Section I: Grantee Responsibilities

In this section...

• Who is a Recipient?
• Grantee, Project Sponsor, and Lead Agency Duties
• The Grant Agreement
• Communications with HUD
• Informing HUD of Address, Personnel and Grant Changes
• Recordkeeping
• Guidance on Recordkeeping
• Reporting

States, local governments, private nonprofit organizations or community mental health associations that are public nonprofits, and governmental entities including public housing agencies, may apply for SHP funds in the annual Continuum of Care Homeless Assistance competition. If the applicant is awarded funds, it becomes an SHP grantee with responsibility for ensuring the grant is carried out in accordance with the application and SHP requirements.

Who is a Recipient?

A recipient is any governmental or nonprofit entity that receives assistance under SHP (see section 422(9)) of the McKinney-Vento Act). Recipients include both grantees, which sign a grant agreement with HUD and receive funds directly from HUD, and also project sponsors, who sign a subrecipient agreement with the grantee to receive the funds. The McKinney-Vento Act imposes responsibilities on recipients. HUD will look to its grantee to either perform those responsibilities or to ensure that the project sponsor performs them. Examples of responsibilities that project sponsors may perform are site control and providing match.

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Grantee, Project Sponsor and Lead Agency Duties

The grantee is a direct recipient of the HUD award. The grantee signs a grant agreement with HUD and receives funds directly. It is the legal entity that HUD will hold responsible if the grant responsibilities are not fulfilled. Sometimes the grantee itself carries out the day-to-day implementation, operation, and administration of the project. A grantee may carry out the entire project itself, it may enter into a subrecipient agreement with a project sponsor to carry out the project, or it may follow procurement procedures to hire contractors to carry out separate project activities.

When the grantee carries out a project through a project sponsor, the grantee is also referred to as the lead agency. The lead agency has the contractual responsibility for ensuring that the project described in the application and Technical Submission is successfully carried out. A lead agency's responsibility encompasses oversight of every aspect of the project, including ensuring funds expended are for eligible activities.

A project sponsor carries out the project described in the application and Technical Submission. Project sponsors may be non-profit organizations and receive grant funds to pay project expenses through the lead agency. The sponsor makes requests for funds and submits annual reports and requests for program changes to the lead agency for consideration. When using these arrangements, HUD recommends that a subrecipient agreement be signed by both parties.

It is the responsibility of the lead agency to process funding requests and to contact the local HUD field office regarding any project changes or issues. Specific goals and activities for each project, as well as record keeping and reporting responsibilities, should be set out clearly in the subrecipient agreement. HUD recommends that project sponsors and grantees set out the duties and obligations of each party in a subrecipient agreement or other document(s) that will govern the relationship between the two entities. See OMB Circulars A-122 and A-87 for more guidance on cost principles.

For more guidance on the project sponsor’s relationship to the grantee, see the general instructions section of the Technical Submission, HUD form 40076-2.

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The Grant Agreement

The grant agreement is the written documentation of the agreement between HUD and the grantee with regard to the project. It is signed by the CPD Director in the local HUD field office and the grantee and establishes the duties and responsibilities of HUD and the grantee. It consists of a short grant agreement form that is used for all SHP grants, that is signed by both parties and that incorporates the application, the technical submission, the certificates and assurances and the program regulations that are in effect at the time the grant is awarded. Any written amendments to the grant agreement become part of it and should be retained with the grant agreement.

Following are the components of the grant agreement:

• Common elements – Elements common to all SHP grants are found on the short grant agreement form and in the regulations. These pages define the parties entering into the grant agreement, project and grantee identification numbers, amount of the SHP award by activity category, and sanctions that HUD may impose for nonperformance.
• Application – The application submitted through the competitive process provides the basic information on what activities will be carried out, how many persons served, etc. HUD may issue comments and/or conditions to an application whenever deficiencies are noted during the competitive review process. Grantees must address these comments and/or conditions before the grant agreement is signed.
• Certifications – The initial application contains several pages of certifications that the Chief Executive Officer of the applicant organization signs.
• Technical Submission – The technical submission is completed by the selectee following award announcement but prior to grant agreement. It establishes the budget lines for SHP-funded grant activities.
• SHP Regulations – Attachment 1 of a grant agreement is a copy of the SHP regulations applicable to the project.
• Amendments – 24 CFR 583.405 allows necessary changes to the project under certain circumstances. If substantial changes are needed, the grantee must request written approval for a grant agreement amendment from HUD prior to initiating the change. See Section R Grant Amendments for more information.

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Communications with HUD

For grantees, your local HUD field office is your direct contact for correspondence. Project sponsors communicate their requests through the grantee.

The key to expediting correspondence with HUD is the inclusion of the project grant number and Project Identifier Number (PIN) as a means of reference. This is especially critical for grantees with multiple project sponsors or projects involving more than one HUD program. A secondary benefit of identifying the grant is the assurance that the letter will be filed correctly for future reference. Please send correspondence requests to the Director of Community Planning and Development (CPD) at the local HUD Office. You may want to add an "Attention" line, indicating the primary CPD contact.

Facsimiles should be addressed in the same manner as regular HUD correspondence. Be sure to include the grant number. Again, you may add an "Attention" line, indicating the primary CPD contact. Electronic messages are handled somewhat differently from regular mail in that they are not normally tracked or assigned a response date. For this reason, if you a requesting a written response to your fax, you should indicate the need for a written response and follow-up the fax with a letter.

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Informing HUD of Address, Personnel and Grant Changes

The following activities require communication in writing with your local field office:

• Grantee or Project Sponsor address change;
• Key personnel changes;
• Grantee or Project Sponsor name change;
• Change to the grant (requiring an amendment); and
• Change of LOCCS users.

If a grantee or project sponsor moves, experiences personnel changes, or has an agency name change, these changes should be sent to the local HUD office using HUD Form 27056, Change of Address Request for processing. For a hardcopy of this form, please contact your local HUD office.

Additionally, when significant staff or board of director changes occur, a grantee must send an update in writing. This ensures that communication is sent to the appropriate individual.

If a grantee has a change to the grant (minor or significant), the change must be documented or requested in writing, as discussed in Section R Grant Amendments.

For changes in financial access or LOCCS users, a grantee should contact the local HUD office for the forms required for transferring financial responsibility. See Section R Grant Amendments for more guidance on this topic.

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Recordkeeping

All grantees must maintain complete, up-to-date project records and written procedures to be used in carrying out the project. Grantees should have written procedures describing the duties of key employees, project documentation and financial documentation.

See the table below for some recommendations on recordkeeping.

Recordkeeping Recommendations
Duties of key employees	Organization chart showing lines of responsibility Directions for recording financial transactions, including approval authority Maintenance of accounting records Record retention and security Cash management Property controls Procurement Cost allocation plans
Project documentation demonstrating	Participant eligibility, income and rent calculations, and service provision Match for acquisition, rehabilitation, new construction, operating, supportive service and HMIS grants Compliance with other Federal requirements, such as lead-based paint or relocation Progress toward meeting established goals
Financial documentation demonstrating	Eligibility of project expenses Adequate internal controls Timely use of cash from the SHP grant Compliance with procurement standards Compliance with audit requirements
Project information	Approved application, Technical Submission, and any amendments Grant agreement and any amendments Programmatic guidance and regulations Correspondence with HUD

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Guidance on Recordkeeping

Since grantees are responsible for ensuring compliance by their project sponsors, it is recommended that grantees maintain up-to-date and thorough information on its projects. Grantees should develop:

• A tracking system – This master file should contain information tracking the status of each project from notice of award through Technical Submission, grant agreement, development activities, start of operations, amendments, end of operations, and renewal. It should also show dates of submission of APRs, audits, and required monitoring remedies/sanctions. (See more discussion below.)
• Project Grant Files – One file is used for each project. Items such as the original application, HUD award notification letter, Technical Submission, grant agreement (with regulations attached), subrecipient agreement, any amendments, site control documentation, any appraisals, and correspondence are in this file.
• Project Monitoring Files – One file is used for each project. This file contains the project's narrative from approved application, organizational chart, monitoring findings and responses, APRs with associated correspondence, and any project-specific policy and procedure information.
• Match documentation – One file is used for each project. This file tracks the project’s eligible SHP activities, grantee cash expended, matching funds committed in the technical submission and actual match amounts received. For more guidance, see the Tracking Match Requirements guide in SHP Self-Monitoring Tools.

Following a monitoring visit, the grantee needs to track violations or deficiencies in the tracking system and insert documentation into the project's monitoring file. In the tracking system, tracking elements could, at a minimum, include:

• The reviewer's name;
• Grantee name and contact information;
• Project sponsor name and contact information;
• Date of on-site visit;
• Areas of compliance selected for review;
• Date of final assessment report; and
• Findings and issues to resolve.

A grantee also needs to track the receipt of APRs and Logic Models and their approvals. Elements could, at a minimum, include:

• Grantee name and contact information;
• Project sponsor name and contact information;
• Operating start date;
• Date of reminder notice;
• APR due date;
• Date of overdue notice, if applicable;
• Date received;
• Dates of any interim correspondence regarding requests for additional information, if applicable;
• Date of approval letter; and
• Date APR was submitted to local HUD office.

For more guidance on grantee responsibilities and tools you can use, see Section P Technical Assistance.

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Reporting

Grantees must report on their progress each year in the Annual Progress Report and HUD approved Logic Model. APRs are due to the HUD field office within 90 days of the end of the project's operating year. More information on APRs is in Section N Annual Progress Reports.

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