GRANT ADMINISTRATION

Symposium on HomelessnessHomeless in the Heartland

August 2013

Financial Management

SHOW ME THE MONEY

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Financial Grant Management

Grant AgreementApplicationCertificationsProgram RegulationsApproved BudgetUniform Administrative

RequirementsOMB Circulars

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Uniform Administrative Requirements

For each type of recipient, there is a set of Federal principles, called Uniform Administrative Requirements, which determine allowable costs for grants. 24 CFR part 84 –Institutions

of Higher Education, Hospitals, and Other Non-Profit Organizations;

24 CFR part 85 –State, Local, and Federally Recognized Indian Tribal Governments

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OMB Circulars

In Addition, the Office of Management and Budget (OMB) publishes the allowable costs for all grant recipients in their Circulars.

2 CFR part 230 - Cost Principles for Non-Profit Organizations (OMB CircularA-122)

2 CFR part 225 – Cost Principles for State, Local and Indian Tribal Governments (OMB Circular A-87)

Drawing Funds

Drawing funds to reimburse the recipient for eligible costs incurred and already paid…..OR

Drawing funds for eligible costs incurred but not yet paid.

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Tips on Drawing Funds

Draw consistently (develop a process to draw every month or at a minimum every quarter)

Draw the pennies (VRS will let you draw cents, so be a * and draw the exact amount you need)

Track exactly what costs are being paid with the drawn funds

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Source Documentation

Utility BillsSupply InvoicesMaintenance

ReceiptsEquipment

ReceiptsLeasesInsurance BillsCost AllocationsTime Sheets

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More Documentation

Tenant Rent Calculations and PaymentsTIME SHEETS (Detailed as possible, i.e.

client #s, description of work performed, budget item charged, etc)

Transportation LogsContracts with providers

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What This Grant Reviewer Likes To See

Well organized files – I really like to ask and receive all documentation for a particular draw in one bundle

Spreadsheets – I feel the love when I see spreadsheets with real time data tracking expenses and payments by approved budget line items.

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Policies and Procedures

Policies – Write it Down! Organize It! Share it with Staff!

Policies/Procedures I ask about on Monitoring Review (Questions on Checklist)1. Recording Financial Transactions/Accounting

Manual/Chart of Accounts2. Authority for Approving Financial Transactions3. Controlling Expenditures/Purchasing

Requirements/Travel Authorizations4. Maintenance of Accounting Records

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Documenting Match

The match requirements under the CoC Program interim rule are simplified from the SHP and the S+C program.

All eligible funding costs, except leasing, must be matched with no less than a 25 percent cash or in-kind contribution.

No match is required for leasing. Resident Rent can no longer be used for match.

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Documenting Match

Cash Sources May use funds from any source, including any other

federal sources (excluding Continuum of Care program funds), as well as State, local, and private sources, provided that funds from the source are not statutorily prohibited to be used as a match.

Must ensure that any funds used to satisfy the matching requirements of this section are eligible under the laws governing the funds in order to be used as matching funds for a grant awarded under this program.

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Documenting Match

In-KindFor an in-kind match, the value of property,

equipment, goods, or services contributed to the project may be used, provided that, if such items were paid for with grant funds, the costs would have been eligible.

If third-party services are to be used as a match, the recipient or subrecipient and the third-party service provider that will deliver the services must enter into a memorandum of understanding (MOU)—before the grant is executed.

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Documenting Match

Keep records of the source and use of cash and in-kind contributions used to satisfy the 25 percent match requirement (24 CFR part 578.73).

Match records must indicate the grant and fiscal year for which each matching contribution is counted.

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Questions

Environmental Reviews & Continuum of Care

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Does My Grant Require An Environmental Review?

All grants require an Environmental Review 24 CFR 578.31 (CoC Program)

24 CFR 583.230 (SHP Program)

24 CFR 582.230 (S+C Program)

24 CFR 576.407(d) (ESG Program)

A responsible entity (RE) (Part 58) or HUD (Part 50) must complete the review and make a determination of the level of review.

The RE must create an environmental review record with verifiable resources and documented findings for each project.

A non-profit may not act as an RE.

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Responsible Entities

Responsible Entity Certifying Officer Evaluates the environmental

review Is responsible for scope and

content Makes environmental finding Goes to court in a lawsuit

Responsible Entity (RE) assumes federal responsibilities

RE = a unit of general local government, tribe or State

What Is an Environmental Review?

Analysis of the impact of a project on the surrounding environment and vice versa

Ensures that HUD-funded projects provide decent, safe, and sanitary housing

MUST be conducted BEFORE funds are committed

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HUD’s Environmental Regulations

24 CFR 50 – HUD Review Environmental review requirements for

HUD staff24 CFR 51 – Manmade Hazards

Noise Explosive or Flammable Hazards Runway Clear Zones

24 CFR 55 – Floodplains & Wetlands 24 CFR 58 – Local Government Review

Environmental review requirements for units of general local government (“Responsible Entity”/”RE”)

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Part 58 vs Part 50

Part 58Program legislation

permits local government to conduct ER

RE certifying that environmental review is complete

Accepts comments. After public comment period, RE applies to HUD for release

HUD authorizes release of funds

Part 50 HUD conducts

environmental review HUD determines that

local government does not have capacity or refuses to accept responsibility for review

Grantee may collect any information required to complete the review from applicant, as long as HUD staff remain responsible for accuracy of the review

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When Part 50 Reviews Are Required

“If a responsible entity, other than a recipient, objects to performing an environmental review... HUD may designate another responsible entity to conduct the review in accordance with this part or may itself conduct the environmental review in accordance with the provisions of 24 CFR part 50.” (24 CFR 58.11(d))

HUD assumes responsibilities for environmental reviews for SNAPS projects only where (1) a nonprofit is the recipient and (2) no responsible entity can be found.

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Level of Review

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Environmental Impact Statement

Environmental Assessment

Categorically Excluded Subject to 58.5/50.4

Categorically Excluded Not Subject to 58.5/50.4

Exempt

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Reference Guide for CoC Program Component Levels of Review

Levels of environmental review:

EXEMPT : Subject to §58.6

CENST : Categorically Excluded, Not Subject to §58.5 (Still subject to §58.6)

CEST : Categorically Excluded, Subject to §58.5 (Also subject to §58.6)

EA : Environmental Assessment (May require an Environmental Impact Statement (EIS) if any conditions in §58.37 apply; also subject to §58.5 and §58.6)

* Where the Level of Environmental Review is labeled as “EXEMPT or CENST” the responsible entity has the discretion to determine whether the activity is more appropriately categorized as an activity listed at §58.34(a)(4) (Exempt) or §58.35(b)(2) (CENST). Part 50 does not include an EXEMPT category – all applicable activities should be categorized as CENST.

CoC Program Components and Activities Level of Environmental Review Applicable §58/§50 Citations

PERMANENT HOUSING (including PSH & RRH) & TRANSITIONAL HOUSING

Acquisition (§578.43), Leasing (§578.49), Sponsor-Based Rental Assistance, & Project-Based Rental Assistance (§578.51(d), (e))

CEST (If your project includes acquisition, leasing, sponsor-based rental assistance or project-based rental assistance, the level of environmental review increases to CEST.) §58.35(a)(5) §50.20(a)(4)

New construction (§578.47, 578.37)

CEST (If your project includes: a) new construction of up to 4 housing units with maximum of 4 units on any one site; or b) 5 or more housing units on scattered sites 2,000 ft. apart and not more than 4 units on any one site, the level of environmental review increases to CEST.)

§58.35(a)(4)(i); §58.35(a)(4)(ii)

§50.20(a)(3)(i); §50.20(a)(3)(ii);

EA (If your new construction project does not meet the criteria at §50.20(a)(3) or §58.35(a)(4), the level of environmental review increases to EA.) §58.36 §50.16

Tenant-Based Rental Assistance (§578.51(c)) CENST §58.35(b)(1) §50.19(a)(11)

Rehabilitation (§578.45)

CEST (Required for rehabilitation projects that do not result in a change in land use or will not change the size or capacity by more than 20 percent)

CEST: §58.35(a)(3)

CEST: §50.20(a)(2)

EA (Required for rehabilitation projects where the criteria at §50.20(a)(2) or §58.35(a)(3) are not met.)

§58.36 §50.16

Supportive Services (§578.53) EXEMPT or CENST* §58.34(a)(4) or §58.35(b)(2)

§50.19(a)(4) §50.19(a)(12)

Operating Costs (except repair and scheduled payments to a reserve for replacement of major systems of housing) (§578.55)

CENST §58.35(b)(3) §50.19(a)(13)

REFERENCE GUIDE FOR COC LEVELS OF REVIEW

Limited Scope Environmental Reviews

Used for leasing, project-based rental assistance

Require minimal analysis:1. Coastal Barrier Resources2. Coastal High Hazard

Area, Floodway, and Floodplain

3. Toxic Hazards

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Conducting a Limited Scope Review

HUD will request information for each site from recipient using the new form.

HUD will review the information and documentation and confirm that project conforms to HUD’s environmental policies.

HUD will certify the review.

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Request & Review Info from Recipient

Coastal Barrier Resources and Coastal High Hazard Areas

Coastal Barrier Resources Long, narrow islands and back bay barriers – the first line of defense for storm surges.

Coastal High Hazard Areas (V Zone): area subject to high velocity waters from hurricanes or tsunamis.

HUD will reject any project located in the Coastal Barrier Resources System or Coastal High Hazard Areas.

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Floodways and Floodplains

Floodways: portion of floodplain which is effective in carrying flow, where the flood hazard is generally greatest, and where water depths and velocities are highest.

100-Year Floodplains: areas where each year there is a 1 percent chance of flooding. Being in these areas puts people at risk

HUD will reject any project located in a Floodway and may reject projects in 100-year floodplains.

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Example of a FIRM34

Toxic Chemicals and Radioactive Material

It is HUD policy that all property proposed for use in HUD programs be free of hazardous materials, contamination, toxic chemicals and gases, and radioactive substances, where a hazard could affect the health and safety of occupants or conflict with the intended utilization of the property

24 CFR 50.3(i) & 58.5(i)(2)

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A report of nearby toxic sites using EPA’s mapping service at http://www.epa.gov/enviro/index.html or similar service

Examples of Site Contamination

Landfills

Underground Tanks

Unexplained dirt piles

Buried Waste

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Take-Away Messages

All grants require an environmental reviewFunds cannot be committed, obligated, or

expended prior to the completion of the environmental review.

The RE must create an environmental review record with verifiable resources and documented findings for each project.

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Questions

Emergency Solutions Grant

[ESG]RENT REASONABLENESS AND FAIR MARKET RENT

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Rent Reasonableness And Fair Market Rent

Does not exceed the Fair Market Rent (FMR) established by HUD for each geographic area; and

Complies with HUD’s standard of rent reasonableness.

This requirement is in the ESG program Interim Rule at 24 CFR 576.106(d).

ESG allows short-and medium-term rental assistance to be provided to eligible program participants only when the rent, including utilities (gross rent), for the housing unit:

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Rent Reasonableness And Fair Market Rent

HPRP & ESG: Key Difference

HPRP: Rent must meet rent reasonableness standards.

ESG: Rent must meet rent reasonableness standards and cannot exceed HUD’s published FMRs for the area.

In some communities, the reasonable rent for a specific unit may be lower than the FMR that has been established for the community.

Bottom line: The rent for the unit assisted with ESG funds must not exceed the lesser of the FMR or the rent reasonableness standard.

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Calculating the Gross Rent

To calculate Gross Rent: Total contract rent amount of the

unit Add any fees required for occupancy

under the lease (excluding late fees and pet fees)

Add the monthly utility allowance

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What Is The FMR Requirement

HUD establishes FMRs to determine payment standards or rent ceilings for HUD-funded programs that provide rental assistance

Published annually for metropolitan areas and non-metropolitan county areas.

Published on October 1 each year

www.huduser.org/portal/datasets/fmr.html

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What Is The Rent Reasonableness Requirement

HUD’s rent reasonableness standard is designed to ensure that rents are reasonable in relation to rents for comparable unassisted units in the same market.If a rent reasonableness determination

supports a lower rent, then ESG funds may not be used to rent the unit (unless the landlord is willing to lower the rent). ESG funds could be used to assist the program participant to move to a different unit.

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Determining and Documenting Rent Reasonableness

Recipients are responsible for determining what documentation is required in order to ensure the rent reasonableness standard is met.

A market study of rents.

Advertisements for comparable rental units.

Written verification signed by the property owner, on letterhead, affirming that the rent is comparable to current rents charged for similar unassisted units managed by the same owner.

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Determining and Documenting Rent Reasonableness

Recipients must establish their own written policies and procedures for documenting comparable rents and ensure that they are followed when documenting rent reasonableness in the case file.

A sample “Rent Reasonableness Checklist and Certification” form is available at:

www.hud.gov/offices/cpd/affordablehousing/library/forms/rentreasonablechecklist.doc

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Determining and Documenting Rent Reasonableness

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Determining and Documenting Rent Reasonableness

Before conducting its own study of rent levels, a recipient/subrecipient should consult existing sources of rental housing data that can be used to establish comparable rents. Public Sources (PHA, Chamber) Real estate advertisements and contacts Rental market study Rental market survey Rental database

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Rural Housing Data Sources

While there may be fewer rental units in rural areas than in urban and suburban areas, it is possible to find comparable rents for different unit types located in these areas using various data sources, including: U.S. Department of Agriculture’s Rural

Development Agency (USDA) PHAs Real estate agents

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Components Of An Effective Policy

Policies and procedures must be transparent and consistently applied across the program, and result in decisions that comply with HUD requirements. At a minimum, an effective policy includes:

methodology,

documentation requirements,

staffing assignments, and

strategies for addressing special circumstances.

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Components Of An Effective Policy

Policies and procedures should provide step-by-step guidance on making comparisons between the program participant’s rent, the FMR, and the rent reasonableness standards for comparable units in that community.

This includes the documentation to be included in each case file, such as forms and/or case notes.

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Questions