CHAPTER 2. APPORTIONMENT AND ALLOTMENT OF FUNDS

1.  PURPOSE. This Chapter describes the process and procedures for
    apportioning appropriated budgetary resources to the Department and
    subsequently allotting those resources to designated HUD allotment
    holders for use.

2.  APPORTIONMENT OF FUNDS BY OMB. Budgetary resources appropriated for
    HUD by the Congress are subject to "apportionment" to the Department
    by OMB. The following considerations and requirements are part of
    HUD's administrative control of funds:

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1.  Apportionments are legally binding documents that specify amounts
    and purposes for which appropriated resources shall be used;

2.  Obligating funds in excess of amounts provided by an apportionment,
    allotment or suballotment is a violation of the Antideficiency Act;

3.  OMB apportions budgetary resources to the Assistant CFO (ACFO) for
    Budget, the official designated by the Secretary and the CFO to
    administer HUD's apportionment/allotment processes;

4.  The Department has 10 calendar days from the date of enactment of an
    appropriation to submit an apportionment request to OMB;

5.  OMB has 30 calendar days from enactment to approve or disapprove the
    apportionment request; and

6.  Before HUD officials are authorized to use budgetary resources
    apportioned to the Department, the resources must be allotted to
    them in accordance with Sections 2-5 through 2-8 of this Chapter.

    1.  PROCEDURES FOR REQUESTING INITIAL APPORTIONMENTS. Standard Form
        No. 132 (SF-132), "Apportionment and Reapportionment Schedule,"
        is to be used by HUD allotment holders in requesting the
        apportionment of funds. A sample SF-132 is provided in Appendix
        No. 5. This form is to be used for requesting all budgetary
        resources of the Department, which are generally described in
        paragraph 2-4 below. HUD officials will abide by the following
        considerations and requirements in submitting and processing
        apportionment requests:

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1.  All apportionments and allotments expire at the end of each fiscal
    year;

2.  Before funds can be obligated in the following fiscal year, new
    apportionments and allotments must be requested, approved, and
    issued;

3.  All allotment holders will submit the initial apportionment request
    for the upcoming fiscal year to the ACFO for Budget, by a time
    period to be specified by the ACFO for Budget;

4.  The Office of Budget will prepare apportionment requests with
    multiple allotment holders (e.g., the Housing Certificate Fund) with
    input from the affected program offices, and will provide feedback
    to the allotment holders or their designees on the content and basis
    of the request before it goes forward to OMB;

5.  The apportionment should include the amount of the new appropriation
    (if known) and a prudent estimate of prior year unobligated balances
    available for carryover in each account;

6.  The ACFO for Budget will review and approve the apportionment
    request and submit it to OMB; and

7.  HUD Principal Staff in Headquarters shall submit operating budget
    estimates for Salaries and Expenses funding in the form specified in
    the ACFO for Budget's "Annual Call for Operating Budgets."

    1.  BUDGETARY RESOURCES. Budgetary resources provide agencies with
        the authority to enter into obligations that will result in
        outlays. All of HUD's budgetary resources are subject to the
        apportionment and allotment process. HUD has different types of
        budgetary resources, as documented on the top portions of the
        SF-132, as follows:

> Budget authority (Line 1 of SF-132)

\- Appropriations realized

\- Borrowing authority \-- permanent indefinite

\- Contract authority (distinct from procurement authority) \-- and no
longer used at                HUD

\- Net transfers

\- Other

> Unobligated balance from prior years (Line 2 of SF-132)

\- Balance brought forward, October 1

\- Net transfers of prior year balances

\- Anticipated transfers

> Spending authority from offsetting collections (Line 3 of SF-132)

\- Earned (collections or receivables from federal sources)

\- Change in unfilled customer orders

\- Anticipated collections

\- Transfers from trust funds

> Recoveries of prior-year obligations (Line 4 of SF-132)

\- Actual recoveries

> \- Anticipated recoveries
>
> Some budgetary resources are temporarily or permanently unavailable
> and appear as negative amounts on the SF-132. Examples include:
>
> Temporarily not available pursuant to Public Law (Line 5 of SF-132);
> and
>
> Permanently not available (Line 6 of SF-132)

-   Cancellations of expired and no-year accounts

-   Enacted rescissions

-   Capital transfers and redemption of debt

-   Other authority withdrawn.

> Budgetary resources apportioned to HUD must be allotted to HUD
> officials, in accordance with below Sections 2-5 through 2-8, to give
> them the authority to use the resources.

2.  HUD ALLOTMENT OF RESOURCES. The approved budgetary resources
    provided in the OMB apportionment to HUD are allotted to responsible
    HUD officials under the following conditions:

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1.  Like the apportionment, the allotment is a legally binding document
    that specifies the amounts, purposes and time periods for which
    authorized funds can be obligated;

2.  While the apportionment provides specific guidance for the
    Department, the allotment provides specific direction to the
    allotment holder; and

3.  For funds control purposes the allotment holder cannot commit or
    obligate funding for amounts, purposes or periods other than those
    included on the allotment.

    1.  OFFICIALS AUTHORIZED TO ISSUE ALLOTMENT OF FUNDS. The CFO (or
        his/her designee, the ACFO for Budget) will issue allotments to
        the officials referred to in paragraph 2-7 below.

    2.  OFFICIALS AUTHORIZED TO RECEIVE AN ALLOTMENT OF FUNDS.

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1.  Allotments of program funds may be made only to the HUD officials
    listed in Appendix No. 4 (allotment holders). The list will be
    reviewed and updated annually, or as necessitated by turnover in
    positions, and copies of the updates will be provided to all
    allotment holders. The list of current allotment holders will be
    maintained at [hud@work]{.underline} on the OCFO's web site.

2.  Allotments of Salaries and Expense (S&E) funding shall be made to
    each program Assistant Secretary or equivalent and to such other
    officials as may be designated in Appendix No. 4. The OCFO shall
    review the listing of allotment holders at least annually and make
    such changes or additions as may be appropriate.

    1.  ADVICE OF ALLOTMENT.

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1.  [Form]{.underline} All allotments prepared by the ACFO for Budget
    shall be made on Form\
    No. HUD-158, "Advice of Allotment." The HUD-158 includes the amount
    available, funding source, time period of availability, the position
    and title of the allotment holder responsible and other agency
    limitations. A sample of HUD-158 is provided in Appendix No. 6.

2.  [Prerequisite]{.underline} Before the ACFO for Budget can issue an
    Advice of Allotment to an allotment holder, he/she must provide:

    a.  [Certification of knowledge and acceptance of
        responsibility]{.underline} Certify that they are aware of and
        responsible for adhering to the requirements of the
        Antideficiency Act and this handbook; and

    b.  [Submission of an acceptable funds control plan]{.underline}
        Submit a funds control plan acceptable to the CFO, in accordance
        with Chapter 4 and Appendix No. 9 of this handbook. Funds
        control plans for S &E and Working Capital Funds (WCF) will
        adhere to CFO guidelines and Chapter 4 of this handbook.
        However, the format for S&E and WCF deviates from Appendix No. 9
        of this handbook. Contact the OCFO for further guidance.

3.  [Manner in which Authority is Provided]{.underline}

    a.  Allotments will normally be made on at least the same basis as
        funds are apportioned (i.e., quarterly, by program, for a period
        of one fiscal year, etc.). This does not preclude the ACFO for
        Budget from issuing allotments in greater detail than the
        apportionment.

    b.  Where no appropriation act has been approved prior to October 1,
        a Continuing Resolution (CR) may be enacted to provide minimum
        funding until such time as the annual appropriation is enacted.
        In these instances, the Office of the ACFO for Budget will
        notify the allotment holders of the period of the CR, the amount
        of funds available to them during that period, and any special
        restriction placed on the use of the funds by the CR.

    c.  In the event that the Department is operating under a CR,
        interim allotments [may]{.underline} be issued by memorandum and
        will govern all activities pending the completion of
        appropriations action.

    d.  Where quarterly subdivisions are shown on the allotment, unused
        balances available at the end of any of the first three quarters
        shall be available for use in the succeeding quarter unless
        withdrawn by an Advice of Allotment.

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4.  [Availability of Allotments]{.underline} Allotted funds shall be
    available for use only during the fiscal year in which they are
    allotted. Allotments and changes in allotments for each program or
    allotment holder shall be sequentially numbered during that fiscal
    year.

5.  [Issuance of Advice of Allotments]{.underline} The ACFO for Budget
    will issue the Advice of Allotment forms to allot HUD's apportioned
    funds to designated allotment holders for use.

    a.  Based on approved OMB apportionments to HUD, the ACFO for Budget
        will sign original (hard copy) Advice of Allotment forms for
        issuance to allotment holders.

    b.  Once the ACFO for Budget signs the allotment forms and
        OCFO/Accounting enters the apportionment into HUDCAPS, allotted
        funds will be input into HUDCAPS by Office of Budget staff, with
        the exception of funds for accounts not currently controlled
        through HUDCAPS systems, including the GNMA and FHA accounts and
        other non-FHA loan guarantee accounts (which are subject to the
        Credit Reform Act), such as the Section 108 Loan Guarantee
        account administered by the Office of Community Planning and
        Development (CPD).

    c.  Copies of the signed allotment forms will then be delivered as
        follows: original to the Program Budget Officer and/or the Funds
        Control Officer with copies sent to the CFO Accounting and
        Monitoring and Analysis Division and the CFO Internal and
        External Reporting Division. Copies of the salaries and expense
        Advice of Allotments are no longer delivered to the CFO offices
        mentioned.

    d.  Both the Program Budget Officer and the Funds Control Officer,
        if different, will sign for receipt of their copy of the
        allotment form.

    e.  Delivery of the allotment does not serve as notice that the
        funds have been entered into the HUDCAPS system for use. The
        allotment will however, serve as a planning document for the
        program office. The funds will be entered into the HUDCAPS
        system within 24 hours of the signed allotment as long as it is
        practicable. FHA and GNMA are responsible for inputting their
        authorized funding limits into their systems for supporting the
        administrative control of funds.

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    1.  CHANGES IN APPORTIONMENTS AND ALLOTMENTS DURING THE FISCAL YEAR.

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1.  Requests for changes in apportionments and allotments may be made
    whenever necessary. Initial apportionments and allotments of some
    budgetary resources are based on estimates or projections of
    resources, such as projected collection activity or estimated needs
    against a permanent indefinite authority. In those cases, it is
    incumbent on the allotment holder and their staff to closely monitor
    and manage those activities, and as needed, to either request an
    increase in their authorized budgetary resources or to curtail or
    cease the obligation of funds to avoid a violation of the
    Antideficiency Act.

2.  For program accounts, the allotment holder will initiate such
    requests by submitting a revised apportionment request to the ACFO
    for Budget. For program accounts with multiple allotment holders,
    the affected office should notify the ACFO for Budget that a change
    is needed so that the OCFO/Office of Budget can prepare a revised
    apportionment request. The ACFO for Budget will then initiate any
    revised apportionment requests for Salaries and Expense (S&E)
    funding, with input from S&E allotment holders, as needed. Upon
    approval of the apportionment request by OMB, the ACFO for Budget
    will issue a revised advice of allotment to increase the allotment
    holder's funding authority.

    1.  APPORTIONMENT ACTION RELATED TO DEFERRALS AND RESCISSIONS.

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1.  Definitions

    a.  [Deferral]{.underline} A deferral is any action or inaction by
        an officer of the United States Government that temporarily
        withholds, delays or effectively precludes the obligation or
        expenditure of budget authority. Deferrals must receive prior
        approval from OMB. For the purposes of this handbook, deferrals
        include those actions within the Department that result from
        policy decisions to obligate apportioned funds provided for a
        specific purpose or project at a pace slower than intended by
        the Congress. However, the Department is not required to report
        normal internal management actions that affect the timing of
        obligations for reasons related to the routine financial
        management of a program or project or to comply with procurement
        regulation or sound procurement practices.

    b.  [Rescission]{.underline} A rescission is enacted legislation
        canceling budget authority previously provided by the Congress,
        prior to the time when the authority would otherwise have
        expired.

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2.  Policy.

> While deferrals have rarely been used in recent years, rescissions are
> very common in the Department. A general discussion of the highlights
> of the effects of deferrals and rescissions on the apportionment is
> provided below. Any questions concerning proper procedures to be
> followed for a deferral are to be directed to the Office of Budget.

a.  [Deferrals]{.underline}

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i.  Budgetary resources may be withheld from obligation temporarily
    through the apportionment process with the intent of apportioning
    them for use later, before they lapse. A deferral must be reported
    to the Congress in a special message from the President. If the
    Congress takes no action to disapprove a reported deferral, it may
    remain in effect until the end of the fiscal year unless a special
    message indicates that an earlier release is planned. For annual
    accounts and the last year of multiple-year accounts, however, funds
    may be deferred for only part of the year. HUD allotment holders and
    staff are not authorized to unilaterally defer action on allotted
    funds.

ii. If a determination is made that such deferred amounts should not be
    used, a rescission will be proposed prior to the beginning of the
    fourth fiscal quarter. Only in exceptional cases will rescissions be
    proposed during the fourth quarter.

iii. Whenever it is determined that a deferred amount will not be
     required to carry out the purposes of the appropriation or other
     authority, it will be proposed for rescission as required by law.

>       b. [Rescissions]{.underline}

i.  Whenever the President determines that all or part of any budget
    authority will not be required to carry out the full objectives or
    scope of programs for which it is provided, the President will
    propose to the Congress that the funds be rescinded.

ii. If all or part of any budget authority limited to a fiscal year
    (i.e., annual appropriations or budget authority for the last year
    of multiple-year accounts) is to be withheld for the entire fiscal
    year, a rescission will be proposed.

iii. As a rule, amounts proposed for rescission will be withheld during
     the time the proposals are being considered by the Congress. When
     approved by OMB, funds may be proposed for rescission without being
     withheld.

iv. Rescissions must be enacted into law. If the Congress does not
    complete action on a rescission proposed by the President within 45
    calendar days of continuous session, any funds being withheld must
    be made available for obligation.

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3.  Procedures for the Release of Deferrals.

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a.  In situations where Congress takes positive action (in the form of
    an impoundment resolution) to disapprove an Executive deferral, the
    Department must take prompt action to ensure the release of the
    affected amounts.

b.  In those cases where funds have been deferred through the
    apportionment process, a reapportionment form, reflecting release of
    amounts previously deferred, will be submitted to OMB not later than
    the day following passage of the resolution.

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4.  Procedures for Rescissions.

    a.  Presidentially Proposed Rescissions. At the time that a
        rescission is proposed, apportionment forms will be submitted to
        OMB showing that those funds are being withheld pending
        rescission.

        i.  If Congress rescinds the exact amount proposed,
            reapportionment action is not required to reflect the
            reduction in budget authority since it is already being
            withheld.

        ii. If Congress rescinds an amount different from that initially
            proposed, reapportionment requests will be submitted to OMB
            promptly upon completion of the Congressional action.

        iii. If Congress takes no action on a rescission proposal within
             45 days following the receipt of the proposed rescission
             message, reapportionment requests reflecting the release of
             the affected amounts must be submitted to OMB. The Office
             of Budget will keep appropriate offices informed of the
             status of rescission actions, and provide advice as to the
             exact timing for submission under these circumstances.

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b.  The Congressionally Proposed Rescissions.

    i.  Where initial apportionment action has not been completed before
        rescission action is taken and sufficient time exists to revise
        the apportionment request (i.e., within 30 days after the date
        of enactment of the appropriation bill), the Department or OMB
        will make appropriate changes to the SF-132.

    ii. When there is insufficient time to adjust the initial SF-132,
        the Department will submit a reapportionment request within five
        calendar days after the date of enactment of the reconciliation
        or rescission bill, ensuring that the reduced appropriation is
        not exceeded.

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    1.  SUBALLOTMENT. Allotment holders may, with the advance approval
        of the CFO, suballot authority made available to them to
        officials directly responsible to them, without authority for
        further reallotment. Approved suballotment holders will be
        formally designated in writing by the CFO and the suballotment
        carries the responsibility for compliance with the
        Antideficiency Act. Officials to whom authority has been
        suballotted could be determined to have violated the
        Antideficiency Act should they exceed the authority suballotted
        to them. Allotment holders shall not suballot authority to Field
        Offices or to officials of other organizations of the
        Department. There are currently no instances in the Department
        where funds are suballotted. Fund assignments, as they are
        currently used in accordance with Section 2-12 of this handbook,
        do not constitute a suballotment of funds. The conditions of the
        suballotment must be described in the allotment holder's funds
        control plan, with signed acceptance by the suballotment holder
        and approval by the CFO. It is the responsibility of the
        allotment holder and the OCFO to ensure that funds are only
        suballotted to officials that have the proven capacity to
        properly administer and account for the funds they will manage.

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    12. SUBDIVISION OF PROGRAM FUNDS.

> 1\. Headquarters.

      Allotments and suballotments will be established at the highest
practical level and       each operating unit will be financed from no
more than one subdivision for each       appropriation or fund and are
subject to the provisions of the Antideficiency Act.       Such
subdivisions or assignments should be coordinated within a central point
in the       allotment holder's organization. The system of management
controls established by       the allotment holder for such subdivisions
or assignments must be described in the       applicable funds control
plan and approved in advance by the CFO. Funds control       plans for
each allotment must cover all program line items and any subcomponents
      thereof, broken down to the lowest distinct funding activity with
applicable       accounting codes used to roll-up the funding activity
to the program line item and       allotment (see Chapter 4).

2\. Field Offices.

> Distribution of program funds to Field Office Directors will be in the
> form of fund assignments, using the form HUD-185 or an alternative
> format that provides the same information. Any fund assignments to the
> Field Office Directors shall be made by allotment holders of the
> program funds. The allotment holders should designate, to the extent
> practicable, a fixed point in their organization for the coordination
> and issuance of such fund assignments. Information on the distribution
> of fund assignments, and the basis on which they are made and
> controlled, should be contained in the applicable funds control plan
> for CFO approval.
>
> Assignment holders may not commit, obligate, or expend more than the
> authority assigned to them. While an overobligation or overexpenditure
> of assigned funds does not constitute a violation of the
> Antideficiency Act unless it causes an overobligation or
> overexpenditure of the suballotment, allotment, apportionment, or
> appropriation from which it originated, assignment holders are subject
> to administrative action for exceeding their authority.

13. STAFF EXPENSE FUNDS. The ACFO for Budget allots S&E funds to the
    program Assistant Secretaries or equivalents for all object classes.

14. APPORTIONMENT AND ALLOTMENT OF ADVANCES, REIMBURSEMENTS, AND OTHER
    RECEIPTS. Advances of funds to the Department, reimbursements, and
    other anticipated receipts of funds are subject to apportionment and
    allotment. This includes advances, reimbursements, and other
    receipts that are the result of interagency agreements as well as
    those that may be generated from a continuing cycle of program
    operations. These anticipated funds must be apportioned and allotted
    to be available for obligation. Any exceptions to this policy may be
    approved by the CFO as part of a proposed Funds Control Plan.

2-15 APPORTIONMENT AND ALLOTMENT OF RECOVERIES/RECAPTURES OF PRIOR YEAR
OBLIGATIONS (UNEXPIRED FUNDS). These recoveries/recaptures must be
apportioned and allotted to be available for obligation.

2-16 APPORTIONMENTS REQUIRING DEFICIENCY ESTIMATES.

1.  Subject to the critical limitation explained in section 4, below, 31
    U.S.C. 1515(a) allows an appropriation required to be apportioned
    under 31
    U.S.C.[1512](http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00001512----000-.html)
    to be apportioned on a basis that indicates the need for a
    deficiency or supplemental appropriation to the extent necessary to
    permit payment of pay increases that may be granted pursuant to law
    to officers and employees, including prevailing rate employees whose
    pay is fixed and adjusted under subchapter
    [IV](http://www.law.cornell.edu/uscode/html/uscode05/usc_sup_01_5_10_III_20_D_30_53_40_IV.html)
    of chapter
    [53](http://www.law.cornell.edu/uscode/html/uscode05/usc_sup_01_5_10_III_20_D_30_53.html)
    of U.S.C. title
    [5](http://www.law.cornell.edu/uscode/html/uscode05/usc_sup_01_5.html).

2.  Except as provided in 31 U.S.C. 1515(a), 31 U.S.C. 1515(b)
    authorizes, using SF-132, an official to make, and the head of an
    executive agency to request, an apportionment under section
    [1512](http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00001512----000-.html)
    of this title that would indicate a necessity for a deficiency or
    supplemental appropriation only when the official or agency head
    decides that the action is required because of:

> a\. A law enacted after submission to Congress of the estimates for an
> appropriation      that requires an expenditure beyond administrative
> control; or
>
> b\. An emergency involving the safety of human life, the protection of
> property,
>
>      or the immediate welfare of individuals when an appropriation
> that would allow      the United States Government to pay, or
> contribute to, amounts required to be paid      to individuals in
> specific amounts fixed by law or under formulas prescribed by
>      law, is insufficient.

3\. If an official making an apportionment decides that an apportionment
would indicate a necessity for a deficiency or supplemental
appropriation, the official shall submit immediately a detailed report
of the facts to Congress. The report shall be referred to in submitting
a proposed deficiency or supplemental appropriation.

> 4\. Please note that 31 U.S.C. 1515 in no way authorizes HUD to incur
> obligations in excess of the total amount of money appropriated for a
> period. It only provides an exception to the general apportionment
> rule set out in 31 U.S.C. 1512(a) that an appropriation be allowed so
> as to insure it is not exhausted prematurely. Section 1515 says
> nothing about increasing the total amount of the appropriation itself
> or authorizing the incurring of obligations in excess of the total
> appropriated. On the contrary, apportionment only involves the
> subdivision of appropriations already enacted by Congress. *The sum of
> the parts shall not exceed the total amount of the appropriation being
> apportioned*.