APRIL 2015 14.169 COMPREHENSIVE HOUSING COUNSELING (CHC) COMPREHENSIVE HOUSING COUNSELING (CHC) Federal Awarding Unit: U.S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT Federal Authorization: Section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x)(the Act ), Section 4 of the Department of Housing and Urban Development Act (42 U.S.C. 3533) as amended by Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank ), and the Consolidated Appropriations Act, 2014 (Pub. L No. 76). State Agency: North Carolina Housing Finance Agency (NCHFA) Agency Contact Person Program: Rich Lee Foreclosure Prevention Team Leader (919) 877-5688 rylee@nchfa.com Address Confirmation Letters To: Sandy Giordano, Accountant Grants N.C. Housing Finance Agency 3508 Bush Street Raleigh, NC 27609-7509 Agency Contact Person Financial: Rich Lee Foreclosure Prevention Team Leader (919) 877-5688 rylee@nchfa.com The auditor should not consider the Supplement to be safe harbor for identifying audit procedures to apply in a particular engagement, but the auditor should be prepared to justify departures from the suggested procedures. The auditor can consider the Supplement a safe harbor for identification of compliance requirements to be tested if the auditor performs reasonable procedures to ensure that the requirements in the Supplement are current. The grantor may elect to review audit working papers to determine that audit tests are adequate. I. PROGRAM OBJECTIVES To help North Carolina families and individuals address their housing need(s). This includes helping households: Evaluate their readiness for a buying a home, understand their financing and down payment options, and navigate what can be an extremely confusing and difficult process. Assess various options to prevent losing their home to foreclosure, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation. Find affordable rental housing and offer financial literacy training to individuals and families struggling to repair credit problems that restrict their housing options. B-4 14.169 1
Secure emergency shelter and/or transitional housing until they are ready to move into a more permanent living situation. Understand Reverse Mortgages, also referred to as Home Equity Conversion Mortgages (HECM) which can assist elderly homeowners convert equity in their homes into income that can pay for home improvements, medical costs, and other living expenses. II. PROGRAM PROCEDURES In partnership with a number of our housing counseling partner agencies, NCHFA applied for a FY 2014 - FY 2015 Comprehensive Housing Counseling (CHC) grant from the U.S. Department Housing & Urban Development (HUD). We received a grant allocation from HUD and we reallocated funds to housing counseling partners that agreed to be Sub-grantees. NCHFA provided each Sub-grantee with an initial grant allocation based in part on the number of people assisted the previous fiscal year (*as captured in their final FY 2013 HUD 9902), as well as the amount of their FY 2013 CHC grant, if applicable. As required by HUD, all of our Sub-grantees are approved HUD approved housing counseling agencies or agencies that agreed to meet HUD standards for an approved housing counseling agency. Other Federal and State program requirements were outlined in the FY 2014 HUD Housing Counseling Program Sub-Grant Agreement (Sub-Grant Agreement) signed by each Sub-grantee. Sub-grantees are reimbursed on a quarterly basis for expenses incurred providing one-on-one housing counseling and/or group education services to North Carolina households as well as for other program-eligible expenses as outlined in the Sub-Grant Agreement. To request reimbursement, Sub-grantees submit a Quarterly Expense Invoice and Quarterly Report and supply appropriate expense documentation as outlined in the Sub-Grant Agreement. In addition, Sub-grantees must document counseling and group education activities through the participating agency s HUD compliant Client Management System (CMS) and submit appropriate client information on a quarterly basis to HUD s Housing Counseling System (HCS) utilizing HUD form 9902. Finally, Sub-grantees agree to cooperate with all HUD and NCHFA oversight activities, requests for access to facilities, requests for access to agency s CMS, and requests for information, including, but not limited to, complete client counseling files and client-level data. Oversight may include, but is not limited to, remote inspection of client counseling files, on-site performance reviews by HUD or NCHFA staff or designee, and mystery shopping. III. COMPLIANCE REQUIREMENTS A. ACTIVITIES ALLOWED OR UNALLOWED Sub-grantees submitted a Projected Performance Work Plan on HUD form 9902 to NCHFA which outlined projected housing counseling services and group workshops to be provided by the Sub-grantee and represented the scope of services under their Sub-Grant Agreement. Grant funds shall be used only for the eligible activities described in Section III.C of the HUD Housing Counseling Notice of Funding Availability (NOFA) that are consistent with the Sub-grantee s HUD-Approved Housing Counseling Action Plan. B-4 14.169 2
B. ALLOWABLE COSTS/COST PRINCIPLES Funds may be used to help cover expenses related to the provision of one-on-one housing counseling and group education services. Sub-grantee expenses are paid on a reimbursement basis only for actual expenses incurred as documented in their Quarterly Expense Invoice. Sub-Grantees are prohibited from using any part of Grant Funds to satisfy a delinquent federal debt. Allowable Costs are costs incurred in the performance of this Grant Agreement that are determined by HUD to be allowable, allocable, and reasonable in accordance with the provisions of the Sub-Grant Agreement, and applicable Federal cost principles as outlined in Cost Principles for Non-Profit Organizations (OMB Circular A-122), 2 C.F.R. Part 230, Cost Principles for State, local and Indian Tribal Governments (OMB Circular A-87), 2 C.F.R. Part 225, and Cost Principles for Educational Institutions (OMB Circular A-21), 2 C.F.R. Part 220. If these circulars are revised during the period of performance of this Agreement the most recent revision shall apply. No indirect costs will be reimbursed with grant funds and no fee, profit, or other increment above allowable costs shall be paid to Sub-Grantee. CHC grant funds are not intended to cover the total cost of carrying out a Sub-grantee s housing counseling program and Sub-grantee shall obtain funds from sources other than HUD to cover the portion of the program not funded by HUD. However, Sub-grantee shall only invoice for cost of counseling services for which the Subgrantee does not receive reimbursement from any other funding source, including fees. In particular, Sub-grantee is prohibited from using Grant funds to reimburse counseling activity costs for any counseling recipient for which they received National Foreclosure Mitigation Counseling (NFMC) Program reimbursement. For example, if a Sub-grantee receiving reimbursement from NFMC for counseling Client A, the Sub-grantee cannot also use CHC funds to cover costs related to counseling Client A that may have exceeded the NFMC reimbursement. C. CASH MANAGEMENT Sub-grantees receive funding under this program on a reimbursement rather than an advance basis. Therefore, no audit testing is necessary with respect to the federal cash management requirements of Part III of the Circular A-133 Compliance Supplement. D. DAVIS-BACON ACT Davis-Bacon Act is Not Applicable. Sub-Grantees shall comply with all programmatic disclosure and conflict of interest requirements provided in the Housing Counseling regulations at 24 C.F.R. Part 214, as well as those in 24 C.F.R. Parts 84 and 85, and HUD Handbook 7610.1-Rev. 5. Sub-Grantees must provide to all clients a disclosure statement that explicitly describes the various types of services provided by the agency and any financial relationships between this agency and any other industry partners. The disclosure must clearly state that the client is not obligated to receive any other services offered by the organization or its exclusive partners. HUD Reform Disclosures. Sub-grantee shall comply with the disclosure requirements of Section 102(b) of the HUD Reform Act of 1989 (42 U.S.C., 3545(b)) and it s implementing regulations, 24 C.F.R. Part 4. To satisfy this requirement, Sub-Grantee shall also complete and return to NCHFA the Form HUD-2880, Applicant/Recipient Disclosure Update Report included with their Sub-grantee agreement. The completed Form is hereby incorporated into this Agreement. Sub-Grantee shall update the Form HUD-2880 as required by the HUD Reform Act B-4 14.169 3
of 1989 and 24 C.F.R. 4.11. NCHFA Requirements. If not already on file, Sub-Grantee must provide the Agency with a copy of its policy addressing conflicts of interest that may arise involving Sub-Grantee s management employees and the members of its board of directors or other governing body. The policy shall address situations in which any of these individuals may directly or indirectly benefit from the use of Program funds and shall include actions to be taken by the Sub-Grantee or any individual, or both, to avoid conflicts of interest and the appearance of impropriety. The policy shall be in accordance with N.C.G.S. 143C-6-23 and shall be provided to the Agency prior to any disbursement of Grant funds to the Sub-Grantee. Sub-Grantees must not engage in exclusivity agreements with clients seeking foreclosure mitigation, delinquency, or other housing counseling or other interested parties such as servicers or lenders, nor shall they otherwise engage in practices which exclude other counseling agencies from working with its clients or its clients servicers or lenders, should the client willingly seek assistance from another organization. Sub-Grantees are also required to sign the NCHFA s Conflict of Interest and Anti-Fraud Policy Confirmations included with their Sub-grantee Agreement. E. ELIGIBILITY CHC-funded services are not limited or targeted to any one segment of the population and Subgrantees agree to provide counseling offices and services that are accessible to persons with a disability. In addition, Sub-grantees, where applicable, agree to serve all individuals referred to them by HUD or other participating agencies, unless the individual seeks assistance in an area, or in a format, in which Sub-grantee does not have expertise, lacks sufficient resources, or does not have a counseling sessions available during the time period sought by the individual. F. EQUIPMENT AND REAL PROPERTY MANAGEMENT Sub-grantees may use CHC funds to purchase equipment needed to provide housing counseling and/or group education services. However, any equipment purchased with CHC funds must be used exclusively by the Sub-grantee s housing counseling program staff. G. MATCHING, LEVEL OF EFFORT, EARMARKING Sub-grantees are not required to provide any match for CHC funds. However, Sub-grantees are required to maintain, and make available to NCHFA upon request, evidence that non-federal leveraged resources cited by Sub-grantee in NCHFA s application to HUD were actually provided to Sub-grantee. H. PERIOD OF AVAILABILITY OF FEDERAL FUNDS Federal funds are available to reimburse Sub-grantees for eligible grant expense during the 18- month grant term: OCTOBER 1, 2013 through MARCH 31, 2015. I. PROCUREMENT AND SUSPENSION AND DEBARMENT Sub-grantees shall comply with HUD s requirements for participants at 2 C.F.R. Part 2424, which includes prohibiting Sub-grantee from doing business to undertake the activities under their Sub-Grant Agreement with persons who are excluded or disqualified from federal programs. B-4 14.169 4
J. PROGRAM INCOME K. REAL PROPERTY ACQUISITION & RELOCATION ASSISTANCE L. REPORTING This program requires Sub-grantees to submit Quarterly Expense Invoices and Quarterly Reports to NCHFA on the schedule outlined in the Sub-Grant Agreement. M. SUBRECIPEINT MONITORING Sub-Grantees must cooperate with all HUD and NCHFA oversight activities, requests for access to facilities, requests for access to agency s CMS, and requests for information, including, but not limited to, complete client counseling files and client-level data. Oversight may include, but is not limited to, remote inspection of client counseling files, on-site performance reviews by HUD or NCHFA staff or designee, and mystery shopping. If Sub-Grantees, including those that provide legal services, has other obligations that require client information to be kept confidential, Sub-Grantees must take measures to ensure HUD and NCHFA have access to client files and information for audit and oversight purposes that demonstrate to the satisfaction of HUD and NCHFA that Sub-Grantee is in compliance with 24 C.F.R. Part 214, HUD Handbook 7610.1-Rev. 5, and the requirements of their Sub-grantee Agreement. N. SPECIAL TESTS & PROVISIONS B-4 14.169 5