U.S. Department of Housing and Urban Development Washington, D.C. 20410-3000 July 30, 1991 OFFICE OF THE ASSISTANT SECRETARY FOR ADMINISTRATION Ethics Letter 91-4 SPECIAL ATTENTION OF: PRINCIPAL STAFF ALL REGIONAL ADMINISTRATORS ALL REGIONAL DIRECTORS OF ADMINISTRATION ALL FIELD OFFICE MANAGERS ALL FIELD OFFICE ADMINISTRATIVE OFFICERS SUBJECT: Implementation of Section 102 of the Department of Housing and Urban Development Reform Act of 1989 PART I - INTRODUCTION PURPOSE. This Letter provides guidance on the effective sections of the rule published in the Federal Register on March 14, 1991,* at 56 FR 11032, as a new Part 12 of Title 24 of the Code of Federal Regulations, implementing Section 102 of the Department of Housing and Urban Development Reform Act of 1989, commonly known as the HUD Reform Act. Section 102 is entitled "Accountability in the Provision of HUD Assistance." Sections 12.12, 12.14(a), 12.14(b) and 12.16(a) became effective on April 15, 1991. Subsequent Letters will be published to provide guidance on the other sections as they become effective. ______________________ * The Office of the Assistant Secretary for Housing-Federal Housing Commissioner published in the Federal Register a Notice of administrative guidelines to be applied to assistance programs of the Office of Housing. This Notice, relating to Subpart D of the Reform Act (Section 102) regulations, and the regulations changes to 24 CFR parts 207, 220, 221, 231, 232, 241, and 882, became effective April 15, 1991 for Low Income Housing Tax (LIHT) Credits used in conjunction with specific projects approved by the Office of Housing. This Notice will be addressed in a Subsequent Letter. The Office of Ethics made a policy decision that only those parts of Section 102 which were effective in the final rule published on March 14, 1991, will be discussed in this initial Section 102 Ethics Letter. ___________________________________________________________________________ AE: Distribution: W-1, W-2, W-3, W-3-1, W-4, R-1, R-3-1, R-6, R-7, R-8, R-9, O-16 _____________________________________________________________________ The rule is designed to provide public scrutiny of the awarding of HUD assistance and to ensure greater accountability and integrity in the way in which the Department makes assistance available under certain of its programs. The Office of Ethics (in the Office of Administration) has been assigned the lead responsibility for implementing Section 102. Part II provides an overview of the substantive requirements of those sections of the rule that became effective on April 15, 1991. Part III identifies the procedures for implementing these effective parts, including actions required to be taken by program offices. PART II - AN OVERVIEW OF THE SUBSTANTIVE REQUIREMENTS OF THOSE PARTS OF SECTION 102 THAT WERE IN EFFECT ON MARCH 14,1991 This part provides an overview of the effective parts of the final rule published on March 14, 1991. The final rule see Attachment I should be consulted for further information on each point. The major features are: A. FOR ASSISTANCE MADE AVAILABLE BY HUD THROUGH A COMPETITIVE PROCESS 1. Publication of Notices of Fund Availability. - Before HUD solicits an application for assistance, the Department must publish a Notice (or Notices) in the Federal Register announcing the availability of assistance, as well as the application requirements and procedures, the deadline(s), and the selection criteria HUD will use in making the assistance available. Section 12.12 2. Written Application. - HUD will award assistance only in response to written applications, except where other procedures are specified by statute. Section 12.14(a) ___________________________________________________________________________ Office of Ethics Page 2 Ethics Letter 91-4 _____________________________________________________________________ 3. Basis For Decision. HUD must ensure that documentation and other information regarding each application submitted to the Department are sufficient to indicate the basis upon which assistance was provided or denied. This material must be made available for public inspection for a five-year period. Section 12.14(b) B. FOR ASSISTANCE THAT IS MADE AVAILABLE BY HUD THROUGH A COMPETITION OR ON A DISCRETIONARY, NON-COMPETITIVE BASIS 1. Notice of Funding Decisions. - HUD must publish a Notice in the Federal Register at least quarterly indicating those that received the assistance. Section 12.16(a) - The notice will include: a. Name and address of each recipient of assistance; b. Name or other means of identifying the project, activity or undertaking for each such recipient; c. Dollar amount of the assistance for each project, activity or undertaking; d. Citation to the statutory, regulatory or other criteria under which the decision to provide assistance was made; and e. Such additional information as HUD deems appropriate. NOTE: Section 102 does not cover contracts (e.g., procurement contracts) that are subject to the Federal Acquisition Regulation. ___________________________________________________________________________ Office of Ethics Page 3 Ethics Letter 91-4 _____________________________________________________________________ PART III - PROCEDURAL REQUIREMENTS This part describes actions which must be taken by Departmental offices in connection with those requirements of Section 102 that were effective on April 15, 1991. A. RESPONSIBILITIES OF PRIMARY ORGANIZATION HEADS. Each Primary Organization Head (POH) who has responsibility under Section 102 must ensure compliance with the procedural requirements of this Letter. 1. Establish Liaison. - Each POH shall designate a senior level official to act as liaison to the Office of Ethics. The name, title, office, and telephone number of such designee shall be submitted to the Office of Ethics within ten (10) days of issuance of this Notice. 2. Notices of Fund Availability. - Each POH must ensure that before an application for assistance is solicited, a Notice is published in the Federal Register in keeping with the requirements set forth in Sections 12.12 and 12.14(a) of the March 14 final rule, 3. Files. - Each POH will ensure information (applications and all related information) is kept in the related assistance files subject to the requirements of Section 12.14(b) of the March 14 final rule. Further details on the retention requirements and public access will be provided later. 4. Publication of Required Documents in the Federal Register. - Each POH will submit all required information to be published in the Federal Register to the Office of General Counsel, Office of Legislation and Regulations, in a timely manner, ensuring that the publication requirements of Section 12.16(a) of the March 14 final rule are met by the Department. ___________________________________________________________________________ Office of Ethics Page 4 Ethics Letter 91-4 _____________________________________________________________________ Other sections of the March 14 final rule have not been made effective as yet. Subsequent letters will be published to provide guidance on those sections as they become effective. Any questions about this Letter should be addressed to the Director, Office of Ethics, Room 2158 in Headquarters, telephone (202) 708-3815 (FTS 458-3815). ___________________________________________________________________________ Office of Ethics Page 5 Ethics Letter 91-4