CDBG Entitlement FAQ

What is the time frame in which we must disburse advanced funds to our subrecipients for eligible program expenses? Is it once CDBG funds are drawn down and wired to our county treasurer? How do we handle the funds if that time frame has elapsed?

Date Published: May 2015

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Disbursement of funds must occur in a timely manner. The general rule is that CDBG funds must be used within three business days they are drawn down. If disbursement takes longer than three business days, written justification should be maintained in the files. Funds drawn down erroneously must also be returned to HUD in a timely manner.

Per 24 CFR Part 85.21(b) / [2 CFR 200.305(b)] [also referenced at 24 CFR 570.502(b)(3)(i)], recipients and subrecipients are required to have procedures in place to minimize the amount of time that elapses between the transfer of CDBG funds and the disbursement of those funds by the grantee or subrecipient in accordance with Treasury regulations at 31 CFR Part 205. Recipients (and subrecipients) must include accurate information in drawdown requests. 

It should be noted that funds held in an escrow account for rehabilitation activities generally must be disbursed within 10 days. Reference 24 CFR 570.511(a)(4).

Tags: CDBG Entitlement Program Cost Reasonableness