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U.S. Department of Housing and Urban Development

Public and Indian Housing

Special Attention of: **Notice:PIH 2000-44(TDHEs)**

ONAP Administrators; Issued: September 19, 2000

Tribes; and Tribally Expires: September 30, 2001

Designated Housing

Entities Cross Reference: 24 CFR Part 1000

Subject: Line of Credit Control System/Voice Response System (LOCCS/VRS)
for the Indian Housing Block Grant Program

**1.** **Purpose**: This Notice provides specific guidance on the use of
the Line of Credit Control System (LOCCS) and the Voice Response System
(VRS) for the Indian Housing Block Grant (IHBG) Program. The Notice
includes guidance for both the grant recipient and Office of Native
American Programs (ONAP) staff. This Notice includes minor changes to
the previous notice to bring the information current.

**2.** **Background**: The IHBG Program is authorized by the Native
American Housing Assistance and Self-Determination Act of 1996 (NAHASDA)
and the regulations governing the program that are found at 24 CFR Part
1000. This Notice provides program-specific guidance for the IHBG
Program area created in LOCCS. General(non-program specific) guidance is
provided in the LOCCS User Guide. (The most recent publication of the
LOCCS User Guide is October 1996 and is the Guide referenced thorough
out this notice.) A previous LOCCS Notice was published on June 26, 1998
and reinstated on August 19, 1999 (PIH 98-36 (ONAP)).

**3. Overview**: LOCCS is an automated payment system used by HUD to
provide grant recipients with a convenient system for requesting funds.
The system allows for timely disbursements and accountability of funds.
LOCCS provides ONAP with a method of establishing payment thresholds and
reviewing the history of payments to the grant recipient. The grant
recipient uses the LOCCS/VRS to requisition grant funds as needed with a
touch-tone telephone.

**4. Program Guidance**:

a.  **Program Area:** Each program within LOCCS has a three or
    four-character program area identifier code. The LOCCS program area
    code for the Indian Housing Block Grant Program is **IHBG**. Grant
    recipients will note this code is preprinted in block 2 of the
    LOCCS/VRS Indian Housing Block Grant Payment Voucher, form
    HUD-50080-IHBG (Attachment 1). ONAP staff will use this code at the
    initial sign-on screen in LOCCS for access to the IHBG Program area.

b.  **VRS Number:** Each grant established in LOCCS is automatically
    assigned a unique 10-digit number. This number is used by the grant
    recipient in the LOCCS/VRS to specify which grant is being accessed.
    The LOCCS VRS number format is **#####-\*\*@@@**, where:

  --------------- -------------------------------------------------------
  **\#####**      represents a base number assigned by LOCCS to the
                  recipient.

  **\*\***        is a numeric code assigned by LOCCS to the program
                  area. The numeric code for the IHBG program area is
                  **79**.

  **@@@**         is a sequential number beginning with 001 representing
                  the number of grants assigned to the recipient within
                  the program area.

  The VRS number  
  is generated by 
  LOCCS after the 
  Area ONAP staff 
  divides the     
  grant funds to  
  one or more     
  specific        
  funding         
  activities.     
  LOCCS           
  automatically   
  generates a     
  letter to the   
  grant recipient 
  notifying them  
  of the assigned 
  VRS number.     
  --------------- -------------------------------------------------------

c.  **Establishing a Grant in LOCCS:** To establish a grant in LOCCS,
    the Funding Approval/Agreement, form HUD-52734-B, (Attachment 2)
    must be submitted to the Chief Financial Office Accounting Center
    (CFOAC) to the following address by the Area ONAP.\
    \
    U.S. Department of Housing and Urban Development\
    CFO Accounting Center\
    PO Box 901013\
    Fort Worth, TX 96101\
    \
    The cfoac will enter the fund obligation amount from the HUD-52734-B
    into the Program Accounting System (PAS). LOCCS will automatically
    retrieve this information from PAS. For a detailed listing of the
    various actions that must take place before a grant is established
    in LOCCS, please refer to pages 2-3 and 2-4 of the LOCCS User Guide.
    NAHASDA Guidances 98-7 (Tribe/TDHE) and\
    98-3A (ONAP) also provide additional details on the various forms
    required for an IHBG project.\
    \
    If the grant recipient is a tribally designated housing entity
    (TDHE) and the TDHE submits an Indian Housing Plan (IHP) for each
    tribe it serves, a HUD-52734-B should be executed for each tribe. If
    the TDHE submits one IHP for all the tribes it serves, a single
    HUD-52734-B should be executed with an addendum identifying the
    tribes and amounts included in the HUD-52734-B. In this case, ONAP
    will use the representative tribe (in agreement with the
    representative tribe for the IHP in the Lotus Notes system) to
    determine the grant number for block 5 of the HUD-52734-B. If the
    TDHE submits one IHP, but provides separate tables within the IHP
    for each tribe it serves, the Area ONAP should contact the TDHE to
    verify whether a single or multiple HUD-52734-B should be executed.

d.  **Budget Line Items:** Disbursements from IHBG will be directed
    against specific funding activities called Budget Line Items (BLIs).
    The BLIs for IHBG are specific to this program and have unique
    four-digit numbers associated with each BLI as follows:

+-----------------+----------------------------------------------------+
| **Line Item     | **Line Item Activity**                             |
| \#**            |                                                    |
+-----------------+----------------------------------------------------+
| **1600**        | **Current Assisted Stock (CAS) Operating           |
|                 | Subsidy** - This BLI identifies the amount of      |
|                 | operating subsidy from the Formula Current         |
|                 | Assisted Stock for each grant recipient as         |
|                 | identified in the formula listing; however,        |
|                 | disbursements from this BLI may be used by the     |
|                 | grant recipient for operating subsidy purposes or  |
|                 | for any other eligible affordable housing          |
|                 | activity.                                          |
+-----------------+----------------------------------------------------+
| **1601**        | > **Investments** - This BLI is used to record the |
|                 | > maximum amount of funds from the grant that may  |
|                 | > be invested. Disbursements from this BLI may be  |
|                 | > used by the grant recipient for investment       |
|                 | > purposes or for any eligible affordable housing  |
|                 | > activity. According to 24 CFR 1000.58(b) and     |
|                 | > 1000.58(f), a grant recipient that demonstrates  |
|                 | > to HUD the capacity to invest IHBG funds may     |
|                 | > invest a portion of its IHBG annual grant. PIH   |
|                 | > Notice 99-4 provides the basis for determining   |
|                 | > if a tribe or TDHE has the administrative        |
|                 | > capacity to invest IHBG funds. Because the       |
|                 | > regulations established a two-year limitation on |
|                 | > the term of the investments, this BLI will be    |
|                 | > used by ONAP to monitor the timing of investment |
|                 | > activity as discussed in item f. below.          |
+-----------------+----------------------------------------------------+
| **1602**        | **IHBG Balance** - This BLI will reflect the       |
|                 | balance of the grant funds (annual grant amount    |
|                 | minus FCAS Operating Subsidy and Investments).     |
|                 | Funds disbursed from this BLI may be used for any  |
|                 | eligible affordable housing activity.              |
+-----------------+----------------------------------------------------+
| **9900**        | **Post Audit Adjustment** - This is a "Protected", |
|                 | "Undisbursable" BLI used to record any funds that  |
|                 | may be recaptured when the grant is "closed-out"   |
|                 | in LOCCS. For additional information on            |
|                 | "Protected," "Undisbursable" BLIs refer to page    |
|                 | 2-8 in the LOCCS User Guide. The "close-out" of    |
|                 | IHBG in LOCCS is discussed in item g. below.       |
+-----------------+----------------------------------------------------+
| While           |                                                    |
| environmental   |                                                    |
| review          |                                                    |
| requirements    |                                                    |
| apply to most   |                                                    |
| IHBG            |                                                    |
| activities, due |                                                    |
| to the nature   |                                                    |
| of the IHBG     |                                                    |
| Program and the |                                                    |
| range of        |                                                    |
| activities that |                                                    |
| may be          |                                                    |
| performed under |                                                    |
| the IHBG, ONAP  |                                                    |
| will not        |                                                    |
| control the     |                                                    |
| release of      |                                                    |
| funds in LOCCS. |                                                    |
| **It is the     |                                                    |
| grant           |                                                    |
| recipient's     |                                                    |
| responsibility  |                                                    |
| to ensure that  |                                                    |
| prior to        |                                                    |
| obligating or   |                                                    |
| expending       |                                                    |
| funds, all      |                                                    |
| environmental   |                                                    |
| review          |                                                    |
| requirements    |                                                    |
| have been met   |                                                    |
| according to 24 |                                                    |
| Parts 50 or 58. |                                                    |
| HUD may, under  |                                                    |
| certain         |                                                    |
| circumstances,  |                                                    |
| choose to limit |                                                    |
| a recipient's   |                                                    |
| access pending  |                                                    |
| completion of   |                                                    |
| the             |                                                    |
| environmental   |                                                    |
| review          |                                                    |
| requirements.** |                                                    |
|                 |                                                    |
| c.              |                                                    |
+-----------------+----------------------------------------------------+

e.  **Grant Thresholds and Edits**

    i.  **BLI Edits** - The three BLIs specific to the IHBG Program
        (1600, 1601, and 1602) have been established with a "hard" edit
        that prevents a grant recipient from exceeding the BLI. The
        LOCCS/VRS will not accept such voucher requests. Because of the
        nature of the IHBG Program and its BLIs, once the budgeted
        amount is reached for either BLI 1600 (CAS Operating Subsidy) or
        BLI 1602 (IHBG Balance) the grant recipient may drawdown funds
        from the other BLI until both BLI 1600 and 1602 are fully
        disbursed. However, if the budgeted amount is reached on BLI
        1601 (Investments) the grant recipient may not draw funds from
        either of the two other BLIs for investment purposes.\
        \
        Area ONAP staff are responsible for dividing the IHBG funds
        between the three BLIs according to 24 CFR 1000.58(f) and
        formula amounts using the F01 screen in LOCCS. If the grant
        recipient has not requested or been approved to invest funds,
        then **no funds** should be put into BLI 1601. Instead all funds
        would be divided according to the preceding instructions for
        BLIs 1600 and 1602.

    ii. **Monthly Thresholds** - The IHBG Program in LOCCS has a monthly
        threshold of 10 percent. If a grant recipient's voucher request
        in LOCCS/VRS would cause the sum of drawdowns for that month to
        exceed 10 percent of the full grant amount, the voucher request
        will be sent to the Area ONAP for review and approval. LOCCS/VRS
        will notify the caller if an Area ONAP review is required before
        a payment can be disbursed. The grant recipient should notify
        the Area ONAP after the voucher has been entered into LOCCS/VRS
        so that the approval may be expedited. In some cases, the Area
        ONAP may request supporting documentation in order to approve
        the request. If the voucher request is for BLI 1601,
        Investments, the Area ONAP will approve such vouchers without
        requesting supporting documentation once verifying that the
        grant recipient has been approved to invest IHBG funds. Because
        of the anticipated size of drawdowns, any voucher that follows
        an investment disbursement will most likely exceed the 10
        percent threshold; therefore, it is suggested that investment
        drawdowns be requested from VRS toward the end of a month.\
        \
        The Area ONAP also has the ability to establish a lower,
        project-specific, monthly threshold using the M09 screen. Area
        ONAPs may only take this action according to 24 CFR 1000.530,
        1000.532, or 1000.538.

f.  **Investments** - According to 24 CFR 1000.58(g), investment of IHBG
    funds may be for a period no longer than two years. Therefore, it is
    the responsibility of the Area ONAP to monitor disbursements from
    BLI 1601 (Investments) and verify that within two years of
    disbursement, the funds have been expended for affordable housing
    activities under section 202 of NAHASDA.

g.  **Control Dates** - The IHBG program area in LOCCS has only one
    control date that is maintained by the Area ONAP, the close-out
    date. The Area ONAP will use the A01 screen to record the close-out
    date when it has received an Annual Performance Report that the
    recipient has designated as the final report and all funds have been
    expended. The close-out date is the date of the Area ONAP's letter
    notifying the recipient the final APR is complete. Entry of the
    close-out date will automatically stop any further disbursements and
    all LOCCS reporting requirements. Any funds remaining in the grant
    will be recaptured by HUD. (It is not anticipated that a project
    will be closed before all funds are disbursed; however, exceptions
    may occur that will require the recapture of funds. This will
    probably occur when pennies remain in a grant but must be accounted
    for to comply with HUD accounting procedures.) Recaptured funds will
    be reflected on BLI 9900, Post Audit Adjustment.

h.  **Reporting Requirements**

    i.  **Federal Cash Transaction Report, HUD-272-I** - According to 24
        CFR 85.41, the HUD-272-I (Attachment 3) must be submitted to the
        Area ONAP within 15 working days of the end of each quarter
        (i.e., April 21^st^, July 21^st^, October 20^th^, and January
        22^nd^). (For more information on this requirement see Notice
        PIH 99-29 (TDHEs)). LOCCS will automatically generate a letter
        for each grant without a close-out date 15 days before the end
        of each quarter, to remind the grant recipient to submit the
        HUD-272-I. The Area ONAP would instruct LOCCS (through the A-18
        screen) to discontinue sending reminder and delinquent letters
        when a HUD-272-I is received that shows all IHBG funds have been
        drawndown from the line of credit and expended. The Area ONAP is
        responsible for entering in LOCCS the receipt date of the form
        using the M10 screen. If the Area ONAP does not acknowledge
        receipt of the HUD-272-I in LOCCS within 30 calendar days after
        the end of the quarter, LOCCS will automatically notify the
        grant recipient that the report is overdue. ONAP may proceed
        with actions according to 24 CFR 1000 Subpart F to address this
        deficiency.

    ii. **Annual Performance Report** - According to 24 CFR 1000.514,
        Annual Performance Reports must be submitted to the Area ONAP
        within 60 calendar days of the end of the grant recipient's
        program year. Because LOCCS cannot perform the following
        functions automatically, the Area ONAPs are responsible for
        notifying the grant recipient before the end of the grant
        recipient's program year to submit the APR covering each grant
        without a close-out date. If the APR is not received by the Area
        ONAP within 60 calendar days of the end of the grant recipient's
        program year, the Area ONAP will notify the grant recipient that
        the report is overdue. ONAP may impose edits on BLIs which
        require documentation that planned expenditures comply with
        NAHSDA statutory and regulatory requirements.

    iii. **General edits --** The normal system set-up establishes edits
         only for the total BLI and for monthly drawdown as discussed
         in i) and ii) above. Under certain circumstances, principally
         for failure to comply with environmental review requirements,
         for failure to submit an acceptable Annual Performance Report,
         or for documented concerns on the part of ONAP regarding the
         use of grant funds, edits may be placed in LOCCS which require
         a recipient to provide supporting documentation to the ONAP
         before funds are released to the recipient. Before imposing
         such edits, ONAP will inform the recipient of the reasons for
         the edits and the documentation required to support future
         drawdown requests.

i.  **Vouchers** - The grant recipient must prepare a voucher for every
    payment request made using LOCCS/VRS. The grant recipient should
    complete items 3-14 of LOCCS/VRS Indian Housing Block Grant Payment
    Voucher, form HUD-50080-IHBG (Attachment 1), before placing the call
    to LOCCS/VRS. During the call, LOCCS/VRS will generate the voucher
    number to be inserted in item 1. All voucher numbers for the IHBG
    Program area begin with the number **079** that has been pre-printed
    on the form HUD-50080-IHBG. For detailed steps and information on
    the LOCCS/VRS call-in process, see pages 4-1 through 4-8 of the
    LOCCS User Guide. The grant recipient must keep the original voucher
    and backup documentation on file to support the drawdown request.
    Copies of the voucher are not to be sent to HUD unless specifically
    requested by the Area ONAP.

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1.  **LOCCS Security:** To gain access to the IHBG Program area in
    LOCCS, all users of either LOCCS or LOCCS/VRS must be authorized for
    that program area. To obtain authorization, the staff person for the
    grant recipient must submit a LOCCS Voice Response System Access
    Authorization, form HUD-27054, (Attachment 4), with the IHBG code in
    block 5a and Indian Housing Block Grant in block 5b. The form must
    specify what type of access is being requested in block 5c (Query
    Only or Drawdown), based on the activities that staff person will
    perform in LOCCS/VRS. If the staff person is requesting access as a
    new user in LOCCS, the form must be notarized. The form should then
    be sent to the Area ONAP for review. The Area ONAP will retain a
    copy and forward the original HUD-27054 to the following address:\
    \
    U.S. Department of Housing and Urban Development\
    Chief Financial Officer, FYM\
    P.O. Box 23774\
    Washington, DC 20026-3774\
    \
    ONAP staff must also request authorization for access to the IHBG
    Program area in LOCCS. To do so, ONAP staff must complete the LOCCS
    Access Authorization Security Form for HUD Staff, form HUD-27054-A.
    (Attachment 5 - This form is available to ONAP staff from HUDCLips.
    Existing users forward the completed form to the address above
    including the IHBG code in block 12 along with the type of access
    requested (see the form instructions for additional information on
    the types of access available). New users must send the completed
    form to the following address:

> Employee Service Center\
> 77 West Jackson Blvd., 22^nd^ Floor\
> Chicago, IL 60604-3507\
> \
> LOCCS will automatically generate a notification letter when the
> request for access has been processed. For additional information see
> pages 3-1 through 3-13 of the LOCCS User Guide.

**6. Banking Information:** If a grant recipient has not previously used
LOCCS, the grant recipient must submit to the Area ONAP a Direct Deposit
Sign-Up, form SF‑1199A (Attachment 6) and a cancelled check or copy of a
cancelled check from the bank account where the funds are going to be
deposited. The Area ONAP will review the form, retain a copy, and then
forward the original SF-1199A and cancelled check to:\
\
U.S. Department of Housing and Urban Development\
CFO National Accounting Center\
P.O. Box 901013\
Fort Worth, TX 76101\
\
The information contained on the form allows for the automatic deposit
of funds requested from LOCCS/VRS. The form identifies the grant
recipient's Tax Identification Number (TIN), bank name, account number,
and the type of account.\
\
Since banking information can be maintained in LOCCS at three different
levels (i.e., TIN, Program Area, or Grant), if a grant recipient has
previously used LOCCS for other programs, an SF-1199A would be used to
establish different banking information specific to either the IHBG
Program area or to the grant itself. To establish banking information
specific to the IHBG Program area, specify IHBG in Section 1, block G of
the SF-1199A. If a grant recipient wishes to have banking information
specific to a project or projects, the project number(s) must be listed
in Section 1, block G or on an attachment to the SF-1199A. See pages 2-1
through 2-5 of LOCCS User Guide for further information.\
\
NOTE: The Area ONAP will mail the reviewed original SF-1199A and
canceled check to the above address and not the address identified in
the last paragraph of section 2.1 of LOCCS User Guide. The banking
policy stated in the second paragraph of section 2.1 of the LOCCS User
Guide does not pertain to IHBG. Grant recipients may designate a
different bank account for the deposit of IHBG funds.

**7. Additional Guidance**: For program specific guidance, grant
recipients should contact their Area ONAP. For detailed, non-program
specific LOCCS/VRS guidance please refer to the LOCCS User Guide. To
obtain copies of the User Guide, please call (800) 767-7468.

\_ /s/ Harold Lucas\
Assistant Secretary for Public and Indian Housing