**[1. PURPOSE:]{.underline}**

This notice provides instructions and clarification of how to handle
unexpended

PHDEP Special Initiative and Gun Buyback Matching funds.

> **[2. BACKROUND:]{.underline}**

Notice of Funding Availability (NOFA) for the Public Housing Drug
Elimination Program Gun Buyback Violence Reduction Initiative was issued
in the Federal Register on November 3, 1999. The NOFA affirmed that gun
buyback initiatives are eligible activities under the public housing
drug elimination program and provided funding information and program
guidelines for gun buyback initiatives. The NOFA stated that Public
Housing Agencies (PHAs) may reprogram a portion of their FY 1999 PHDEP
grant dollars in order to devote such resources to gun buyback violence
reduction initiatives. The Department through the NOFA made an
additional \$4.5 million available for gun buyback initiatives to PHAs
who reprogrammed PHDEP funds for gun buyback violence reduction
initiatives. This \$4.5 million was to be awarded on a basis of \$43 for
every \$100 of FY 1999 PHDEP funds reprogrammed for gun buyback violence
reduction initiatives. A Notice of Amendment and Republication of the
NOFA for the PHDEP Gun Buyback Violence Reduction Initiative was issued
in the Federal Register on February 3, 2000. This amendment made clear
that while HUD's matching funds are to be drawn only from the FY 1999
PHDEP set-aside, PHA's expenditures are not restricted to FY 1999 grant
funds, but may come from PHDEP grant funds regardless of fiscal year.

PHDEP funds reprogrammed for the Gun Buyback initiative are included in
the Line of Credit Control System (LOCCS) under Budget Line Item (BLI)
\# 9115 - Special Initiative. The additional 43% awarded out of the
\$4.5 million funding is included in LOCCS under BLI #9116 - Gun Buyback
Matching funds.

**[POLICY :]{.underline}**

Gun Buyback Matching funds not expended by PHAs by the termination date
of their Grant Agreement must be recaptured by HUD. Gun Buyback Matching
funds must be expended only for those eligible activities included in
the NOFAs issued in the Federal Register of November 3, 1999

and February 3, 2000, and must be expended and disbursed at a ratio of
\$43 for every \$100 of reprogrammed PHDEP funds disbursed.

**[3. GUIDANCE:]{.underline}**

It has come to the Department's attention that some grantees have been
unclear as to how to handle transactions in LOCCS for BLIs #9115 and
#9116. This Notice provides guidance on how to handle such transactions.
For those PHAs that will not disburse the total amount allocated to the
Gun Buyback program, LOCCS will indicate that there is a balance in
either BLI 9115 or BLI 9116. The amounts disbursed and the amounts shown
as balance must have the same percentage relationship as the original
funding of \$100 for BLI 9115 - Special Initiative and \$43 for BLI
9116 - Gun Buyback Matching funds. Where that is not the case, a
redistribution will be necessary.

The redistributed balance of BLI 9116 - Gun Buyback Matching funds, as
indicated above, cannot be reprogrammed for other PHDEP activities since
the funds are not PHDEP grant funds. This amount must be recaptured. Any
balance remaining in BLI 9115 - Special Initiative can be reprogrammed
for other PHDEP activities if there is a valid request from the PHA and
review and approval by the Field Office. Copy of the request must also
be sent to HUD Headquarters.

Adjustments to Disbursements for Redistribution of BLIs 9115 and 9116
can only be done by the Fort Worth Accounting staff. Accordingly, the
Field Office staff must do the calculation and instruct Fort Worth to
enter the amounts in LOCCS. The net change of the disbursements for the
BLIs 9115 and 9116 should be zero. Examples of entries to redistribute
are listed below:

**Case A** Old Disbursements New Disbursements

BLI Budget Disbursements Balance Redistribution Balance Adjust. Entries

9115 10,000 10,000 0 6,993 \* 3,007 (3,007)

9116 4,300 0 4,300 3,007 \*\* 1,293 3,007

Subtotal 14,300 10,000 \*\*\* 4,300 10,000 4,300 0

\* Divide total disbursements \*\*\* by 143 times 100 (10,000/143)x100 =
6,993

\*\* Divide total disbursements \*\*\* by 143 times 43 (10,000/143)x 43
=3,007

**Case B**

9115 5,000 2,850 2,150 3,497 1,503 647

9116 2,150 2,150 0 1,503 647 (647)

Subtotal 7,150 5,000 2,150 5,000 2,150 0

A request for redistribution must be initiated by the grantee and
submitted to the Field Office monitoring the grant, with copy to HUD
Headquarters, on HUD Form 50080 - Payment Voucher.

**[FOR FURTHER INFORMATION AND TECHNICAL ASSISTANCE]{.underline}**:

If you have any questions please contact Marvin Klepper at (202)
708-0614 ext.4229.

**/s/**

Harold Lucas

> Gloria J. Cousar

Acting General Deputy Assistant

Secretary for Public and Indian Housing