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CHAPTER 4. RESERVATION AND OBLIGATION OF FUNDS

4-1 OBJECTIVE. The objective of this chapter is to describe the
financial

procedures to be followed in order to make funds available to the

applicants selected for funding through a grant agreement executed by

HUD and the applicant.

4-2 HEADQUARTERS FUND ASSIGNMENT. The regional fund assignments for the

applications selected for funding and the approved grant amounts are

prepared by PIH Budget Division and sent to Headquarters Office of

Finance and Accounting (OFA) for validation of fund availability.

The Assistant Secretary for PIH then executes form HUD-185.

Headquarters Budget Division then transmits the HUD-185s to the

Regional Accounting Division (RAD). In the future, a form HUD-718

may be used.

4-3 REGIONAL FUND SUBASSIGNMENT. Once Regional Program Offices and

Offices of Native American Programs have received the Headquarters

fund assignment, they will then prepare form HUD-185.1 subassigning

grant funds to each FONAP in their jurisdiction for the applicants

selected for funding. Once the HUD-185.1s have been prepared, they

will be forwarded to the RAD.

4-4 RAD VERIFIES FUND AVAILABILITY. The RAD will validate that
sufficient

funds are available and then return the HUD 185.1s to the Regional

program office. The FONAP Administrator (FA) will execute the

HUD-185.1s. A signed copy of the HUD-185.1s is provided to RAD.

4-5 RAD COMPLETES FUND RESERVATION. The RAD records the reservation of

funds into the Program Accounting System (PAS) based on the signed

copy of the HUD-185.1 and the signed copy of the award documents.

4-6 PROJECT/GRANT AGREEMENT NUMBERS.

A. HOMI Grant Number Structure.

The Indian HOME Program is identified in LOCCS as HOMI. Under

the system, each Indian HOME Program grantee can receive Indian

HOME Program funding from more than one grant per year. In

addition, each grantee can receive Indian HOME Program funding

for new projects from one year to the next.

The format for the eleven position HOMI grant number is:

MyyIGssnnnn

Where \"M\" is the first character for all HOME grants

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\"yy\" is the grant funding source year

\"IG\" identifies the HOME grant as an Indian grant

\"ss\" is the two digit Indian Region Code identified

in system no.

N17\--Management Information Retrieval System (MIRS), i.e. 91

(Denver), 93 (Chicago), 94 (Anchorage), 95 (Oklahoma City),

97 (Seattle), 99 (Phoenix)

\"nnnn\" is a sequential number (e.g., 0001, 0002, 0003,

etc.)

Example: The Oglala Sioux Tribe of South Dakota may have a HOMI

grant number of: M92IG910001.

B. VRS Grant Number Structure. When the Regional Accounting

Division (RAD) assigns an Indian HOME Program grant to a taxpayer

identification number (TIN), and after FONAP staff enters the

amounts for each Budget Line Item (BLI) in the system, LOCCS will

automatically assign a ten digit VRS Grant Number for the grant.

The VRS Grant Number is all numeric and is used to identify the

grant to LOCCS when the caller uses a touchtone telephone. It is

not convenient to attempt alpha-numeric entry via a touchtone

keypad as alpha characters, such as \"M\" and \"IG\" are difficult

to enter. The 10-digit VRS Grant Number is mailed to the grantee

automatically by LOCCS following the assignment of the grant to

the grantee\'s TIN and the entry of the BLIs.

4-7 GRANT AGREEMENT PREPARATION.

A. FONAPs must maintain a supply of the following forms/documents to

be distributed to each grantee as needed. FONAP Administrative

Officers should be made aware of this requirement. They include:

1\. Form HUD-52570, \"Indian HOME Investment Partnership Program

Grant\" and Form HUD-52570-A, \"Agreement and Funding

Approval.\"

2\. Form HUD-1044, \"Assistance Award/Amendment.\"

3\. Form HUD-27056, \"Change of Address Request for Recipients of

HUD Grants or Contracts.\"

4\. Form HUD-27054, \"LOCCS Voice Response System Access

Authorization\" with instructions and completed SAMPLE form.

For Grantee staff.

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5\. Form HUD-27054A, \"LOCCS Voice Response Access Authorization

Form with instructions. For HUD staff.

6\. SF 1199A, \"Direct Deposit Sign-up Form.\"

7\. Instructions for Completing SF 1199A.

8\. Form HUD-50080-HOMI, \"LOCCS/VRS Indian HOME Program Payment

Certification Voucher.\"

9\. Line of Credit Control System (LOCCS) User Guide, Part 1,

October 1993. (For Grantees.)

10\. Line of Credit Control System (LOCCS) User Guide for PIH,

January 1994. (For HUD staff.)

B. With respect to applications that have had the requested grant

amount reduced by HUD during the scoring process or that contain

items that are noted as being questionable based on the inclusion

of apparently ineligible or unreasonable costs the local

HUD FONAPs will add special conditions to be met prior to HUD

execution of the grant agreement.

C. The special conditions will specifically describe any reductions

to the requested grant amount or list proposed expenditures that

appear to be ineligible or unreasonable and require grantees to

either provide adequate information to clarify that the proposed

expenditures are eligible or reasonable or provide an adjustment

to the work plan/budget that reallocates the questioned

expenditures to other activities that are eligible and

reasonable. With local HUD FONAP approval of any clarifications

by the grantee, a grant agreement shall then be executed based

on such changes.

D. FONAPs will prepare a grant agreement package for each grantee.

A grant agreement package consists of three complete copies of a

Form HUD-52570, \"Indian HOME Investment Partnership Program

Grant\" and Form HUD-52570-A, \"Agreement and Funding Approval.\"

The two documents together constitute a complete grant agreement.

E. The local HUD FONAPs are responsible for preparing and executing

grant agreements with the applicants selected for funding.

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F. FONAPs will include a \"LOCCS Voice Response System Access

Authorization,\" form HUD-27054 and instructions. A \"Direct

Deposit Sign-up Form,\" Standard Form 1199A and instructions

shall also be attached.

G. FONAPs will transmit the grant agreement package to each grantee

with a cover letter. The cover letter should request that the

prospective grantee complete the appropriate portions of the

grant agreement. In addition, the letter should state that the

grantee should sign all three copies and that the grantee should

return all materials to the local HUD FONAP from which the

material was sent within two weeks except for one copy (not the

original) of form HUD-27054 which is to be retained by the

grantee. Finally, the letter must state that all required

materials are to be received by HUD within two weeks of the date

of the HUD transmittal letter.

H. Grantees will receive grant agreement packages and will review

and complete documents. They will then sign grant agreements in

triplicate signifying acceptance of terms and return the

documents to the FONAP along with the following forms and

documentation as required:

1\. A \"Direct Deposit Sign-Up Form,\" SF-1199A and, to confirm

the bank routing number and account number, a canceled

check or copy of a canceled check;

2\. A revised program plan or other materials as required by

any special conditions of the grant award; and

3\. A completed \"LOCCS Voice Response Access Authorization,\"

form HUD-27054 (one copy of which is to be retained by the

grantee) with the original and one signed/notarized copy

returned to the local HUD FONAP.

4-8 GRANT AGREEMENT EXECUTION.

A. The local HUD FONAP will receive and review the signed grant

agreement copies and forms returned by the grantee and check

for the following:

1\. Ensure the taxpayer identification number (TIN) is included

on the form HUD-52570-A;

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2\. Check that authorized user and the approving official on

the \"LOCCS Voice Response System Access Authorization,\"

form HUD-27054 are different and that the form is notarized;

3\. Check that any other forms are properly completed as a part

of the grant agreement; and

4\. Check that the SF-1199A was completed by the grantee and

that the grantee information is correct in accordance with

the instructions in Appendix 3 (not the instructions on the

reverse of the original printed SF-1199A form) and that a

canceled check or facsimile of a cancel check has been

provided to facilitate bank routing number. The SF-1199A

should include the grant number in Block B, even though the

instructions indicate to leave Block B blank. The grant

number is needed on the SF-1199A in order to link to the

grant in LOCCS.

5\. FONAPs will retain a copy of the completed form HUD-27054

and will send the original to HUD Headquarters at the

following address:

U.S. Department of Housing & Urban Development

Office of Information Policies and Systems,

AISAO

451 Seventh Street, S.W.

Washington, D.C. 20410-3600

6\. The SF-1199A and canceled check are to be forwarded, noting

on the face of the envelope, \"SF-1199A,\" to the following

address:

U.S. Department of Housing & Urban Development

Office of Finance and Accounting

Cash & Credit Management; ATTN: ACH

P. O. Box 44816

Washington, D.C. 20026-4816

B. Once the review is complete the FONAP Indian HOME Director takes

the following actions:

1\. Advises the grantee that draw downs of grant funds will be

possible upon subsequent notification from HUD of grantee\'s

LOCCS-VRS number for this grant. Includes copies of

\"LOCCS/VRS Indian HOME Program Payment Certification

Voucher,\" form HUD-50080-HOMI.

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2\. Sends one copy of the grant agreement to the RAD, retains

one copy in the grant file, and returns one copy to the

grantee. These actions should be completed within one week

after receipt of acceptable materials from the grantee.

4-9 ALTERNATIVE PROCEDURE. After Departmental Clearance of the above

procedure, the Phoenix ONAP shared the following variation, based on

their experience processing two FY 93 grantees.

A. The following steps/forms must take place before the new HOME

grantee\'s Line of Credit and program reservation can be

completed and processed in RAD:

1\. Form HUD 718, Funds Reservation and Contract Authority.

This form authorizes the reservation of funds for the

specific project/grantee. It is prepared by the field

office CPD Program Assistant and signed by the Source

Officer, the CPD Director, and the FO Administrator (in

that order) and then is forwarded to RAD. This step/form

comes after the subassignment of funds.

2\. Form HUD 52570, Grant Agreement. On this \"official

contract\" between the grantee and HUD, the HUD

Administrator\'s signature should be entered FIRST (as is

done in Indian CDBG grant agreements). The Grantee\'s

signature comes second. Then, the form, as signed by

both signatories, is forwarded to RAD.

B. At this point, RAD is able to record the funds reservation into

the Program Accounting System and assign the taxpayer information

number, after which the FONAP staff can enter budget line

information into LOCCS for the grantee.

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