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CHAPTER 7. AMENDMENTS TO GRANT AGREEMENT

7-1 OBJECTIVE. The objective of this chapter is to describe the

procedures for a project changes and grant agreement changes, as

well as a project deviation and grant agreement record of deviation,

as a means of maintaining documented control of changes to initially

approved work plans, schedules, and budgets presented in the project

grant application.

7-2 PROJECT DEVIATIONS. Grantees are required to report deviations from

financial plans and budget and to request approvals for revisions.

The grantee is required to submit for approval, changes to the

approved budget (Work Plan and Budget Work Sheet and Form HUD-4123-I,

Cost Summary, and Form HUD-4125-I, Implementation Schedule), plan or

timetable to the local HUD FONAP administering the grant. These

deviations include but are not limited to:

A. Any decrease in the total amount of funds for this project of

more than 25%;

B. Any change in the number of housing units in or persons assisted

by the project; and

C. Any change in the project timetable. Any change in the project

timetable or period of funds availability must be consistent with

the requirement in sec. 92.640 that the funds are committed

within 24 months and expended within five years.

7-3 EVALUATION OF REQUEST FOR PROJECT CHANGE. The FONAP can approve

a change to a project if:

A. The proposal is a modification to the project\--not an entirely

different project\--e.g., fewer houses constructed under a new

construction project\--but not a change from new construction to

rehabilitation, and

B. The proposal to amend the project is due to factors beyond the

control of the grantee, and

C. The modified project scores high enough to have been funded in

the competition\--for an FY 92 grantee, the project would have to

score as high as the lowest funded project in that Region during

the FY 92 ranking.

7-4 GRANT AGREEMENT CHANGE AND GRANT AGREEMENT RECORD OF

DEVIATION. A change to the grant agreement is to be made to reflect

FONAP approval to a modification to the project. The change is made

by amendment to the

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7472.01

initial grant agreement or in addition to any previous amendment(s).

Any amendment is made in triplicate and processed and distributed in

the same manner as for the original grant agreement. In the event the

change is HUD-initiated and does not require grantee signature (i.e.,

HUD address change, suspension or termination for cause by HUD,

deobligation of funds), the grant agreement amendment is executed in

triplicate by HUD and distributed as for any amendment.

7-5 TERM OF GRANT AVAILABILITY. At the time of Indian HOME Program
grant,

the grantee\'s proposed project should be well thought out (not a

concept) and ready for implementation. In developing the project

description and designing the project implementation schedule, the

applicant should recognize the limitations on the term of grant

availability. Pursuant to 24 CFR 92.640,

\"HUD will recapture HOME funds . . . by the amount of. . . . .

\(b\) Any funds that are not expended within five years after the

last day of the month in which the funds were deposited. . . . \"

At most, the grantee has five years to spend all the funds.

7-6 REDUCING OR TERMINATING A GRANT. Reductions or terminations may only

be taken in accordance with requirements and procedures in sections

92.642, 92.650, and 92.651 (see Chapter 8).

A. Full termination is implemented by the FONAP Administrator

executing a grant agreement amendment that reflects the actual

funds used (the amount drawn via LOCCS). Full termination is

made by unilateral HUD action and does not require grantee

signature on the Grant Agreement form executing the amendment.

The amount of funds being de-obligated by the amendment are shown

in parentheses in the block 15 line, \"Obligation by this action,\"

then subtracting that amount from the amount previously obligated

to obtain the new total obligation (the amount of funds actually

drawn at the time of suspension of payments). When there are

disallowed costs, the amount of disallowed costs shall be noted

on the Grant Agreement form advising the grantee of the FONAP\'s

intent to recover all disallowed costs.

B. Partial termination is executed by the FONAP Administrator

initiating a grant agreement amendment defining the specific

activities being terminated and any funding associated with the

terminated activities. The terminated activities and funds must

be defined on the Grant Agreement form the funds de-obligated

shown on the Grant Agreement form. For partial termination, the

grantee signature is required first and then the FONAP executes

and dates the amendment.

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