Managing Your OHHLHC Grant

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This section provides you, the Grant Recipient, with important information and guidance to help you properly manage your assistance agreement. Cradle to grave information is provided from where to begin and how to end your agreement.

HUD's grant regulations are located under Title 24 of the Code of Federal Regulations (CFR), Parts 84 and 85. Grant recipients must comply with the requirements in these regulations. HUD will provide guidance, if needed. Non-profit organizations and institutions of higher education are governed by 24 CFR Part 84; State and local governments are governed by 24CFR Part 85.

The information provided below is not intended to replace the grant regulations but to serve as an additional resource for the Grant Recipient.

1. Whom do I contact if I need assistance?

Mailing Address

U.S. Department of Housing and Urban Development
Office of Healthy Homes and Lead Hazard Control
451 7th Street, SW, Room 8236
Washington, DC 20410

Technical Issues

The Government Technical Representative (GTR) is your primary point of contact. The GTR's name and phone number is listed on the Cover Page, HUD -1044, Block 9 of your grant agreement.

Administrative Issues

For questions concerning general administrative issues, contact your Grant Administrator/Grant Officer (GO). The GO's name and phone number is also listed on the Cover Page, HUD -1044, Block 8, of your grant agreement.

Payment/LOCCS

For questions regarding the payment process/the payment system, Line of Credit Control System, contact our Grant Assistant at (202) 402-7576.

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2. How do I get paid?

When HUD awards a grant to your organization, you will be instructed to return 3 signed original grant agreement documents. The most important step at that time is for your authorized representative to sign the copies of the agreement, which indicates your acceptance of the award. The award is a bilateral agreement. After HUD has received your signed copies of the agreement, the GO will execute the agreement and return one original agreement to you. Then you will be able to request payment for grant-related expenses using the Line of Credit Control System.

Line of Credit Control System (LOCCS)

LOCCS is the system HUD uses to disburse and track the payment of grant funds to Grant recipients (i.e. grantees). Grantees request program funds through an automated VRS payment system that is maintained by LOCCS. Grantees use VRS to request funds via a touch-tone telephone. Synthesized text-to-speech dialogue is used to request payment data from the caller. Requests for Reimbursement The VRS requires the caller to enter a LOCCS program Area User ID, password, and a Voice Response grant number to ensure that the caller has authority to request grant funds for his/her particular grant.

The requested payment amount is checked against the grant's available balance in LOCCS to ensure that the request does not exceed the grant's authorized funding limit. LOCCS will only allow one draw per day on a given grant, unless funds are requested by project or subgrantee. Once a request/draw is approved, funds are sent from the U.S. Treasury directly to the grantee's bank account, usually within 48 hours from the day the request is made.

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3. What grant regulations apply to my organization?

Code of Federal Regulations (CFR) — The CFR is organized by Title, Chapter, and Part. HUD grant regulations are found at:

• Title 24 - Department Of Housing And Urban Development;
• 24 CFR 84 - Administrative Requirements For Grants And Agreements With Institutions Of Higher Education, Hospitals, And Other Non-Profit Organizations; and,
• 24 CFR 85 - Administrative Requirements For Grants And Cooperative Agreements To State, Local And Federally Recognized Indian Tribal Governments

OMB Circulars — The following OMB Circulars may apply to the management of your HUD grant:

• A-21 Cost Principals for Educational Institutions
• A-87 Cost Principals for State, Local, and Tribal Governments
• A-122 Cost Principals for Non-Profit Organizations
• A-133 Audits of States, Local Governments, and Non-Profits

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4. How do I account for costs?

All costs shall be used only for eligible program activities. Refer to each individual Notice of Funding Availability (NOFA) for eligible program activities. You are required to adequately track and document all grant expenses. You should consider the following in order to establish a system which meets Federal requirements:

• Your accounting system must track costs, including match and leverage contributions, by grant as well as by expense category (e.g., salaries, supplies, equipment, travel). When establishing expense categories you should refer to the budget categories listed in your HUD grant agreement.
• You must ensure that all costs are allowable and acceptable. If you have any questions as to the allowability of costs, refer to the applicable OMB Circular for your organization or contact your HUD GTR prior to incurring those costs.
• Maintain good records. Make sure that all invoices, payroll expenses, etc. are filed along with all supporting information (e.g., contracts, time cards, etc.).
• File all expense records by expense category. In the case of multiple grant awards, each grant should have its own master file.
• Your accounting system should enable you to provide financial information, summarized by expense category i.e., a general ledger report). This system will also help support your payment requests.

5. How do I account for matching funds?

Many of HUD's grant programs require the grantee to contribute a non-federal cost-share or to match the Federal funds provided for the project. Consult with the NOFA under which your grant was awarded and refer to 24 CFR 85 or 24 CFR 84, as applicable.

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6. What is program income and what are my responsibilities?

Program income is gross income received by the grantee or sub-grantee directly generated by a grant supported activity or earned only as a result of the grant agreement during the grant period. Examples of program income include, but are not limited to:

• Fees for services funded by the grant.
• Income generated from the use or rental of property acquired with grant funds.
• Income from the sale of commodities or items fabricated under a grant agreement.
• Income from the payment of principal and interest on loans made with grant funds.
• Registration fees for a conference.

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7. What reports will I be required to submit?

Periodic reports from your organization provide HUD with information regarding the status of your project. There are two basic types of reports that you will need to submit: Financial Status Reports and Technical (quarterly and final).

FINANCIAL STATUS REPORTS (FSRs). Supplemental Guidance for FSRs What is an obligation? An obligation is an indebtedness or liability to pay for costs such as personnel, travel, equipment, and supplies and must be incurred during the budget period of the assistance agreement. Obligation is not to be confused with expenditure or cash disbursement.

TECHNICAL REPORTS. You will be required to submit periodic reports on your progress in meeting your work plan commitments. Generally, your work plan for the project or a condition on your grant award will specify the frequency and types of reports that are required and what they should contain, as follows:

PROJECT DELIVERABLES AND REPORTS. There are two major types of project-related reports you will be required to submit.

• Quarterly Progress Reports. Quarterly reports will be due no later than January 30th, April 30th, July 30th, and October 30th, for the preceding quarter following the initiation of the grant through project closeout. If a due date falls on a weekend, holiday, or otherwise-closed Federal workday in Washington, DC, it shall be extended to the next Federal workday in Washington, DC, without affecting subsequent due dates. A template to be used in the preparation of each quarterly report will be provided by HUD after grant award. Quarterly reports must reflect activities undertaken, obstacles encountered and solutions achieved, and accomplishments in each calendar quarter. Contracts, training materials and protocols, rosters of persons trained, outreach and educational materials prepared, and other significant products developed to implement, analyze or control the project or disseminate information are to be submitted with the quarterly reports as attachments. Login to the QPRS system.
• Final Report. A final report shall be submitted. Information on the Final Report is provided in the Closeout Guidance Manual.

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8. What records do I need to maintain and for how long?

Financial records, technical reports, grant work products, and all other supporting documents for your grant must be kept for three years from the date the grant was closed by HUD. Exceptions: " If there is an audit, claim or litigation regarding the grant which began before the end of the three year period, the records must be kept until all matters are resolved. " Real property (e.g., land, buildings) and equipment records must be kept for three years after the property/equipment is disposed. " Some HUD programs have special record retention requirements. Your HUD Project Officer will advise you if additional requirements apply to your grant. The Federal Government has the right to timely and unrestricted access to any and all records that pertain to the grant award.

9. How do I differentiate between sub-awards and vendor transactions?

Sub-Awards. Sub-awards are awards of financial assistance made by the primary grantee to eligible sub-recipients for the purpose of providing support or stimulation to accomplish a public purpose. This includes financial assistance when provided by any legal agreement, whether it is referred to as a contract or a grant. Sub-award agreements are sometimes referred to as "Pass-Through" funds. A sub-award should be used if the sub-recipient:

• Will have the responsibility for making decisions regarding the work to be performed, and
• Will use the funds to perform the project for its own purposes.

• The goods or services are directly provided to the Grantee organization for its own use;
• The Grantee specifies the requirements for the service/goods; and,
• The Grantee organization has control over the service being performed.

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10. What must I do to issue sub-awards?

Sub-awards should be written agreements and include the following items:

• Information sufficient to identify the Federal Program/Agency that provided the initial funds, such as:
• Catalog of Domestic Federal Assistance Number
• Federal agency's name
• Federal Grant Number and title of the project
• Federal requirements that apply to the sub-recipient, usually incorporated by reference.
• Any supplemental requirements from your organization.
• A description of the work to be performed.
• Duration of the project.
• Amount of funds being provided, including matching funds required.
• Access to records and record retention requirements.

11. How do I avoid conflict of interest when procuring goods and services with grant funds?

No employee, officer, or agent of your organization may participate in the selection, award, or administration of a procurement action if a conflict of interest would or would appear to be involved.

Conflicts of interest occur when an employee, officer, or agent, any member of his/her immediate family, his/her partner, or an organization which employs or is about to employ any of these individuals, has a financial or other interest in the firm selected for an award.

Your organization must have a written standard of conduct, refer to 24 CFR 84/85 - 84.42/85.36, to provide guidance for employees regarding their conduct in the award and administration of procurement. The standard should also include disciplinary actions that will be applied if an employee violates these written standards.

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12. What must I do to procure goods or services with grant funds?

Grantee organizations are required to have written procedures which cover all procurement actions and which comply with Federal requirements. The procurement regulations at 24 CFR 85 - 85.36, applies to State, local government, and Tribal recipients; 24 CFR 84 - 84.44, applies to university and non-profit recipients. These regulations contain standards which help ensure that materials and services are obtained in compliance with applicable Federal statutes and Executive Orders. States should follow the same policies and procedures they use for procurement with their non-Federal funds. Some of the major points contained in the procurement regulations include:

• To the extent practical, all transactions shall be conducted in a manner which provides open and free competition.
• All recipients shall establish written procedures which:
  • prevent purchase of unnecessary items o require, where appropriate, an analysis of lease versus purchase alternatives to determine which is the most economical and practical
  • ensure that solicitations provide:
    1. a clear description of the technical requirements
    2. the requirements which bidders must fulfill and the factors to be used in evaluating bids
    3. a description, whenever practical, of the technical requirements in terms of functions to be performed or performance required, including acceptable standards
    4. specific features of "brand name or equal" that bidders are required to meet.

Both exceptions may require prior HUD approval. Contact your HUD Project Officer before making binding commitments. Documentation of the steps and decisions that led to the award of each contract is extremely important.

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13. Are there any rules regarding management of equipment and supplies that were purchased with grant funds?

It is important that you understand the difference between equipment and supplies, since the treatment of and accounting for each is somewhat different.

Equipment. Equipment is non-expendable personal property having a useful life of more than one year and a cost of $5,000 or more per unit. What do I do if I purchased equipment under my grant? States may use, manage, and dispose of equipment purchased in accordance with State laws and procedures. All other organizations must adhere to the following:

• Equipment must be used in the program or project for which it was acquired as long as needed, even if the project is no longer supported by HUD.
• A control system must be developed to ensure adequate safeguards against loss, damage, or theft, adequate property records must be maintained, and a physical inventory must be completed at least once every two years.
• When acquiring replacement equipment, the equipment may be used as a trade-in or may be sold, with the proceeds used to offset the cost of the replacement equipment.

How do I dispose of equipment (items which are no longer needed)? When no longer needed for the original project, the equipment may be used in other activities currently or previously supported by a Federal agency. When actually disposing of equipment items which are no longer needed for the original project or for other Federally funded activities, the following applies:

• Fair Market Value < $5,000 per unit: May be retained, sold or otherwise disposed of with no further obligation to the Federal government.
• Fair Market Value > $5,000 per unit: Contact your GTR for disposition instructions.

Supplies. Supplies are considered to be all tangible, personal property other than equipment.

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14. When is a Single Audit Required?

All non-Federal entities that expend $500,000 or more in Federal funds in one year are required to conduct a single or program-specific audit for that year. The audits are to be conducted in accordance with the provisions of OMB Circular A-133. We recommend that you refer to the Circular for further information.

15. What if I need to make changes to my assistance agreement?

Budget or Program Revisions. There are certain budget and program changes that require prior approval by HUD. A detailed discussion of these requirements may be found in the regulations at OMB Circular A-102 -which was implemented by 24 CFR 85, OMB Circular A-110 - which was implemented by 24 CFR 84, and OMB Circular A-133 which was implemented by 24 CFR 84 and 85. Some of the changes requiring prior approval by the GTR through a grant amendment include:

• Changes in scope or objective
• revisions requiring additional funds
• budget revisions, when the cumulative transfers among direct cost categories exceed 10% of the current total budget
• inclusion of costs requiring prior approval, as directed by the OMB Cost Principles
• under non-construction projects: contracting out, sub-granting, or otherwise obtaining the services of a third party to perform activities central to the purposes of the award

Your GTR may make the following approvals by letter:

• transfer of funds between direct and indirect cost categories
• transfer of funds allotted for training allowances (direct payment to trainees) to other expense categories
• unless described in the application and funded in the approved award, the sub-award, transfer, or contracting out of any work under the award

Time Extensions. If you will not be able to complete the project within the original project period, it is important that you discuss the situation with your GTR as soon as possible. Grantees may request an extension by submitting a written request to the GTR at least 10 days before the expiration date for non-profit organizations and institutions of higher education governed by 24 CFR Part 84; and no later than 60 days prior to the expiration date for State and local governments governed by 24 CFR Part 85. Your request should provide information regarding the reason why the project will not be completed on time and why it is necessary to continue the project. The request should also specify the additional length of time needed for completion.

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16. What happens when the project is completed?

Closeout instructions are provided in the Closeout Guidance Manual. It is HUD's policy that all assistance agreements be closed within 180 days of the project end date or completion of the project. You have 90 calendar days after the project is completed to submit all the required financial, performance, and any other reports or deliverables. During this closeout process, any excess funds paid to you must be returned to HUD. Contact your GTR for guidance if you need to return money to HUD. Any funds undisbursed funds will be deobligated with an amendment to your grant. When all close out requirements have been satisfied, the HUD Grants Office will issue a final letter to notify you that the grant is officially closed.

17. What should I expect if my grant is reviewed or audited?

Non-Federal entities that expend $300,000 ($500,000 for fiscal years ending after December 31, 2003) or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with OMB Circular A-133. Separate from the official audit, as part of HUD's oversight of your assistance agreement, your project may be selected for a review and/or an audit. The review or audit could occur either during the course of the project or as part of the final close-out phase of the grant. Generally, the reviews and audits completed by HUD. Part of this responsibility may include the on-site review of your administrative operations. The overall purpose of an on-site visit by HUD is to:

When the review is complete, a report will be issued to your organization detailing any concerns and recommendations. Your GTR will work with you to resolve those concerns.

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