Item 06 - Arts Commission Presentation on The Long Center_4.6.26_Final.pdf — original pdf

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Review of Grant Administration Processes and Options Arts, Culture, Music, and Entertainment Current State 1: Where We Are A look at ACME Grant Administration 1: Where We Are • Past issue with Grants Administration • Relief & Recovery Funding • Call for a 3rd Party • How we work with The Long Center • How we work internally 2: What We Learned 3: Where We Go • Roles for Contract Management at ACME • Tools we used, City of Austin Best Practices, Departments we consulted, and process followed • Findings • Recommendations for improvement on the contract, amendments • What options do we see for how to move forward? • Maintain & Improve • Maintain & External Audit • New 3rd Party Procurement • Fully Outsource Program Management • Fully Bring Program Management in house 3 Past Issues for Cultural Funding Team Volume of Contracts (100+ per staff member) Final Reports + New Contracts at the same time (October) Required Pre-Contract Materials for COA Waiting on DO#s Up to 30 days for Invoice Processing (+ checks only) Bulk of time spent as "enforcers" vs Subject Matter Experts 4 Reviewing Materials takes a lot of time 80 Days Pre-Contract Materials Receive d to first Invoice submitted 40 Days Final Report received to Final Report closed out/ invoice submitted 5 Relief & Recovery: What grants could be. • Working with a Third-Party Administrator sped everything up. • Council directive to program design to funds distributed = Less than 6 Months COA Responsibility Third Party Responsibility • Provide application Questions (simplified) • Weekly meeting for oversight • Pay the administrative fee + grant fee • Create Press Release of Awardees • Create Dashboard for the website • Present to Commissions/ Council • Create Application within Submittable system • Provide all Technical Support • Score all applications & document process • Provide City with a Final List of Awardees • Notify awardees • Collect Award Acceptance/ Financial information • Cut and Send payments to Awardees • Submit a Final Report to the City • Time Spent • Total Applicants/ Awardees • Hours of Support provided • Cost was a flat 5-9% Admin Fee 6 Call for a Third-Party High expectations New HOT- funded grants • LMF & HPG • Elevate, Thrive, Nexus Limited Staffing Procurement Process led by Purchasing Department 7 How ACME works with TLC Create Application Submittable build- out Testing Create all promotion/ web info Design/ Plan/ Promote/ Lead Workshops Office Hours/ 1:1 App Assistance Manage all Technical edits/ issues with Submittable Provide technical assistance Create Panel Scoring Section within Submittable Select & Train Panelists Facilitate Panel Meetings Score LMF and provide final list of awardees Score CSAP and provide list of awardees Review Panel scores and make award recommendations Write Award Notification Letters Create Dashboards Update COA website Present to Commission/ Council Consults with COA Legal Send Award Notification Letters Follow Up with Awardees to Accept Awards Issue Payments Monitor Awardee activities/ compliance Review Awardee Final Reports 8 Some benefits of working with TLC Decrease burden on awardee re: pre-contract materials City Purchasing Process eliminated Increases speed of payments Increase type of payments Staff capacity to score LMF Troubleshooting technical issues with Submittable 9 Responsibilities and Partner Collaboration Contractor Responsibilities City Responsibilities • Portal system administration • Agreement execution checklist • Awardee payment processing • Financial tracking & quarterly reporting • Record retention • Insurance verification • Provide operational directions annually • Provide checklist templates • Provide equity training • Confirm final report receipt • Pay contractor invoices 10 Financial Structure ▪ Award budgets per program ▪ Admin fee cap structure ▪ Quarterly invoicing model ▪ Task-based admin categories (A–E) Important to note: ▪ Admin fees are tied to tasks, not outcomes. ▪ Payment is monthly regardless of performance metrics. 11 Internal Contract Review/Desk Audit 2: What We Learned Contract Review Steps 13 High-Level Findings Strengths: Areas for Improvement: ▪ Rapid deployment capability ▪ Strong financial team ▪ Portal/System familiarity ▪ Payment processing efficiency ▪ Ability to procure services quicker with less red tape (example: translations, technical assistance, etc.) ▪ Lack of performance metrics tied to admin fee ▪ Blurred lines between City oversight & contractor compliance ▪ Limited benchmarking of cost effectiveness ▪ No built-in external evaluation ▪ Administrative cost visibility by program varies 14 Implementing Grant Administration Improvements Phase 2: Contract Amendment (3-6 months) Phase 3: Monitoring & Reporting (ongoing) • Execute a contract amendment to introduce performance expectations and clearer reporting standards. • Require greater transparency of administrative costs and program expenditures. • Implement quarterly performance monitoring and annual contract performance review. • Use findings to inform continuous improve ments and future procurement design. Phase 1: Governance Improvements (-90 Days) • Develop a roles and responsibilities matrix clarifying City oversight vs. contractor compliance functions. • Establish quarterly contract governance meetings with program, finance, and compliance staff. • Define baseline operational performance metrics (processing timelines, payments, reporting). 15 Immediate Improvements to the Contract Management While maintaining the current grant administration model, the department will implement the following improvements to strengthen oversight and transparency: ▪ Strengthen contract management through quarterly performance reviews and formal monitoring practices. ▪ Clarify roles and responsibilities between City staff and the third-party administrator. ▪ Increase financial transparency through clearer administrative cost reporting and invoicing standards. ▪ Standardize program reporting on grants awarded, payments issued, and program outcomes. ▪ Strengthen compliance tracking for deliverables, final reports, and awardee monitoring. ▪ Capture lessons learned to inform improvements and future procurement design. 16 Strategic Paths Forward 3: Where We Go Consideration: Maintain and Improve Approach: Continue the current third-party administration model with The Long Center and proceed with the planned FY26 amendments and July program launch. ▪ Key Actions ▪ Strengthen contract management practices, including clearer performance expectations, reporting standards, and quarterly monitoring. ▪ Implement improvements identified through the internal contract review. ▪ Benefits ▪ Maintains continuity and program stability for the creative sector. ▪ Lowest operational disruption and no delay to program timelines. ▪ Considerations ▪ Retains the existing administrative structure; improvements would focus on oversight rather than structural change. 18 Consideration: Hire for an External Audit Approach: Maintain, improve, and engage an external auditor or consultant to assess contract management, cost effectiveness, and governance. ▪ Key Actions ▪ Conduct an independent review of the grant administration model, benchmarking costs, responsibilities, and administrative practices. ▪ Use findings to inform potential future contract amendments or procurement decisions. ▪ Benefits ▪ Provides independent validation and strengthens transparency and accountability. ▪ Allows programs to proceed on schedule while informing long-term improvements. ▪ Considerations ▪ Requires additional short-term resources and may result in recommendations for structural changes. 19 Consideration: Launch Process for RFQ to procure the next Third-Party Admin Approach: Maintain, Improve, and Conduct a competitive procurement process to identify a new third-party administrator for the City’s cultural funding programs. ▪ Key Actions ▪ Issue an RFQ to test the market for cost, expertise, and administrative capacity. ▪ Transition program administration to a newly selected organization. ▪ Benefits ▪ Provides an opportunity to benchmark pricing and services across the market. ▪ May introduce new operational approaches or expertise. ▪ Considerations ▪ Procurement and transition timelines could delay program implementation. ▪ Requires onboarding and potential process changes for a new partner. 20 Consideration: Explore Bringing Fully In- house Approach: Maintain, improve, and implement a phased approach to bring administrative staff back in house. ▪ 1. Planning & Feasibility (FY26–FY27) ▪ Validate staffing and operational model ▪ Request FTE’s to begin the transition ▪ Assess technology and internal process needs ▪ Develop governance and compliance framework ▪ 2. Budget Request (FY28–FY29) ▪ Submit request for additional FTE needs ▪ 3. Program Transition ▪ Gradually transition administration responsibilities to City staff 21 Next Steps – We are in the Exploration Phase Exploring our options - - Considering a potential third-party audit to better demonstrate benefits of third- Implementing improvements party and to create additional improvements - Considering relaunching the process for an RFP/RFQ to intake applications from all potential third-party partners in the future - Considering the ability to bring the program back in house Rayo de Esperanza/A Beacon of Hope: Cesar E. Chavez Memorial Sculpture by Connie Arismendi and Laura Garanzuay 22 Thank you for your partnership! Questions? 23