AYBR Program Administration

Lesson 11: Final inspection, draws and closeout

Module 5, Closeout and compliance · 14 practice questions

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Reading

The last stretch of a household project is where good fieldwork either turns into reimbursement or turns into a problem. AYBR pays once, after everything is done, so the draw package has to be right the first time. This lesson walks through the final inspection, the package, the single payment, the paperwork you keep, and the audit filings that come with receiving state money.

The final inspection

The final inspection checks that the work was done in a professional manner consistent with all applicable building codes (10 TAC 26.27(a)(2)). It also checks the hazard standard from Lesson 8: at completion the home must be free of life-threatening hazards and unsafe conditions (26.27(d)(4)). The Inspector is certified by GCHS and may be GCHS staff or a contracted third party. GCHS staff who inspect or estimate a job never bid on it (GCHS procedure).

Walk every item in the scope with the household. The report must show that punch list items are done, that the work complies with code, and that no life-threatening or unsafe deficiencies were observed. The manual's Stage 4 list (page 27) has the head of household and the Inspector sign the Final Inspection form, with the initialed scope of work attached. The timeline on page 10 adds the Administrator, and page 28 says all parties must sign, so have the Administrator sign too. The report goes to both the Department and the household. Take labeled "After" photos as you go, because they are part of the package.

The accessibility standard still applies in the way Lesson 8 described. The rule says the work is made with consideration to the 2010 ADA Standards and may vary from them to meet the household's specific needs. A final inspection that fails a household-approved adjustment because it differs from a standard dimension misreads the rule.

One payment, plus the administrative draw

The Department reimburses the Administrator in one single payment after a successful Project and Administrative Draw Request (10 TAC 26.28(d)). Interim draws may not be permitted. The User Guide says the final draw request is the only project draw you will submit for the household. With no progress payments, the Department's checkpoints at Stages 2 and 3 matter, and so does this package.

The timing rule is the same one from Lesson 10. You submit the draw not more than 60 calendar days after the HAC expires (26.28(a)). The manual also says eligible costs must be incurred during the Reservation System Access Agreement period, so check your RSP Agreement for how that applies when a household job straddles an agreement date.

The draw package goes to the Department, while the lien waivers, the bills-paid affidavit and the warranty handoff stay in the household's Activity File.

What goes in the package

Per the manual, the Stage 4 package contains the following, and the User Guide agrees on the core items:

Department-approved change orders.
Permits and green tags.
The Final Inspection form, signed by the head of household, the Inspector and the Administrator, with the initialed scope of work.
The Administrator Certification of Energy Efficiency Rule Compliance.
The Construction Contractor's Request for Payment and the contractor's invoice.
The Activity Soft Cost Invoice.
Labeled "After" photos.
Evidence of the builder's one-year warranty (10 TAC 26.28(b)).

Three more papers must be collected and retained in the Activity Files, and the manual lists them apart from the upload list (check the current draw checklist): the Final Lien Waiver for Contractors, the Final Lien Waiver for Subcontractors, and the Final Bills Paid Affidavit. The manual points to Texas Property Code 53.085 for them. Their job is to show that the contractor and subcontractors have been paid and have released their lien rights, so collect them before you close the file.

Entering the draw

In the Reservation System you create the final draw request and enter the Hard and Soft Costs. Neither amount may exceed its budgeted amount, and Soft Costs requested must not exceed 10 percent of the Hard Costs requested. You complete the checklist, upload the PDFs and choose "Submit for Approval."

The administrative draw is a separate request: exactly 10 percent of the total project draw (Hard plus Soft), tied to the 10-digit activity number. The User Guide's rounding instruction is to round digits 5 through 9 up and 1 through 4 down. It also calls creating the administrative draw on the wrong screen the number one mistake. Create it from the Reservation Agreement screen.

Why this matters

Because there is one payment, a single missing paper can delay all the money, including the administrative fee. A deficiency you do not fix within 14 calendar days of notice can lead the Department to cancel the reservation. You may resubmit if funding permits, but funding is not guaranteed.

Before you press submit

A short walk-through catches most deficiencies. These are good practice, built from the package list above.

Add the Hard and Soft figures by hand and compare them with the contractor's invoice and the Soft Cost invoice.
Check that every signature and initial the forms call for is present and dated.
Match each change order in the package to a written Department approval.
Confirm the After photos are labeled and cover every room and exterior side the scope touched.
Ask someone who did not build the package to read it cold.

Worked example: the Ortiz draw

The Ortiz household (made up) was reserved at $22,500: Hard $20,455, Soft $2,045. The construction contract came to $19,200 and one Department-approved change order added $600, so Hard Costs are $19,800. GCHS claims $1,500 of staff time and mileage as Soft Costs.

Hard $19,800 is under the $20,455 budget. Soft $1,500 is under the $2,045 budget and under 10 percent of $19,800, which is $1,980.
The project draw is $19,800 plus $1,500, which is $21,300.
The administrative draw is exactly 10 percent of $21,300, which is $2,130.
The Department reimburses $23,430 in one payment.

Had GCHS drawn the change order's $600 without Department approval, the change order could be disallowed, and the whole package would be a correction exercise.

Review time and cures

The manual says the Department will attempt to review the Stage 4 draw documentation within 14 calendar days. That is a target, not a rule deadline. If the Department finds a deficiency and it is not corrected within 14 calendar days of notification, the reservation may be cancelled and then resubmitted if funding permits. Respond to deficiency notices the day they arrive.

Scenario: the missing certification

GCHS submits the draw for the Nguyen household (made up) on a Friday. On the following Tuesday the Department writes that the Administrator Certification of Energy Efficiency Rule Compliance is missing. The 14-calendar-day cure period runs from the first day after GCHS is notified. GCHS signs and uploads the certification the same day it can verify the compliance, not on day 13. The lesson is practical: a certification is easy to produce when you are organized and hard to produce under pressure, and the whole payment waits on it.

Plan the calendar backward from the HAC expiration date. The draw window is the 60 calendar days after expiration, but waiting for the end of that window leaves no room for a cure period, a resubmission or a late lien waiver. Aim to submit as soon as the file is complete and checked.

Closeout and records

There is no separate AYBR closeout rule in the sources. The single payment follows approval of the draw, so for GCHS's purposes approval and payment of the draw is the financial end of the job (GCHS procedure). The Department has a close-out letter for monitoring, which Lesson 12 covers, but that is a different process. The sources used for this course do not give a wire timeline or an AYBR closeout checklist, so confirm timing against the current Program Manual.

Keep the records. Under 10 TAC 1.409(b), client eligibility records are retained for five years from the date the household activity is completed, unless federal rules say otherwise, and your RSP Agreement may set a longer period. Retention for denied applicants is an open item, because no activity is ever completed for a denial. A conservative practice is five years from the denial date. Files stay in a secure space, computer files are backed up through a remote or managed service, and original documents never move to a consultant's place of business. At GCHS, applicant records live only in the Restricted SharePoint library.

Do two more things before you call a household closed. First, hand the household the warranty information and make sure they know who to call, which is the duty from Lesson 10. Second, complete the program data the manual asks for, including the race and ethnicity data for households that applied or benefited, and file the draw summary and wire memo in the accounting section of the Program File. The manual also says program documents must be available for public inspection by the Department, the Comptroller and the State, so keep the file in a state you would be comfortable showing them.

Audit filings

Receiving state money brings annual paperwork. The Audit Certification Form is due within two months after the end of the organization's fiscal year (10 TAC 1.403(d)); the manual says 60 days. A Single Audit is required for fiscal years starting on or after October 1, 2024 when the organization spends $1,000,000 or more in federal and state awards combined in a fiscal year, and AYBR dollars count. The audit report is due by the earlier of 30 days after the auditor's report or nine months after the fiscal year ends (1.403(e)). Late filing may result in suspension of use of the Reservation System for reservation set-ups and draw requests, so a late audit form can stop a household that is otherwise ready to draw.

What goes wrong

These are teaching examples drawn from the requirements, not TDHCA findings data.

Creating the administrative draw on the wrong screen.
Soft Costs above 10 percent of the Hard Costs requested.
Submitting an unsigned Final Inspection form or one without the initialed scope.
Releasing final payment to the contractor before the lien waivers and bills-paid affidavit arrive.
Missing the 60-day draw window after the HAC expires.
Letting the Audit Certification Form slip past the two-month mark.

Practice questions

1. How many reimbursement payments does the Department make for one household project, and how are they requested?

Two equal payments, one at rough-in and one at completion, each requested separately by the Inspector
Monthly progress payments of up to 50 percent of the Hard Costs, with a final balance paid at closeout
One payment for Hard Costs, with a second payment for Soft Costs after the warranty period ends
One single payment, requested through a final Project and Administrative Draw Request; interim draws may not be permitted

2. The HAC for a household expires on a given date. By when must GCHS submit the draw?

Not more than 60 calendar days after the HAC expires
Within 30 calendar days after the final inspection is signed, even if the HAC has not expired
Within 90 calendar days after the Department approves the selected bid
Within 12 months after the Department notifies GCHS to proceed with construction

3. A final draw requests Hard Costs of $19,800 and Soft Costs of $1,500. What is the administrative draw?

$1,980, which is 10% of the Hard Costs alone, rounded to the nearest hundred dollars
$2,250, the maximum fee, which is paid whatever the amount of the draw
$2,130, which is exactly 10% of the $21,300 Hard plus Soft total
$2,045, which is the default Soft Cost amount at the maximum reservation

4. Which item is uploaded with the Stage 4 draw package?

The Final Lien Waiver for Contractors, which the Department must receive before paying
The Administrator Certification of Energy Efficiency Rule Compliance
The Final Bills Paid Affidavit, which the Department must receive before paying
The household's Household Income Certification, to prove the household is still eligible

5. What does GCHS collect and keep in the Activity File at closeout, in addition to what it uploads?

The Final Lien Waiver for Contractors, the Final Lien Waiver for Subcontractors and the Final Bills Paid Affidavit, as the manual points to Texas Property Code 53.085
A single preliminary lien waiver from the general contractor only
Interim lien waivers after each progress payment
Only the household's signature on the Final Inspection form

6. Who should sign the Final Inspection form, and what is attached to it?

The contractor and the Administrator, with the signed construction contract attached
The Department's program manager on site, with the Stage 3 approval notice attached
The household's lender and the Inspector, with the appraisal-district screenshot attached
The head of household, the Inspector and the Administrator, with the initialed scope of work attached

7. What must the final inspection show before GCHS submits the draw?

Only that the contractor has been paid in full for all of the line items
That every dimension matches the 2010 ADA Standards exactly, with no household adjustments allowed anywhere in the scope of work
That punch list items are done, the work complies with code, and no life-threatening or unsafe deficiencies were observed
Only that After photos exist for each room, whatever the condition of the work

8. The Department notifies GCHS of a deficiency in a Stage 4 draw. What may happen if it is not corrected within 14 calendar days of notification?

The grant converts to a loan that the household repays when the home is sold
The reservation may be cancelled and then resubmitted if funding permits
The deadline is extended automatically by another 14 calendar days
The household must repay the work already completed by the contractor

9. The manual says the Department will attempt to review a Stage 4 draw within 14 calendar days. How should GCHS treat that figure?

As a rule requiring approval within 15 business days or the draw is approved automatically
As a statutory deadline after which interest is owed to the Administrator
As a 30 calendar day period under the monitoring rule
As a Department target in the manual, not a deadline set by rule

10. When is the Audit Certification Form due?

Within two months after the end of the organization's fiscal year
Within 30 days after the HAC expires for each household
Within nine months after the end of the fiscal year, with the audit report
With every draw request submitted to the Department

11. An organization's state and federal awards total $1,150,000 in a fiscal year that starts after October 1, 2024. What applies?

No audit is required until awards exceed $5,000,000 in a single fiscal year
A Single Audit is required, with the report due by the earlier of 30 days after the auditor's report or nine months after year end
An audit is required, with the report due within 60 days after the end of the fiscal year
Only the federal awards count toward the threshold, so no audit is required

12. What can late filing of audit paperwork do to GCHS's AYBR work?

Cancel only the reservation for the household currently in construction, leaving other work unaffected
Raise the administrative fee percentage until the form is filed with the Department
Suspend its use of the Reservation System for reservation set-ups and draw requests
Nothing, until the Department's next monitoring visit takes place

13. How long are eligibility records kept for a household whose project is complete?

Five years from the date the household activity is completed, unless federal rules or the RSP Agreement require longer
Three years from the date of the final draw, or until the next monitoring review if that comes first, whichever is shorter
Until the 12-month warranty period ends
Seven years from the date of the application

14. Which statement about closing out an AYBR household project is best supported by the rule and manual?

A closeout letter that the Department issues for every household once the single draw has been approved and paid
Expiration of the 12-month warranty period
Receipt of the final lien waiver from the contractor
The sources set no separate AYBR closeout rule; the Department pays once after a successful draw request

Glossary

Final Inspection: The inspection at completion that verifies code-consistent work, finished punch list items and no remaining hazards.
Punch list: The list of items still to be corrected before the Final Inspection form can be signed.
Draw request: The request for reimbursement; AYBR allows one final draw for the project plus a separate administrative draw.
Administrative draw: A separate request for exactly 10 percent of the Hard plus Soft total, created on the Reservation Agreement screen.
Final lien waiver: A paper from the contractor or a subcontractor releasing lien rights; collected and kept in the Activity File.
Bills Paid Affidavit: The Final Bills Paid Affidavit stating that bills for the work have been paid; kept in the Activity File.
Audit Certification Form: The annual form due within two months after the end of the fiscal year (10 TAC 1.403(d)).
Single Audit: An audit required when federal and state awards total $1,000,000 or more in a fiscal year.
Retention period: Five years from completion of the household activity for eligibility records (10 TAC 1.409(b)).

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