![](media/image1.png){width="0.6222222222222222in"
height="0.6361111111111111in"} **U. S. Department of Housing and Urban
Development**

> **Office of Public and Indian Housing**

Attention of: **Notice: PIH 2006-40 (ONAP)**

ONAP Administrators; Issued: October 18, 2006

Tribes; and Tribally Expires: October 31, 2007

Designated Housing

Entities

Cross Reference:

24 CFR Part 1000

PIH-2003-13

PIH 2000-44

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

**1.** **Purpose**: This Notice reissues Notice PIH-2003-13 and 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 the 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 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 throughout 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 grant recipients. 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           
  recipients      
  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 Guidance 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 (BLI).
    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.** |                                                    |
+-----------------+----------------------------------------------------+

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 voucher requests that exceed the BLI
        limits. 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 draw down 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 annual performance report 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 (TDHE), extended by Notice PIH 2006-02 (TDHE)). 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 drawn down 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 annual performance report
        covering each grant without a close-out date. If the annual
        performance report 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.

    iv. **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.

**5. 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 the 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
    must 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/VRS
    Instructions for Grantees web site at
    <http://hudatwork.hud.gov/po/f/systems/locvrs.cfm>.

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_/s/\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Orlando J. Cabrera, Assistant Secretary

for Public and Indian Housing