[Code of Federal Regulations]
[Title 44, Volume 1]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 44CFR206.365]

[Page 488-489]
 
              TITLE 44--EMERGENCY MANAGEMENT AND ASSISTANCE
 
 CHAPTER I--FEDERAL EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF HOMELAND 
                                SECURITY
 
PART 206_FEDERAL DISASTER ASSISTANCE FOR DISASTERS DECLARED ON OR AFTER 
 
                   Subpart K_Community Disaster Loans
 
Sec.  206.365  Loan administration.

    (a) Funding. (1) FEMA will disburse funds to the local government 
when requested, generally in accordance with the Schedule of Loan 
Increments in the Promissory Note. As funds are disbursed, interest will 
accrue against each disbursement.

[[Page 489]]

    (2) When each incremental disbursement is requested, the local 
government shall submit a copy of its most recent financial report (if 
not submitted previously) for consideration by FEMA in determining 
whether the level and frequency of periodic payments continue to be 
justified. The local government shall also provide the latest available 
data on anticipated and actual tax and other revenue collections. 
Desired adjustments in the disbursement schedule shall be submitted in 
writing at least 10 days prior to the proposed disbursement date in 
order to ensure timely receipt of the funds. A sinking fund should be 
established to amortize the debt.
    (b) Financial management. (1) Each local government with an approved 
Community Disaster Loan shall establish necessary accounting records, 
consistent with local government's financial management system, to 
account for loan funds received and disbursed and to provide an audit 
trail.
    (2) FEMA auditors, State auditors, the GAR, the Regional Director, 
the Associate Director, and the Comptroller General of the United States 
or their duly authorized representatives shall, for the purpose of 
audits and examination, have access to any books, documents, papers, and 
records that pertain to Federal funds, equipments, and supplies received 
under these regulations.
    (c) Loan servicing. (1) The applicant annually shall submit to FEMA 
copies of its annual financial reports (operating statements, balance 
sheets, etc.) for the fiscal year of the major disaster, and for each of 
the 3 subsequent fiscal years.
    (2) The Headquarters, FEMA Office of Disaster Assistance Programs, 
will review the loan periodically. The purpose of the reevaluation is to 
determine whether projected revenue losses, disaster-related expenses, 
operating budgets, and other factors have changed sufficiently to 
warrant adjustment of the scheduled disbursement of the loan proceeds.
    (3) The Headquarters, FEMA Office of Disaster Assistance Programs, 
shall provide each loan recipient with a loan status report on a 
quarterly basis. The recipient will notify FEMA of any changes of the 
responsible municipal official who executed the Promissory Note.
    (d) Inactive loans. If no funds have been disbursed from the 
Treasury, and if the local government does not anticipate a need for 
such funds, the note may be cancelled at any time upon a written request 
through the State and Regional Office to FEMA. However, since only one 
loan may be approved, cancellation precludes submission of a second loan 
application request by the same local government for the same disaster.