U.S. Department of Housing and Urban Development
                                  Washington, D.C. 20410-3000
 
                                   February 13, 1992
 
OFFICE OF THE ASSISTANT SECRETARY
FOR ADMINISTRATION                                     Ethics Letter 92-2
 
  Special Attention of:
       All HUD Employees
 
  Subject:  The HUD Reform Act Of 1989:  Section 102
            "Accountability in the Provision of HUD Assistance"
 
                               What Is It?
 
  Section 102 is part of the HUD Reform Act, a Federal statute that ensures
  greater accountability and integrity in the provision of certain types of
  assistance administered by the Department.
 
                       To Whom Does Section 102 Apply?
 
  Applicants for assistance for a specific project or activity,
 
      o  from HUD, from a state or a unit of general local government, or
         from certain other entities where the application is subject to
         HUD review,
 
  if the applicant receives at least $200,000 in covered assistance from
  HUD, states, or units of government, during the fiscal year in which the
  application is submitted.  Also, applicants requesting assistance from
  HUD for a specific housing project that involves assistance from other
  governmental sources.
 
                           What Does It Require?
 
  HUD is required to make additional information available to applicants
  under Section 102, including publication of:
 
     o  Notice of Funding availability;
 
     o  Application procedures;
 
     o  Selection criteria; and
 
     o  Documentation of decisions.
 
  This information must be published in the Federal Register.
 
  Applicants must disclose:
 
     o  Assistance from other government sources in connection with the
        project;
 
     o  The financial interests of persons in the project; and
 
     o  The expected sources and uses of funds that are to be made
        available for the project or activity.
 
  Applicants must update the disclosures required above within 30 days of
  any substantial change during the period when an application is pending
  or assistance is being provided.
 
  ________________________________________________________________________
   AE:  Distribution: WA, FA
 
_____________________________________________________________________
 
The Secretary must certify that assistance within the jurisdiction of the
Department to any housing project shall not be more than is necessary to
provide affordable housing after taking account of assistance from other
sources.
 
HUD program offices will be required to take certain actions to administer
these Section 102 requirements, including:
 
   o  maintaining for public access all applicant disclosure reports for
      five years in the case of applications for competitive assistance,
      and for generally three years in the case of other applications;
      update reports must be maintained for a period generally not more
      than three years; and
 
   o  making available to the public all reports -- both applicant
      disclosure and update -- in accordance with the Freedom of
      Information Act (5 U.S.C. 552) and HUD's implementing regulations
      at 24 CFR part 15.
 
                  Are there Penalties for Non-Compliance?
 
The Secretary may impose a civil money penalty on applicants who violate
certain provisions of Section 102, not to exceed $10,000 for each
violation.  Violations involve the improper or non-disclosure of required
information.  This is in addition to administrative sanctions the
Secretary may impose.
 
                    Where Can More Information about
                        Section 102 Be Obtained?
 
A Final Rule on Section 102 of the HUD Reform Act was published in the
Federal Register at 56 FR 11032 dated March 14, 1991, and additional
information was published at 57 FR 1942 dated January 16, 1992.  Further
information is available in the Office of Ethics, Room 2158, telephone
708-3815 (TDD/Voice) or FTS 458-3815.
 
Office of Ethics                Page 2                   Ethics Letter 92-2