Can an ESG recipient or subrecipient subgrant ESG funds to a public housing authority (PHA) or Local Redevelopment Authority (LRA)?

Date Published: January 2018

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The Housing Opportunity Through Modernization Act of 2016, Public Law 114-201 (HOTMA) amended the McKinney-Vento Homeless Assistance Act to permit units of general purpose local government to sub-award their ESG funds to Public Housing Agencies (PHAs) and Local Redevelopment Authorities (LRAs). The statutory authority to sub-award Emergency Solutions Grants (ESG) Program funds to a PHA or LRA applies to all ESG Program grant funds, including funds awarded before HOTMA was enacted. However, this authorization is subject to certain conditions and requirements, as explained in Notice CPD-17-10: Sub-awarding Emergency Solutions Grants Program Funds to Public Housing Agencies and Local Redevelopment Authorities.

Here are some key points from the Notice:

  • ESG Program Grants to Metropolitan Cities and Urban Counties. The HOTMA amendment provides explicit authority to local governments to sub-award funds to PHAs and LRAs. Any local government that receives an ESG Program grant from HUD or receives ESG Program funds from an urban county as a member government may sub-award all or a portion of those funds to a PHA or LRA, subject to the requirements described in section IV of Notice CPD-17-10.
  • ESG Program Grants to States. The HOTMA amendment does not authorize States to directly sub-award ESG funds to PHAs or LRAs. However, subject to the ESG requirements, any local government that receives ESG Program funds from a State may sub-award such funds to a PHA or LRA under the conditions described in section IV of Notice CPD-17-10. As a result of changes previously made by the Moving Ahead for Progress in the 21st Century (MAP-21) Act, Public Law No. 112-141 (2012), a State may sub-award to an LRA if the LRA is an instrumentality of a unit of general purpose local government, other than a PHA, that is established pursuant to legislation and designated by the chief executive to act on behalf of the local government with regard to ESG activities.
  • Private Nonprofit Organizations. Private nonprofit organizations that receive ESG Program funds as subrecipients are prohibited from sub-awarding ESG Program funds to PHAs or LRAs.

Tags: ESG Financial and Grants Management - Financial and Grants Management - General

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