Section 8.1: Grant Documentation and Implementation

New Grants

Once a funding decision is made by HUD, the grant recipient is sent a letter of conditional approval. The following documentation should be included with the letter:

  • Three copies of the grant agreement;
  • A copy of 24 CFR 582, the S+C program regulations;
  • A copy of the Grantee Financial Instructions;
  • Drawdown instructions and application forms for the Line of Credit Control System (LOCCS);
  • A copy of the Sponsor Tax Identification Form (if there is an SRA component);
  • HUD - 7015.15 - Request for Release of Funds and Certification; and
  • "Standard Issues and Conditions for Shelter Plus Care Grants" (if appropriate).

Grant Implementation

Along with the letter of conditional approval for a S+C grant, the grantee may receive a description of specific issues and/or conditions that apply to the grant. Issues are features of the grant that HUD identifies as items of concern for Field Office monitoring. Conditions require a response by the grantee prior to grant execution. The grantee must address any identified conditions in order to execute the grant agreement and begin implementing the program.

Start Up Conference

The HUD Field Office usually holds a start up conference for new S+C grantees. Sponsors that will be actively involved in implementing the program should attend the start up conference as well. But, keep in mind that it is the grantee that HUD will look to as the responsible party if difficulties arise with the grant.

Timless of Implementation

Timely implementation of a S+C project is important to ensure that the S+C funds are spent within the grant period.

Within one year of grant award announcement by HUD3:

  • For TRA, SRA, and PRA without rehabilitation components, rental assistance must begin.
  • For the PRA with rehabilitation component, rehabilitation must be completed.

Different rules govern the SRO component. For this component, the rehabilitation work must be completed and the Housing Assistance Payments contract must be executed within one year of the public housing authority's execution of the Annual Contributions Contract.

Grantees should regularly - preferably on a monthly basis - request reimbursement for all rental assistance payments. In addition, grantees should regularly draw down funds for eligible S+C administrative activities. However, under no circumstances should more than three months pass without a drawdown. The Congress and HUD pay close attention to spend-out rates for all programs, and low spend-out rates will call into question the need for continued funding of a particular program.

Planning for Acquisition and Rehabilitation in Advance

Under the PRA and SRO components, S+C grantees must locate property and finance rehabilitation efforts prior to leasing up units. Keep in mind that S+C funds should not be used as "seed money" for property rehabilitation or new construction that cannot be completed within 12 months of grant announcement by HUD. Therefore, it is important that grantees select a property and secure the upfront rehabilitation or construction funding even before receiving approval for their S+C application. Of course, these initial acquisition and rehabilitation costs must be paid for with funds other than S+C.

Program Changes

Occasionally, after an S+C program is underway, it may be necessary to alter the program to accommodate unanticipated changes.

When the change is significant, the S+C grantee must get written approval from HUD. Some examples of significant changes include:

  • A change in sponsor;
  • A change in project site for the SRO or PRA with rehabilitation component projects; or
  • A change in the target population to be served.

Other program modifications, such as increasing the number of participants served, do not require HUD approval. However, these changes should be documented and kept on file.

Whenever a grantee wishes to alter its S+C project, it should contact the HUD Field Office to make sure all parties understand what changes are being made and what documentation is necessary.

The HUD Field Office is also responsible for handling extensions of S+C grants. But it is the grantee who has primary responsibility for determining whether it needs to request an extension and for submitting the request well in advance of the grant expiration date. More information about this may be found in Section 7.

Deobligation of Funds

It is HUD's responsibility to enforce the obligations outlined in the grant agreement and to recapture S+C funds awarded to a grantee, if necessary.

Some occasions when HUD may consider deobligating all or part of a grantee's S+C funds include:

  • If the grantee does not meet timeliness standards as described in this section. An exception can be made when HUD determines that the delay was due to "factors beyond the control of the grantee."
  • If the housing proposed in the application is not provided in accordance with the approved application or HUD regulations.
  • If the proposed supportive services are not provided in accordance with the approved application or HUD regulations.

Note: Details of the deobligation of funds are outlined in 24 CFR 582.410 of the S+C regulations.

Waivers

At HUD's discretion, some activities required under the S+C regulations may be waived for "good cause." Examples of this include:

  • Participation of homeless individuals in policy and decision-making. If waived, a plan must be submitted to, and approved by, HUD to ensure that efforts will be made to consult with homeless or formerly homeless individuals whenever possible in decision-making.
  • Capping administrative costs at 8 percent of grant. During an extension period following expiration of the initial 5- or 10-year grant term, HUD will consider requests to waive the 8 percent limit and raise it proportionately to reflect the additional time necessary to expend the rental assistance.

Regulations Governing Religious Organizations

While HUD programs in general and homeless assistance programs in particular have been very successful in partnering with faith-based organizations, certain cross-cutting safeguards exist in order to ensure that these programs meet constitutional or legal requirements. Consequently, a grantee must provide the housing and services in a manner that is free from religious influences and will not:

  • Discriminate against an employee or applicant for employment or give preference on the basis of religion.
  • Discriminate against any person applying for housing or supportive services or give preference on the basis of religion.
  • Provide religious counseling or instruction, conduct religious worship or services, engage in religious proselytizing, or exert religious influence in the provision of housing and supportive services.

Provided the above rules are followed, a grantee funded by HUD can contract with a primarily religious organization, or a secular organization established by a primarily religious organization, to provide housing and supportive services to S+C participants.

A full description of rules governing religious organizations is detailed in 24 CFR Part 582.115.

Other OMB Requirements

The following OMB Circulars apply to the S+C program:

  • A-87 (Cost Principles for State, Local Governments) - Provides principles and standards for establishing a uniform approach to determining allowable costs and promoting effective program delivery for Federal Awards.
  • A-110 (Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations) - Provides standards for obtaining consistency and uniformity among Federal agencies in the administration of grants and agreements.
  • A-122 (Cost Principles for Nonprofit Organizations) - Clarifies the breakdown of indirect costs, and defines the cost principles for non-profits.
  • A-133 (Audits of States, Local Governments, and Non-Profit Organizations) - Describes the standards for obtaining consistency among Federal agencies for the audit of States, local governments, and non-profits receiving Federal awards.

Information regarding the additional regulations listed below can be found in the sections indicated:

Notes

Note: For more information on property acquisition and financing, refer to Chapter 3 of HUD's guide, "Enhancing Shelter Plus Care Program Operations."

Copies of OMB Circulars may be found on HUDClips. Click on "OMB Circulars," then search according to circular number.

3The phrase 'Initial announcement of the grant award' refers to the date of the initial award notification letter from HUD Headquarters which coincides with the date of the formal public announcement. Back