[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.503]

[Page 133-134]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 570_COMMUNITY DEVELOPMENT BLOCK GRANTS--Table of Contents
 
                     Subpart J_Grant Administration
 
Sec. 570.503  Agreements with subrecipients.

    (a) Before disbursing any CDBG funds to a subrecipient, the 
recipient shall sign a written agreement with the subrecipient. The 
agreement shall remain in effect during any period that the subrecipient 
has control over CDBG funds, including program income.
    (b) At a minimum, the written agreement with the subrecipient shall 
include provisions concerning the following following items:
    (1) Statement of work. The agreement shall include a description of 
the work to be performed, a schedule for completing the work, and a 
budget. These items shall be in sufficient detail to provide a sound 
basis for the recipient effectively to monitor performance under the 
agreement.
    (2) Records and reports. The recipient shall specify in the 
agreement the particular records the subrecipient must maintain and the 
particular reports the subrecipient must submit in order to assist the 
recipient in meeting its recordkeeping and reporting requirements.
    (3) Program income. The agreement shall include the program income 
requirements set forth in Sec. 570.504(c). The agreement shall also 
specify that, at the end of the program year, the grantee may require 
remittance of all or part of any program income balances (including 
investments thereof) held by the subrecipient (except those needed for 
immediate cash needs, cash balances of a revolving loan fund, cash 
balances from a lump sum drawdown, or cash or investments held for 
section 108 security needs).
    (4) Uniform administrative requirements. The agreement shall require 
the subrecipient to comply with applicable uniform administrative 
requirements, as described in Sec. 570.502.
    (5) Other program requirements. The agreement shall require the 
subrecipient to carry out each activity in compliance with all Federal 
laws and regulations described in subpart K of these regulations, except 
that:
    (i) The subrecipient does not assume the recipient's environmental 
responsibilities described at Sec. 570.604; and
    (ii) The subrecipient does not assume the recipient's responsibility 
for initiating the review process under the provisions of 24 CFR part 
52.
    (6) Suspension and termination. The agreement shall specify that, in 
accordance with 24 CFR 85.43, suspension

[[Page 134]]

or termination may occur if the subrecipient materially fails to comply 
with any term of the award, and that the award may be terminated for 
convenience in accordance with 24 CFR 85.44.
    (7) Reversion of assets. The agreement shall specify that upon its 
expiration the subrecipient shall transfer to the recipient any CDBG 
funds on hand at the time of expiration and any accounts receivable 
attributable to the use of CDBG funds. It shall also include provisions 
designed to ensure that any real property under the subrecipient's 
control that was acquired or improved in whole or in part with CDBG 
funds (including CDBG funds provided to the subrecipient in the form of 
a loan) in excess of $25,000 is either:
    (i) Used to meet one of the national objectives in Sec. 570.208 
(formerly Sec. 570.901) until five years after expiration of the 
agreement, or for such longer period of time as determined to be 
appropriate by the recipient; or
    (ii) Not used in accordance with paragraph (b)(7)(i) of this 
section, in which event the subrecipient shall pay to the recipient an 
amount equal to the current market value of the property less any 
portion of the value attributable to expenditures of non-CDBG funds for 
the acquisition of, or improvement to, the property. The payment is 
program income to the recipient. (No payment is required after the 
period of time specified in paragraph (b)(7)(i) of this section.)

[53 FR 8058, Mar. 11, 1988, as amended at 53 FR 41331, Oct. 21, 1988; 57 
FR 27120, June 17, 1992; 60 FR 56915, Nov. 9, 1995; 68 FR 56405, Sept. 
30, 2003]