CDBG Entitlement FAQ

Vehicles are often used by code enforcement inspectors for transportation from one site to another. May CDBG funds be used to pay for that vehicle?

Date Published: April 2019

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The regulation at 24 CFR 570.207(b)(1) states that purchase of equipment with CDBG funds is generally ineligible. CDBG funds may be used to lease vehicles. In addition, 24 CFR 570.207(b)(1)((iii) states that CDBG funds may be used to purchase or pay depreciation in accordance with 2 CFR part 200, subpart E. Depreciation costs may be paid in accordance with 2 CFR 200.436 proportionate to the amount of time the vehicle is used for CDBG-assisted code enforcement.

The entire cost can be paid for with CDBG only if the vehicle is used exclusively for CDBG-eligible code enforcement inspections. However, it may be difficult to show that a given vehicle is used exclusively in one or more deteriorated areas, consistent with CDBG requirements, or exclusively by staff whose entire salaries are paid for with CDBG funds because they perform only CDBG-eligible code enforcement inspections. On the other hand, if a grantee has records showing how much time/miles a vehicle is used for CDBG-eligible code enforcement inspections, it can charge a proportion of the total lease or use to CDBG. Or, if code enforcement staff make use of cars in a municipal fleet or motor pool, without having vehicles devoted exclusively to code enforcement, use allowances may be recovered via a cost allocation plan. The use allowance is an eligible activity delivery cost [see 24 CFR 570.207(b)(1)(iii)].

Tags: CDBG Entitlement Program Code Enforcement