[Federal Register Volume 64, Number 224 (Monday, November 22, 1999)]
[Rules and Regulations]
[Pages 63680-63681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30366]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 570
[Docket No. FR-4449-F-02]
RIN 2506-AC00
Community Development Block Grant (CDBG) Program; Clarification
of the Nature of Required CDBG Expenditure Documentation; Final Rule
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: On July 15, 1999, HUD published an interim rule that clarifies
the level of expenditure documentation that Community Development Block
Grant (CDBG) grantees and subrecipients must maintain to identify the
use of CDBG funds provided for assisted activities. This change
provides the public with more assurance that CDBG funds are used only
for allowable purposes. This rule makes final the amendments made by
the July 15, 1999 interim rule, and takes into consideration the public
comment received on the interim rule. HUD has adopted the interim rule
without change.
DATES: Effective Date: December 22, 1999.
FOR FURTHER INFORMATION CONTACT: Sue Miller, Entitlement Communities
Division, Office of Community Planning and Development, Department of
Housing and Urban Development, 451 Seventh Street, SW, Room 7282,
Washington, DC 20410; telephone (202) 708-1577 (this number is not
toll-free). Persons with hearing or speech-impairments may access this
number via TTY by calling the toll-free Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
[[Page 63681]]
I. The July 19, 1999 Interim Rule
On July 19, 1999 (64 FR 38812), HUD published an interim rule that
clarified the level of expenditure documentation that Community
Development Block Grant (CDBG) grantees and subrecipients must maintain
to identify the use of CDBG funds provided for assisted activities. The
lack of appropriate documentation increases the potential for misuse of
CDBG funds. The change made by the July 19, 1999 interim rule provides
the public with more assurance that CDBG funds are used only for
allowable purposes.
OMB Uniform Administrative Requirements for grants to local
governments and nonprofit organizations have long required that
grantees and subrecipients maintain records which adequately identify
the source and application of funds provided for financially-assisted
activities. This requirement is found at 24 CFR 85.20(b)(2) for local
governments and at 24 CFR 84.21(b)(2) for nonprofit organizations.
These requirements are specifically made applicable to the CDBG program
by 24 CFR 570.502(a)(4) and 24 CFR 570.502(b)(3), respectively. The
CDBG regulations at Sec. 570.506(h) also require maintaining financial
records in accordance with the applicable requirements listed in
Sec. 570.502.
The interim rule amended Sec. 570.506(h) to clarify the level of
documentation that is needed for grantees and subrecipients to
demonstrate compliance with the existing financial management
requirements in 24 CFR parts 84 and 85 relating to maintaining adequate
records to identify the use of funds provided for assisted activities.
A broad range of types of documentation is described in an effort to
reflect the myriad of different activities and financing mechanisms
that can be undertaken with CDBG funds.
The preamble to the July 19, 1999 interim rule provides additional
details regarding the amendment to HUD's CDBG program regulations at
Sec. 570.506(h).
II. Discussion of Public Comment Received on the July 19, 1999
Interim Rule
The public comment period on the July 19, 1999 interim rule closed
on September 17, 1999. By close of business on that date, HUD had
received a single public comment on the interim rule. The public
commenter expressed support of the interim regulatory amendment. The
commenter wrote that ``[g]rantees should not have difficulty
maintaining evidence to support how CDBG funds provided to for-profit
entities are expended.'' Accordingly, HUD has adopted the amendments
made by the interim rule without change.
III. Findings and Certifications
Paperwork Reduction Act Statement
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520), and assigned OMB control number 2506-0077. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a valid
control number.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this final rule, and in so
doing certifies that this rule will not have a substantial economic
impact on small entities. This final rule will have no economic impact
on small entities since it is a clarification of existing policy.
Environmental Impact
This amendment is categorically excluded from environmental review
under the National Environmental Policy Act (42 U.S.C. 4321). In
keeping with the exclusion provided for in 24 CFR 50.19(c)(1), this
amendment does not direct, provide for assistance or loan and mortgage
insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction; or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(2), this
amendment is categorically excluded because it amends an existing
document where the existing document as a whole would not fall under
the exclusion in 24 CFR 50.19 (c)(1), but the amendment by itself would
do so.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final rule does not have
federalism implications and does not impose substantial direct
compliance costs on State and local governments or preempt State law
within the meaning of the Executive Order.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers for the
Community Development Block Grants program are 14.218, 14.219, 14.225,
14.227, 14.246, and 14.248.
List of Subjects in 24 CFR Part 570
Administrative practice and procedure, American Samoa, Community
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Lead poisoning, Loan
programs--housing and community development, Low and moderate income
housing, New communities, Northern Mariana Islands, Pacific Islands
Trust Territory, Pockets of poverty, Puerto Rico, Reporting and
recordkeeping requirements, Small cities, Student aid, Virgin Islands.
PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS
Accordingly, the interim rule amending 24 CFR part 570, which was
published at 64 FR 38812 on July 19, 1999, is adopted as a final rule
without change.
Dated: November 16, 1999.
Cardell Cooper,
Assistant Secretary for Community Planning and Development.
[FR Doc. 99-30366 Filed 11-19-99; 8:45 am]
BILLING CODE 4210-29-P
