Section M: Financial Management

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Grantees are required to follow cost principles as set forth in OMB Circulars A-122 and A-87. They also must have a functioning accounting system operated in accordance with generally accepted accounting principles or designate a qualified entity to maintain a functioning accounting system in accordance with generally accepted accounting principles.

HUD encourages grantees to become familiar with the relevant OMB Circulars and regulations regarding financial management.

Section M: Frequently Asked Questions

  1. May funds be moved between projects in a Continuum?

    No. Funds may not be reallocated either within a continuum or between any groups of projects. The McKinney-Vento Act requires HUD to conduct a national competition to select among applicants and projects for funding. The applicant commits to carry out a specific project and HUD evaluates the capacity of that applicant as well as the desirability of the project as part of the selection process. No portion of the funds awarded to any project can be moved to another project (as may occur among projects funded through the CDBG program).

  2. Is it possible for a Field Office to “reprogram” funds to allow a grantee to undertake additional activities with excess grant funds?

    Grantees may change their projects to add, change or remove budget line items (i.e., case management) within an eligible activity (i.e., supportive services) as their project develops. However, any excess funds remaining after the grant expires are deobligated per the regulations at 24 CFR 583.410 . Also see 24 CFR Parts 84 and 85 for further provisions.

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