HOME FACTS - Vol. 2 No. 3, May, 2009

Topic
This issue of HOME FACTS explains the process field office staff must follow to determine each participating jurisdiction’s (PJ’s) compliance with HOME’s commitment, CHDO reservation, and expenditure requirements both prior to and after the PJs deadline date, and provides timeframes for this review.

Requirement
According to the HOME Program Final Rule at 24 CFR 92.500(d)(1)(B), HUD will reduce or recapture any funds in the United States Treasury account that are not committed within 24 months after the last day of the month in which HUD notifies the PJ of HUD's execution of the HOME Investment Partnerships Agreement. Additionally, HUD will reduce or recapture any funds in the United States Treasury account that are not expended within five years after the last day of the month in which HUD notifies the PJ of HUD’s execution of the HOME Investment Partnerships Agreement (24 CFR 92.500(d)(1)(C)).

IMPORTANT NOTE: Beginning with this year’s compliance reviews: fiscal year (FY) 2007 commitments, FY 2007 CHDO reservations, and FY 2004 disbursements, the Office of Affordable Housing Programs (OAHP) is implementing a 120-day period for resolution of all deadline shortfalls. A recent HUD Office of Inspector General (OIG) internal audit was critical of the extended time taken by HUD to resolve commitment, CHDO reservation, and expenditure shortfalls from the deadline through the actual deobligation of the shortfall amount. As a result of the OIG audit, OAHP is implementing this 120-day resolution period to ensure that funds which remain uncommitted or unexpended beyond their deadline dates are timely deobligated for inclusion in the following year’s formula allocation and do not impact the PJ’s commitment and expenditure requirements for the following year.

Compliance Tracking Tools
The HOME Deadline Compliance Status Report lists each PJ’s commitment, CHDO reservation, and expenditure deadlines for easy reference and is the official tool used to track HOME deadline requirements. It can be found on the HOME reports website.
The HOME Deadline Compliance Status Report is based on a monthly download of IDIS data. The IDIS PR27 Status of HOME Grants report also can be used to track, on a day by day basis, a PJ's status in relation to its commitment, CHDO reservation, and expenditure requirements. The HOME FACTS Vol.1, No. 3 (September 2008) describes how to use the IDIS PR 27 report to track HOME deadline compliance.

Prior to Deadline
If the HOME Deadline Compliance Status Report indicates that a PJ is at risk of missing its deadline, field office CPD staff must notify the PJ in writing four months prior to the deadline and again one month prior to the deadline, if there is still a shortfall. These letters serve to: (1) alert the PJ of an impending deadline and its current shortfall in meeting the commitment, CHDO reservation, and/or expenditure requirements; (2) give the PJ an opportunity to set up and fund activities, subgrant funds to CHDOs, subrecipients, or state recipients, or draw down funds in IDIS prior to its deadline; (3) caution the PJ of potential deobligation if action is not taken by the deadline; and/or (4) alert the PJ to the possibility of receiving technical assistance.

OAHP sends an email notification to each Field Office CPD Director prior to the four-month and one-month notification target dates. These messages identify each PJ with a commitment, CHDO reservation and/or expenditure shortfall as of the previous month. Sample PJ notification letters are attached to these emails for field office use.

After Deadline
On the first day of the month following a PJ's deadline, the field office must download an IDIS PR 27 Status of HOME Grants report for the PJ if it determines the PJ is in danger of not meeting one or more of its deadline requirements. This report serves as documentation of the commitments, CHDO reservations, and expenditures in IDIS at the time of the PJ's deadline.

The HOME Deadline Compliance Status Report is posted to the HOME Reports webpage by the 15th of every month. OAHP will notify the CPD Field Office Director of any PJs with commitment, CHDO reservation, or expenditure shortfalls. If the HOME Deadline Compliance Status Report indicates that the PJ missed one or more of its deadlines, the field office must notify the PJ in writing within 30 days after the deadline. This letter serves to request documentation of commitments, CHDO reservations, or expenditures not entered into IDIS by the deadline date and to document that HUD has initiated the deobligation process. The field office will review documentation not entered in IDIS by the deadline date for acceptability using the guidelines outlined in Section VII of HUD Notice CPD 07-06, ,(June 1, 2007).

Any documentation of commitments, CHDO reservations, or expenditures provided by the PJ, which was not previously entered into IDIS, that is accepted by the field office must be maintained in the field office files. In addition, the field office must notify OAHP in writing within 90 days of the missed deadline (by letter or email) once the documentation has been reviewed and is found to be either acceptable or unacceptable.

If the documentation is determined by the field office to be acceptable; the field office CPD staff must submit a summary of the documentation it counted as commitments, CHDO reservations, or expenditures to Evelyn Rumph in OAHP. The summary must include the types of contracts or expenditures; the dates of contract execution or expenditure; the contract or expenditure amounts; and field office verification that the contracts were not set up as HOME activities in IDIS or the expenditures were not drawn down in IDIS as of the date of the PJ's deadline. Upon receipt of the summary, OAHP will revise the HOME Deadline Compliance Status Report to indicate that the shortfall was resolved through documentation. If the documentation is determined to be unacceptable or insufficient to cover the entire shortfall, the field office will use the guidelines outlined in Section IX of HUD Notice CPD 07-06, Commitment, CHDO Reservation, and Expenditure Deadline Requirements for the HOME Program, (June 1, 2007) to process the deobligation.

When a PJ has missed its deadline, OAHP will contact CPD in the field office within 45 days of the deadline to confirm that the PJ has been notified by the field office of its shortfall and to ascertain if a deobligation will be necessary or if the PJ will submit documentation to offset its shortfall. If the field office has not yet determined within 60 days of the PJ’s deadline whether a deobligation is or is not necessary, OAHP will schedule a conference call with the field office to discuss the matter.

Final shortfall determinations must be made by the field office within 90 days of a missed deadline.
This will allow for OAHP to complete the processing of the deobligation within the 120-day window.

Do you have questions?
Questions or correspondence regarding HOME deadline compliance should be directed to Evelyn Rumph, Financial and Information Services Division, Office of Affordable Housing Programs at 202-402-4071 or Evelyn.Rumph@hud.gov.