ESG FAQ
Q

Can ESG funds be used in areas outside the recipient’s boundaries?

Date Published: December 2012

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A

Yes, as long as the recipient’s residents benefit from that use, as described below.

Because ESG allocations are based on recipients’ relative needs, each recipient must use its funds to benefit its own residents. Accordingly, any use of funds outside the jurisdiction must benefit the recipient’s residents. Here are some examples: 

  1. The recipient is an urban county and determines that it can serve its residents by funding a shelter or service provider located in the middle of the county but outside the urban county’s boundaries. 

  2. The recipient uses funds outside its boundaries for a jointly funded activity (such as a centralized assessment system) that serves the whole Continuum of Care area and benefits the recipient’s residents in reasonable proportion to the recipient’s share of the activity’s funding.    

  3. A resident of the recipient’s jurisdiction is eligible for rapid re-housing assistance but wants to live in an area outside the recipient’s boundaries and the recipient does not require that all program participants live within a particular area for the period in which the rental assistance is provided (pursuant to 24 CFR § 576.106). 

In circumstances like these, where the funds actually benefit the recipient’s residents, the recipient may use ESG funds outside its boundaries. However, the recipient should also keep in mind:

  1. The recipient’s action plan must describe any intention to fund an activity outside the recipient’s boundaries (including the percentage of funds designated for that activity) and explain how that activity addresses the recipient’s priority needs and objectives, as required under 24 CFR § 91.220(d) and (f) for local governments and 24 CFR § 91.320(d) and (f) for states. 

  2. If a recipient funds an activity outside the recipient’s boundaries, the recipient must ensure through its subrecipient agreement that the funds will be used to benefit the recipient’s residents.

Tags: ESG Program Requirements - Program Requirements - General

FAQ ID:

1091