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From NCSHA
(04/10/21) The US Treasury Department released the framework for the reallocation of funds from the emergency rent assistance program (ERA) authorized by the 2021 consolidated finance law (ERA 1). This legislation, which provided the first $ 25 billion of ERA resources, requires the Treasury to identify “excess funds” among the amounts that beneficiaries have not committed as of September 30, 2021, and to reallocate these resources to beneficiaries who have committed at least 65% of their initial IBA. 1 allocation.
For the first time, the Treasury has published a definition of the term obligatory for the purposes of the PLAR. The Treasury will consider the funds committed if they were spent to provide financial assistance or housing stability services under the PLAR; are required to pay for assistance promised in a letter of commitment issued to induce a landlord to enter into a rental agreement with an eligible household; or are necessary to honor a contractual obligation between a beneficiary and a third party. The contractual obligation only refers to a case where aid has been approved but payment has not yet been made, including a block payment agreement with a larger landlord or utility company. A grant agreement with a sub-recipient to administer ERA funding does not count as a contractual obligation unless the aid has been approved for an eligible household but not yet paid.
Each beneficiary must provide the Treasury with a “compulsory funds certificate” specifying the amount he has committed as of September 30, 2021. If the beneficiary has committed less than 65% of his allocation, he is also required to submit a self-assessment of the fund. improvement program and plan for approval by the Treasury before November 15.
To determine the “excess” amount of the fund, the treasury will take into account a beneficiary’s expense ratio as of September 30. A beneficiary’s expenditure ratio is the proportion of its total aid spent compared to 90% of the beneficiary’s total grant (the total grant reduced by 10% to take into account that a beneficiary can use up to 10%). percent of total funds for administrative expenses). It is unclear how the Treasury will account for expenditures on housing stability services, as these expenditures are not collected in the monthly data reports that recipients provide to the Treasury. NCSHA and other national organizations representing beneficiaries had argued to the Treasury that beneficiary expenditure ratios should be adjusted to reflect the fact that the Treasury does not have monthly data on housing stability service expenditure.
For the first assessment, a recipient whose expense ratio is less than 30% (the minimum expense ratio) will be considered to have excess funds, defined as the difference between the recipient’s expense ratio and the minimum expense ratio. The treasury will assess recipients’ expense ratios approximately every two months, increasing the minimum expense ratio by five percent for each calendar month. The Treasury will carry out the final assessment on the basis of the data communicated until March 31, 2022.
If the Consolidated Revenue Fund determines, based on this process, that a recipient has excess funds, the Consolidated Revenue Fund may still reduce or eliminate the amount to be recovered under the following circumstances:
- For the first evaluation only: if a beneficiary has not reached the minimum expenditure ratio of 30% as of September 30 but is able to respect this minimum expenditure ratio or to oblige 65% of its grant by November 15, the Recipient may submit to the Treasury a certificate signed by an authorized official of the Recipient with this updated information, in which case the Treasury will not recover the funding.
- For the first appraisal only: As noted above, a recipient who does not meet the 65% obligation threshold must submit a program improvement plan to the Consolidated Revenue Fund identifying the policies and practices recommended by the Consolidated Revenue Fund as the recipient. has already implemented, whether it has adopted policies or practices that the Treasury has discouraged, the main obstacles the recipient faces in delivering the PLAR, the actions the recipient will take to improve performance and projection the beneficiary of the expenses of the ERA for the next four months. If the Treasury approves the plan, it will limit the recovery to no more than 15 percent of the recipient’s funds.
- Applicable to all appraisals: If the recipient has suffered from urgent circumstances, such as a natural disaster, the Treasury may reduce or eliminate the amount of the clawback.
A beneficiary may also request to transfer part or all of their allocation to another beneficiary in the beneficiary’s State if the beneficiary has committed at least 65% of their own allocation at the time of the transfer.
Grantees who have committed 65% or more of their ERA 1 grants can request additional reallocated funds from the treasury starting October 15. the competence of the concessionaire. Where possible, the Treasury will reallocate recipient funds within the same state. A recipient who receives reallocated funding can request an extension to spend those dollars until December 29, 2022; however, the recipient’s initial grant must be spent by September 30, 2022.
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