one award does not behave like another award. And one program doesn't always behave like another word. Capital projects, again, like the director had mentioned, usually much easier. You get a large invoice that's for $100,000 or more for a period of time. You look at one invoice and that's done for the month. Other ones, again, small receipts, multiple line items to review those take more time. So we are only human. We do use a grant management system. There are directions on how to file. And those have been around for some time. But just as we have had staff changes, sometimes the organizations have staff changes as well and they need assistance. So the grant management system is very reliable, but it is particular in how we need to do things and to get them done on time. But again, there's no penalty if they do it late or if they turn in multiple submissions. And so I think that explains the bottleneck a little bit. And hopefully. Hopefully the team. Is not the grant management system notifies us. Your earlier statement. Sorry, I was thinking through the best response to that. The grant management system notifies us when a report comes in, like it's an automated system. We do not notify a recipient that we received it because they have their own internal record. They submit it, they can log in at any time into unit and see do they have reports outstanding or if they've been submitted. To what is the like the average turnaround time. So submit a report. What is the average time where somebody will get a response about that report? That I honestly don't think I can give you an accurate and fair number. Again, just due to different which staff members assigned. We have different programs, different workloads. One report may have one invoice, some reports, financial reports are turned in and there's no invoices. They're still required to report monthly. So those ones we can usually knock out same day and we don't know news from us as good news. We do not notify you that your report has been accepted or approved. We reach out if there's a correction needed. Okay. I guess one thing I'm trying to wrap my head around is how can somebody go months submitting something that's not right if you give them. So I submit a report in january and I continue to submit the same report, but it's not caught until december, I don't how is that possible? It's one answer. We're human. Just sometimes maybe something wasn't seen. The state apa comes around and other audits and investigations help us develop best practices.
So perhaps a recipient provided a snippet of a bank statement and we realized, oh, with in consultation with our compliance team, that these some of these bank statements are being deliberately to omit who's the bank holder? So then a whole new process is in place to ensure that we collect the entire bank statement. Like what are they redacting? What are they omitting? Why? So because of the action, maybe of one award or one audit finding, then it impacts all of the divisions, programs and awards. Okay. I guess moving forward, how can grantees and dd work better together in your, in your opinion? Okay, you've been to our omaha office. I'd say that is an option. We are happy to host meetings, do technical assistance in person. Staff are generally available by phone. They may not always be able to answer immediately, but all of our direct lines, phone numbers, emails are advertised on the website. So I'd say opening the door if they have questions. If somebody is not receiving a response, they can absolutely follow up with me and let me know the situation, and I can double check to see what's going on. There are some things sometimes that may take a bit more time to review. If it's in with the compliance department or an investigation or something a little bit more technical. But we are here and have been here and aim to be responsive. Okay. Thank you. Just a question back to something, Senator. Senator, director larson mentioned filley not putting words in my mouth, but you said you compete with other folks. As far as employees, how many ftes do you oversee and how many do you have open positions? What is that? What is what does staffing look like in comparison to the amount of grants? And then the dollar amounts, including those grants because of. Obviously, the amount of work that that, you know, ties into. So sure. Right now, our economic recovery division in the omaha office, I'm overseeing five positions within vacancy. We have a manager position open right now, and then within that, we also have two compliance staff that work with us and then a legal staff, and then the housing team, that manager that's doing the arpa housing that I work with closely. So within the omaha office, at least nine employees being supervised in relation to the staffing, size and the amount of work. Right now, it's a very busy season. With arpa winding down, october, november, our going to be very busy. But as I mentioned, arpa ends. Everything has to be expended prior to 1231 2026. So which leaves or alleviates a great portion of our work, allowing us for 2027 to focus solely on norfolk and any other new legislative priorities that get sent our way next year.
So based on that team of nine, I think you said how many grants for this program are they overseeing or and is there an equivalent dollar amount tied to what's what was proposed in those grants? There's not the management style I have set up. There's not a division of work based on number of awards or by dollars, because that doesn't actually equate to amount of work. So one of our representatives working on arpa programs, he has nine different programs that he's overseeing in about 20 awards, but they are nine different programs, multiple legislative bills. So each different state statutes to know, whereas somebody on our team may have 50 awards to manage. So there is but they are consistent within the same LB 531 and 1 or 2 different programs. So that's the same program manual and rules. So not exactly apples to apples within programs or even dollars. Our easiest, I'd say easiest just because it's all capital expenditure is the multi-purpose program, the levi carter park project. It's $35 million and somebody else might have $10 million. But levi carter is one award. So it wouldn't be fair to distribute awards based on dollar amount alone. Okay. Thank you. So. Not having worked, you know, being familiar with your office and how it operates, I'm curious if you see a pattern of entities having the same issue, you know, for your compliance, your reporting, stuff that you need, is there a way that you can communicate to everyone that says, these are the this is the main error that we noticed this month. And this is what happened. This is what you need to do to resolve this error. And that that's something that could be sent out to everyone so that everyone learns what's the correct way, you know, to be compliant because your system set up, or do you have a way that you can communicate with people about something like that? We do. So when we go to announce an opportunity, like a grant award is open for application, we have a process. It's internally called mailchimp is the term or the platform that's used. But we can draft an email and it gets sent out to whichever awards it's applicable to, or whoever's on our mail server list that wants to receive those updates. So absolutely, we have a way to do that by email. I'm sure we could probably create some sort of virtual platform, like set a teams meeting and share out a link, kind of like a virtual office hours. And so if that is something that would be beneficial to just have a discussion as far as, again, for technical assistance or best case best practices, do, don't do this. Certainly we have the technological capabilities to do it.
It's just trying to do so in a manner that suits some people, like the articles where they can print it out, they can look at it at two in the morning if they feel like it. Some people we have one recipient that, you know, they're a teacher. The grant manager is a teacher, so she can't do anything during business hours. So that makes it hard for our team to communicate with her during the day. But I do think we have multiple avenues we could explore if that's needed. I just think that, you know, everybody learns differently. You know what I mean? It it's just sometimes like by example, sometimes you may, you could be reading something and one person may interpret it this way and one person may interpret it that way. You know, I just think, however you can enhance communication with these entities, especially if you see consistent errors happen. I think it's good to try to take advantage of different ways to explain the problem that you see, how we need to get it resolved. Make giving examples of the errors that happened. You know, maybe somebody could spot and say, oh, I thought it was like this, you know, and they were doing the same thing as another person was doing. I just think it's always good to try to communicate in different ways. Okay. Thank you. That was it. Thank you. I woke him up. Audrey. Thank you. I woke him up. Audrey. Thank you. I woke him up. Audrey. Thank you. Andrew. Thank you. Alright, so I'm looking at. Oh, can you spell your name? And last? First and last. Sorry. Yes. Audrey cedar a udrey. My last name is cedar, sautter. All right, thank you. So I'm looking at section 51, part four, where references. December 27th. But the way I'm reading it and I could be wrong, but it says for grants awarded under this section, the division shall pay a grantee an advance of 50% of the total grant awarded, with the remaining grant funds paid on a monthly basis until the grant is paid in full or by december 31st, 2027, whichever occurs sooner. So. I guess, how are you reading that? So my interpretation is that the grant funds have to be out to the awardees before december 31st, 2027, and that the program ends on december 31st, 2027. So if they're incurring expenses, they would have time to report after december 31st, 2027, but the project needs to be completed by that date. And when I say the project needs to be completed by that date, it depends on the contract. So if the awardee was contracted, we contracted them for like a certain phase of a project or something like that. That portion, that scope of work has to be done by that date. Okay, go back to my scenario. I brought up earlier, what if it's in progress? My let's say.
Yeah. Grantee signs a contract. There's one more payment, but the one more payment doesn't happen till january. Is that possible? I think the last payment has to go out december by december 31st, 2027. Okay. So if they would have incurred expenses in the month of december, they would get money to pay those expenses. How so? If you can't prepay, could you get what I'm saying? Let's say somebody does work in december, but they can't submit the invoice until january. These are advances. So they're they're reporting lags by like a month or two. So if they incurred expenses in december, then they would report in january how they expended the grant, the advance. So there's a lag time but not on performance. Okay. So. Maybe I'm just looking at this in a wrong way. So if they are if work is being done in december, it just has to be completed by the end of december. But they could file for. So like they would invoice for, let's say you had a contractor and they were doing work in the month of december, they would incur that expense in the month of december. Like that would be an expense that was incurred. They got invoiced for they get invoiced in january. They should get an advance by december 31st. And then they would report they paid that contractor for the december work in their december monthly budget report. That would come into us in january of 28. Okay. I think I'm understanding. All right. As far as compliance, what are you seeing as a recurring issue that keeps coming up with grantees? One of the things that we're seeing is the invoicing. Some of the invoices are not describing the work that's being done and showing that it's going to the grant. So an example is, let's say you have a project and they only a portion of the grant funds are part of a bigger operation. If they turn in an invoice for an electric bill, is that supposed to be going toward the grant? But we can't tell. It's not going toward the whole organization's electric bill. Okay. So seeing that it's allocated to the grant, we're not seeing that some of the descriptions of work are like consulting. Well, what consulting did you do? You know, we get a bill that says consulting for $20,000. Okay. Tell me what you what you did with that. That's one of them. For salaries, time and effort reporting. We're getting a lot of time reporting, but we need the effort reporting. So if you pay somebody, you know, 30% of their time working on the grant, tell us what they were doing. Interests, interest, interested parties as another issue that's come up to conflict of interest or conn contracts require that you disclose that to us. We're seeing that that's not being disclosed to us.
We have to look at that closer to make sure that those expenses are reasonable. Anything else? There's a lot. We have a myriad of things, and we try and communicate those in detail to the awardees and let them know what they need to do. If it gets to to my level, we outline specifically what needs to, to be on there and what's required. Okay. Another question. What is your opinion compliance opinion on? Let's say somebody has some funds. The funds are sitting in their account, but the funds are accruing interest. How does that work? So that depends on the program. I think there are certain programs where the interest is specifically stated in the contract that that goes toward grant, and it depends on how the statutes are written and the other programs. If we have a cap on how much we can expend, it's all state. The interest is all state funds. And so it's a cap. If we have a cap of like $10 million on what we can give you, then the interest you would have to use it for the grant could be subtracted from your ultimate award. So you can't get more than $10 million. From the interest. From the whole the whole award. And if you incur interest, it's supposed to go toward the grant. Okay, so there would be a balance left at the end. And it has to go towards the grant. Yeah, but cannot exceed the grant. Depending on how the it depends on how it's written. So like for LB 531 there's certain things that are earmarked for different grants that aren't answered for. And I think we said specifically in the award that the interest was part of the grant, and I'll have to. I don't recall off the top of my head exactly what that contract says about that. You said the end. So how does that work, though? Because let's say you gave somebody a dollar in an account and it grew a penny. Is that penny not go towards the grant or they have to get that penny back? Like I said, it just depends on the earmark and the program. Okay. On the federal side, on the federal grants, there's two different methods for dealing with interest and like program income, it's either added to the award or it's subtracted. You can't exceed the amount of the award. And it just depends on how the program is set up and what was in the statute. Okay. I'm trying to think if I have another question. No. That's it. Thank you. You got it. Thanks, sir. Okay. I want to follow up on some comments that you made, and especially from the question that I had asked earlier about trying to be consistent in getting good messaging out to the entities. Right. Okay. So you made a comment about time and effort reporting.
So have you provided an example to these grantees on effort reporting? Because to me that is really vague. And we've I've also heard more than once you guys state reasonable. Well, what's reasonable to you and what's reasonable to me? You know, I, it just raises a lot of concerns for me about administration. I would say one of the things that's a barrier to the compliance for both the department and the awardees is the you know, when you're talking about reasonableness, is the diversity in the portfolio that we have. That's a benefit because we're doing a lot of different work in a lot of different industries, a lot of different areas. But to say like, if something's reasonable in a construction project versus what's reasonable in maybe like an employment assistance, smaller. Award, it's hard to get blanket advice on that sort of thing. One of the things the awardees can do is they can do, you know, research to see what's like a market industry rate or, you know, if we question it, if they have support for that, they can provide that to us to show that, you know, this is what's normally paid for this type of work. If that's put into question. But the documentation should essentially speak for itself, but they provide. Okay. Could you give me an example of something that's a time and effort reporting? Just give me a scenario of where that would happen. For example, if you turn in a payroll and you have somebody that I'm going to use the employment, let's say they're doing employment assistance program, it's a $150,000 award, or let's say it's like $1 million award. And they have somebody working on the project from like january to march. They can go ahead and say like they're working on reviewing applications. So that would be when they write their time. They spent four hours today reviewing applications. We're just not seeing. We're just seeing somebody report like we did eight hours worth of work, you know, eight hours worth of work. And it tie it to their job description. Okay. So if somebody said just, that was a very good example, reviewing applications, that's acceptable. If somebody just says reviewing applications, they don't have to state what number of applications it was or what type or anything like that. Just saying reviewing applications is okay. The more detail they can provide, the better. But if it's part of their job description and that's what they're doing for a certain period of time, if they say reviewing, you know, 2020 applications, that helps support that, but they should be able to tie what they're doing to their job description. Now if. Yeah, so that's what I would say for that. Okay. Do you find a lot of compliance issues, you know, around documentation of this nature or does that usually go pretty good as far as compliance?
Are you talking about specifically the time and effort. Or just any example of this nature? Because to me, this is pretty vague and I'm, I'm just concerned about. You know, the controls that you have on your end. Are you being consistent? What how you apply them in, in the different industries like you, like you discussed or more industries might, might require more documentation? Yeah. So that that's again, the difficulty with the diversity of the portfolio that we manage. Somebody saying, I reviewed an application and charging $50,000, that's not going to be sufficient. So, you know, we have issues with that. Depending on what the industry is. The industry is and the amount of money involved. Okay. Thank you. Thank you. Another question. Can you tell me where in the statute that it says that's interest funds are to go to the like basically count as project funds. I don't have anything to point to specifically. Okay. Because I was, I don't know, I'm just sitting here looking and I can't find anywhere that says if I receive 10 million and for some reason that shouldn't happen, it accrues 10 million in an account that the interest that accrued is counts, not the other ten. That's what I'm trying to understand is some of these funds have been sitting, and I'm just wondering if if anything was accrued over time, why is there a penalty to it? In a sense. There should you mean a penalty to somebody? So basically, if you have 10 million in account and and it proves some type of interest by sitting. Can. How is that being counted? I don't think I'm understanding your question. If I have 10 million and the account grows by 2000, how is that 2000 being accounted for? Well, it depends on the. It depends. Again, it depends on the program. So I think it's dealt with specifically. I'd have to provide information to the Committee. I don't know off the top of my head. Okay. Can you give that to me. Yeah. I'm just trying to get an understanding. And also, could you get something to me about your understanding on the end of program date and what is required and what is needed by that time? Yeah. Okay. All right. That's it. Thank you and appreciate your time. And that'll be it for today. I appreciate you all for coming. If you have additional questions, I'll reach out to you all. And same for Committee members. And I'll take what y'all said, and I'll try to relay it to the grantees as best as possible to try to be helpful on my end. So thank you. Thanks. Thank you. No problem. Yep. Okay. Recorders are turned on.