Caroline County waives performance bond for Martin’s House CDBG payroll grant

Caroline County Commissioners voted Tuesday to waive a performance bond requirement for a Community Development Block Grant (CDBG) payroll award to Martin’s House and Barn, a long-standing local shelter for people experiencing homelessness.

The commission’s vote came after Deborah, executive director of Martin’s House and Barn, and Mark Callahan, the nonprofit’s treasurer, described the organization’s operations and finances and asked that limited grant funds not be used to buy a bond. “$20,000 is the cost that we're looking at, to get a performance bond,” Mark Callahan said, adding that some insurers estimated up to about $19,000 if the county required coverage to be maintained for multiple years. Deborah told commissioners Martin’s House provided more than 10,000 bed nights of emergency shelter in the fiscal year ending July 31, 2024; “We currently have a total of 33 people in the shelter, 21 of those are children,” she said.

County staff and commissioners raised audit and repayment risks tied to state oversight. A county staff member said the state Department of Housing and Community Development (DHCD) can perform later audits and, if problems are found, the county could be required to repay grant funds. The staff presentation noted a theoretical repayment exposure cited in the meeting of up to approximately $190,000 if state review found disallowed expenditures.

Commission discussion referenced Martin’s House’s multi-year relationship with the county, prior audits and on-site reviews, and the organization’s reporting practices. “We've not had an issue,” a county staff member said of past subrecipient reviews. Commissioners said that long-term performance and documentation weighed in favor of a waiver.

A motion to waive the bond requirement was made and seconded and the board voted in favor. The commissioners approved the waiver on a voice vote; no opposing votes were recorded during the roll call on the motion.

The county’s grant coordinator noted that the standard subrecipient agreement still requires Martin’s House to reimburse the county if a state audit later finds noncompliance; that contractual remedy remains in place.

Martin’s House and Barn is a nonprofit shelter with a history in the county; the organization’s representatives told the board they use reimbursement-based accounting for payroll and submit semiannual reports to DHCD as part of the CDBG grant requirements.

Commissioners and staff said they would document the waiver in county records and attach the organization’s reporting materials and the written subrecipient agreement to the grant file.

The action affects only the current CDBG payroll grant request; no change to other county funding or other grant requirements was announced at the meeting.