What if my organization is not a Community Development Block Grant (CDBG) entitlement? How is program income treated for my organization before and after closeout?

Date Published: July 2016

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Most program income will be received by CDBG entitlement cities and counties, and by states, which have systems and procedures to manage NSP revenues, which are treated in most respects like CDBG revenues. However, non-profit consortium members in NSP2 grant consortia that receive revenues generated by NSP projects will not have access to the state and municipal CDBG tracking systems. Therefore, the transfer option will not be available for private non-profit grantees.

The CDBG regulation and Office of Management and Budget (OMB) circulars implemented at 24 CFR 84.24(e) or 2 CFR 200.307(f), as applicable, do not require that non-profit grantees continue to treat revenues generated from use of NSP funds and received after grant closeout as federal funds unless HUD regulations or the terms and conditions of the award provide otherwise. Thus, for grantees that are not direct formula CDBG grantees (non-profits and non-entitlement local governments, including those that are part of a consortium), HUD is requiring that revenues generated by projects funded before closeout but received within 5 years after grant closeout must be used for NSP-eligible activities and meet NSP benefit requirements only; no other federal requirements would apply to income earned more than five years after closeout. Program income received more than five years after closeout will be treated as miscellaneous revenues, although HUD encourages such grantees to apply NSP principles to subsequent uses of the funds.

For grantees that receive NSP funding from states, the options for transferring program income will be determined at the state level.

Tags: NSP Financial and Grants Management - Program Income

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