CDBG Entitlement FAQ

Can a city utilize CDBG contingency funds from previously awarded projects to incur or pay for Pre-Award costs as a method to get a jump-start on expending its entitlement funds, or does the source of the Pre-Award funding have to be city general revenue funds or some other non-federal funding source?

Date Published: May 2015

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The Reimbursement for Pre-Award Costs provision is found in the Community Development Block Grant regulations at 24 CFR 570.200(h). Under this provision, before the date of the grant agreement, a grantee or their subrecipients may carry out a project using non-CDBG funds with the understanding that they may reimburse those non-CDBG funds from one or more future CDBG program grants. Grantees may use general funds or obtain a private loan to assist the activity. The pre-award project must meet all the requirements that would otherwise apply to a CDBG funded project (be in a Consolidated Plan/Action plan or amended plan, environmental review, Davis-Bacon, and national objective compliance). Citizens also must be notified of the extent the pre-award will affect future CDBG grants. If there are funds that were unutilized from a previously assisted CDBG-assisted activity, those funds may be reprogrammed for another eligible activity that meets a national objective. Please note that whenever a grantee changes the use of CDBG funds from one activity to another that triggers a substantial amendment which requires that citizens be provided an opportunity to comment on the substantial amendment.

Tags: CDBG Entitlement Program Audits and Budgeting