How to apply

As mentioned in previous sections, at least 70% of the grant funds must benefit low- and moderate-income persons. Families with reported income no greater than 80% of the County’s Median Family Income (MFI) are considered low-to-moderate income (LMI).  See tables below. 

2026 Income Limits - Area Median Income for Weld County (provided by HUD)

80% Annual Median Income

50% Annual Median Income

30% Annual Median Income

When meeting the HUD National Objective of serving low to moderate-income (LMI) persons, it is necessary to consider the persons served by a proposed activity.  The proposed activity may benefit all LMI persons in a certain area or be designed to benefit for exclusive use by a segment of the population presumed to be LMI. 

LMI Area

The following records will demonstrate compliance under this national objective benefit category.   

• Boundaries of service area;
• Percentage of LMI persons that reside in the service area; and       
• The data used for determining percentage of LMI persons.

LMI Limited Clientele

 Under this benefit category, one of the following five types of records must be kept:      

1. Documentation showing that the activity is designed for exclusive use by a segment of the population presumed by HUD to be LMI persons; or 
2. Documentation describing how the nature and the location of the activity establishes that it will be used predominantly by LMI persons; or       
3. Data showing the family size and annual income of each person receiving the benefit; or  
4. Data showing that barriers to mobility or accessibility have been removed and how the barrier removal was restricted to the extent feasible to one of the particular cases authorized under this category; or   
5. Documentation showing that the activity qualifies under the special conditions regarding job services where less than 51 percent of the persons benefiting are LMI persons.

All projects must comply with federal regulations applicable to individual projects. Subrecipients share joint responsibility for carrying out permitted activities in conformance with applicable Federal requirements.  These regulations include but are not limited to: Davis-Bacon labor standards, Uniform Relocation Act, Copeland Act (Anti-kickback), Fair Housing and Equal Opportunity regulations, federal procurement standards, federal fiscal/audit standards and conflict of interest standards.

All HUD- assisted projects are required to undergo an environmental review, performed by the County, to evaluate environmental impacts. The analysis includes both how the project can affect the environment and how the environment can affect the project, site, and end users. Under the applicable regulations for any project receiving CDBG assistance, an environmental review must be performed before any funds, regardless of source, are committed to a project.  The environmental review will need to be completed prior to receiving a notice to proceed with the project.

All applicants that receive an award letter must agree to sign a subrecipient agreement which is used as a management tool while the project is in effect. The subrecipient agreement contains:

1. A description of work to be completed and budget;
2. The reports to be submitted
3. Uniform requirements, standards, and conditions; and
4. Set timelines, monitoring, and termination elements.

The subrecipients’ administrative requirements including financial management, record keeping, reporting and payment procedures, procurement and use and reversion of assets are discussed below followed by a listing of federal regulations that apply to subrecipients.   

See the Sample Subrecipient Agreement (Exhibit A)(PDF, 312KB).

Accounting Standards

The Subrecipient agrees to comply with 2 CFR 200 and adhere to the accounting principles and procedures required therein, utilize adequate internal controls and maintain necessary source documentation for all costs incurred.

Cost Principles. The Subrecipient shall administer its program in conformance with 2 CFR 200 as applicable.  These principles shall be applied for all costs incurred, both direct and indirect. 

Direct costs are those that can be identified specifically with a particular final cost objective. Typical direct costs chargeable to Federal awards are a. Compensation of employees for the time devoted and identified specifically to the performance of those awards.  b. Cost of materials acquired, consumed, or expended specifically for the purpose of those awards. c. Equipment and other approved capital expenditures. d. Travel expenses incurred specifically to carry out the award.

Indirect costs are those incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted. Indirect costs include costs which are frequently referred to as overhead expenses (for example, rent and utilities) and general and administrative expenses.

No indirect costs may be applied by local government subrecipients to the Weld County CDBG program.

Subrecipients of CDBG funds must have financial management systems in place that comply with the following standards:

• Provide effective control over and accountability for all funds, property and other assets.
• Identify the source and application of funds for federally sponsored activities, including records and reports that:

• Verify the “reasonableness, allowability and allocability” of costs; and

• Verify that funds have not been used in violation of any of the restrictions or prohibitions that apply to the federal assistance (using budget controls and adequate accounting records).

• Permit the accurate, complete and timely disclosure of financial results in accordance with HUD reporting requirements or, for subrecipients, grantee reporting requirements.
•  Minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the subrecipient.

The subrecipients financial management system should have both internal controls and project budget controls in place. 

Internal Controls

The basic elements of an internal control system should include:

• An organizational chart setting forth the actual lines of responsibility of personnel involved in financial transactions;
• An accounting policy and procedures;
• A chart of accounts;
• Adequate separation of duties; and
• Periodic comparisons of financial records.

Project Budget Controls

Subrecipients of CDBG funds must have procedures in place to compare and control expenditures against approved budgets for CDBG-funded activities which should:

• Periodically compare actual obligations and expenditures to date against planned obligations and expenditures, and against projected accomplishments for such outlays;
• Report deviations from budget and program plans, and request approval for budget and program plan revisions; and
• Have accounting records that sufficiently identify the source and application of CDBG funds provided to them.

Subrecipients are required to have procedures in place to minimize the amount of time that elapses between receipt of CDBG funds and the actual disbursement of those funds.

Any interest income must be remitted to the U.S. Treasury.

Payments for CDBG projects are on a reimbursement basis.

Audits

CDBG grantees and subrecipients that expend $1,000,000 or more in a year in Federal awards must have a single audit conducted in accordance with OMB Circular A-133 except when they elect to have a program-specific audit conducted.

• A single audit is an audit that includes both an entity’s financial statements and its federal awards (from all applicable federal programs).
• A program audit is an audit of one federal program (such as CDBG). A program-specific audit is allowed when the grantee or subrecipient expends federal awards under only one federal program.

Audits performed for grantees and subrecipients of federal funds must be performed by an independent auditor in accordance with Government Auditing Standards and must be conducted in accordance with 2 CFR 200 Subpart F. Each subrecipient is required to permit the pass-through entity and auditors to have access to the records and financial statements as necessary for the pass-through entity to comply with this part.

The standards described in this section apply to real property within the unit of general local government's control (including activities undertaken by subrecipients) that was acquired or improved, in whole or in part, using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after final close-out of the grant from which assistance to the property was provided. See 24 CFR 570.489(j).             

A unit of general local government (UGLG) may not change the use or planned use of any such property (including the beneficiaries of such use) from that for which the acquisition or improvement was made, unless the state and UGLG provide affected citizens with reasonable notice of and opportunity to comment on any proposed change, and either:

• The new use of the property qualifies as meeting one of the national objectives and is not a building for the general conduct of government; or
• If the UGLG determines, after consultation with affected citizens, that it is appropriate to change the use of the property to a use which does not qualify as meeting a National Objective, it may retain or dispose of the property for the changed use if the state’s CDBG program is reimbursed in the amount of the current fair market value of the property, less any portion of the value attributable to expenditures of non- CDBG funds for acquisition of, and improvements to, the property.
• Following the reimbursement of the CDBG program, the property no longer will be subject to any CDBG requirements.

It is the Subrecipient’s responsibility to be familiar with the procedures for each level of procurement and to request technical assistance. The Subrecipient should refer to Chapter 3 Procurement and Contracting of “Playing by the Rules: A Handbook for CDBG Subrecipients on Administrative Systems” at https://www.hudexchange.info/sites/onecpd/assets/File/Playing-by-the-Rules-Handbook-CDBG-Subrecipients-Administrative-Systems-Chapter-3.pdf

Cost Analysis

The Subrecipient shall be responsible for performing an independent cost analysis of the activity prior to bidding the activity to assist in determining the reasonableness of activity bids. Subrecipient may perform the analysis in-house if its staff has the knowledge, have it performed by the project’s architect or other professional, or request assistance.

Procurement under grants shall be made by one of the following methods:

1. MICROPURCHASES

This procedure allows recipients to acquire supplies or services totaling no more than $10,000 without publishing a formal request for proposals or invitations for bids. The recipient must distribute purchases equitably among qualified suppliers. 

2. SMALL PURCHASE PROCEDURES

The small purchase procedures allow recipients to acquire goods and services totaling no more than $250,000 without publishing a formal request for proposals or invitation for bids. This method of procurement is typically used to purchase commodities such as equipment or other materials. In the event that a grantee is purchasing materials that will exceed $250,000, they must use the sealed bid process. Appropriate documentation must be maintained.

3. COMPETITIVE SEALED BIDS (Formal Advertising)

Sealed bids are publicly solicited, and a firm-fixed contract, lump sum or unit price is awarded to the lowest responsive, responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids.

Sealed bids (Formal Advertising) should be used for all construction contracts or for goods costing more than $250,000.

In order for formal advertising to be feasible, appropriate conditions must be present, including, at a minimum, the following:

• Invitation for solicitations must be publicly advertised. Sufficient time must be allowed to receive an adequate number of bids from known suppliers prior to the date for opening of bids;
• The invitation for bids, including specifications and pertinent attachments, shall clearly define the items or services needed in order for the bidders to properly respond to the invitation;
• All bids shall be opened publicly at the time and place stated in the invitation;
• A firm fixed-price contract award shall be made by written notice to the responsible bidder whose bid, conforming to the invitation for bids, is the lowest. Where specified in the bidding documents factors such as discounts, transportation costs and life cycle costs shall be considered in determining which bid is lowest. Payment discounts may only be used to determine low bid when prior experience of the grantee indicates that such discounts are generally taken;
• Any or all bids may be rejected when there are sound documented business reasons for doing so, that are in the best interest of the program;
• When acquiring architectural or engineering services, either an RFP or a RFQ may be used.  Note that if an architectural or an engineering firm is being hired to provide a non-architectural/engineering service that service must be procured using either the small purchases process or an RFP. For example, some engineering firms also provide construction and grants management services. In that situation, a RFQ cannot be used and either the small purchases (if it is less than $250,000) or an RFP must be used.

4. COMPETITIVE NEGOTIATION

Using this method, proposals are requested from a number of sources and the request for proposals is publicized. Negotiations are normally conducted with more than one of the sources submitting offers; either a fixed price or cost reimbursable type contract is awarded, as appropriate. If competitive negotiation is used for procurement under a grant, the following requirements shall apply:

• Proposals shall be solicited from an adequate number of qualified sources to permit reasonable competition consistent with the nature and requirements of the procurement. The "Request for Proposal" shall be publicized and reasonable requests by other sources to compete shall be honored to the maximum extent practicable;
• The "Request for Proposal" shall identify all significant evaluation factors including price or cost where required and their relative importance;
• Subrecipient shall provide mechanisms for technical evaluation of proposals received, determinations of responsible proposers for the purpose of written or oral discussions, and selection for contract award;
• Award may be made to the responsible proposal that will be most advantageous to the procuring party, price and other factors considered. Unsuccessful proposals should be notified promptly;
• Subrecipient may utilize competitive negotiation procedures for procurement of professional services, whereby competitors' qualifications are evaluated, and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation.

5. NONCOMPETITIVE NEGOTIATION (Sole Source)

This method is referred to as "sole source" procurement. This procurement method is by solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. Noncompetitive negotiation may be used when the award of a contract is infeasible under small purchase, competitive bidding (formal advertising) or competitive negotiation procedures.

Circumstances under which a contract may be awarded by noncompetitive negotiation are limited to the following upon written authorization of the County CDBG program:

• The item is available only from a single source; or
• Public emergency when the urgency for the requirement will not permit a delay incident to competitive solicitation; or
• After solicitation of a number of sources, competition is determined inadequate.

All contracts and subgrants for construction or repair shall include a provision for compliance with the Federal Copeland "Anti-Kickback Act" (18 USC 874 et. Seq.) as supplemented in Department of Labor Regulations (29 CFR Part 3). This Act provides that each contractor or subgrantee shall be prohibited from including, by any means, any person employed in the construction, completion or repair of public work to give up any part of the compensation to which he/she would otherwise be entitled. The subrecipient shall report all suspected or reported violations to the US Department of Labor and the Weld County CDBG office.

Grantees and subrecipients must not make any award (subgrant or contract) to any organization which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, ''Debarment and Suspension.''  This applies to any CDBG assisted contract at any tier in the process. Learn more about this requirement.

Accurate record keeping and reporting are crucial to the successful management of your CDBG-funded activities.  There are three (3) types of files the subrecipient must maintain: Administrative, Financial and Project. The records/files must be maintained for four (4) years.

Project File Types

A. Sub-Recipient Agreement

B. Project Start-up

C. Financial Management and Reporting

D. Environmental (provided by the county)

E. Civil Rights

F. Labor Standards (if applicable)  

G. Acquisition and Replacement (if applicable)

H. Relocation (if applicable)

The Subrecipient shall maintain all records required by the Federal regulations specified 24 CFR 570.506 that are pertinent to the activity(ies) to be funded with CDBG funds including all necessary information relative to the other program requirements specified in Subpart K of 24 CFR Part 570 which includes labor standards; national flood insurance; employment and contracting opportunities; lead-based paint; use of debarred, suspended, or ineligible contractors or subrecipients; and conflict of interest.

Each project or case file should include documentation of the National Objective being met, characteristics and location of beneficiaries, eligibility of the activity, compliance with special program requirements, allowability of the costs, and status of the case/project.

Each project/activity file should include the following documentation:

• Eligibility of the activity;
• Evidence of having met a national objective;
• Subrecipient agreement;
• Any bids or contracts;
• Characteristics and location of the beneficiaries;
• Compliance with special program requirements;
• Budget and expenditure information (including draw requests);
• The status of the project/activity; and
• Detail the subrecipient’s fair housing activities and equal opportunity compliance.

It should be noted that subrecipients are not responsible for providing documentation for the initial environmental review of an activity because they cannot assume the grantee’s environmental responsibilities (24 CFR 570.503(b)(5)). However, actions that a subrecipient provides to the grantee in order for it to carry out these responsibilities and other actions the subrecipient takes to abate or address environmental findings must be documented.

Representatives of the grantee, HUD, the Comptroller General of the United States, or of other authorized governmental agencies have the right of access to any pertinent records of a subrecipient to make audits, examinations, excerpts, and transcripts.

Consistent with applicable state and local laws regarding privacy and obligations of confidentiality, the subrecipient also must provide citizens with reasonable access to records on the past use of CDBG funds.

Drawdown Request

As part of a subrecipient’s periodic drawdown requests, provide information on the financial status of operations, which should include (for each activity) the amount of:

• Funds budgeted;

• Funds received in drawdowns to date;
• Funds obligated in most recent period and to date;
• Funds expended in most recent period and to date;
• Cash on hand (including program income identified as such); and
• Previous drawdowns requested but not yet received.

All draw requests must be accompanied by a progress inspection report detailing what the requested funds were used for. 

Regular progress reports are required from subrecipients. These reports will be required quarterly and will track actual project accomplishments, obligations, and spending patternsagainst planned operations and accomplishments as specified in the project schedule and budget portions of the Subrecipient Agreement.

See Exhibit B - Draw Down Request.(PDF, 302KB)

See Exhibit C - Quarterly Progress Report(PDF, 109KB).

Each project will be monitored by the CDBG program staff. The monitoring may take place at various stages of the project. Monitoring will include compliance with the subrecipient agreement as well as with federal guidelines to include the below.

Title VI of the Civil Rights Act of 1964 (Public Law 88-352 implemented in 24 CFR Part 1): This law states that no person shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.

Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (Public Law 90-234): The Fair Housing Act prohibits discrimination in housing practices on the basis of race, color, religion, sex, and national origin. The Fair Housing Act was amended in 1988 to provide protections from discrimination in any aspect of the sale or rental of housing for families with children and persons with disabilities. The Fair Housing Act also establishes requirements for the design and construction of new rental or for-sale multi-family housing to ensure a minimum level of accessibility for persons with disabilities.

Executive Order 11063, as amended by Executive Order 12259 (implemented in 24 CFR Part 107): This order and its implementing regulations require HUD to take all actions necessary to prevent discrimination because of race, color, religion, sex, or national origin in the use, occupancy, sale, leasing, rental, or other disposition of residential property assisted with Federal loans, advances, grants, or contributions.

Section 109 of Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301 et. seq., particularly 42 U.S.C. 6101 et. seq., and 29 U.S.C. 794): This law mandates that no person on the grounds of race, color, national origin, sex, or religion shall be excluded from participation, denied the benefits of, or otherwise be subject to discrimination under any activity funded in whole or part with CDBG funds.

Section 3 of the Housing and Community Development Act of 1968 (12 U.S.C. 1701u): This section implemented at 24 CFR Part 75 requires that, to the greatest extent feasible, a subrecipient must:

• Ensure that opportunities for training and employment arising in connection with a housing rehabilitation (including reduction and abatement of lead-based paint hazards), housing construction, or other public construction project are given to low- and very low-income persons residing within the metropolitan area in which the CDBG-funded project is located; where feasible, priority should be given to low- and very low-income residents within the service area of the project or the neighborhood in which the project is located, and to low- and very low-income participants in other HUD programs.
• Award contracts for work undertaken in connection with a housing rehabilitation (including reduction and abatement of lead-based paint hazards), housing construction, or other public construction project are given to business concerns that provide economic opportunities for low- and very low-income persons residing within the metropolitan area in which the CDBG-funded project is located; where feasible, priority should be given to business concerns which provide economic opportunities to low- and very low-income residents within the service area or the neighborhood in which the project is located and to low- and very low-income participants in other HUD programs.

Section 504 of the Rehabilitation Act of 1973, as amended: This section specifies that no otherwise qualified individual shall solely by reason of his or her handicap be excluded from participation (including employment), denied program benefits, or subjected to discrimination under any program or activity receiving Federal assistance. Part 8 requires that recipients ensure that their programs are accessible to and usable by persons with disabilities. Part 8 also prohibits recipients from employment discrimination based upon disability.

The Americans with Disabilities Act (ADA) of 1990: This law prohibits discrimination on the basis of disability in employment by state and local governments and in places of public accommodation and commercial facilities. The ADA also requires that facilities that are newly constructed or altered, by, on behalf of, or for use of a public entity, be designed and constructed in a manner that makes the facility readily accessible to and usable by persons with disabilities. The Act defines the range of conditions that qualify as disabilities and the reasonable accommodations that must be made to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for persons with disabilities.

The Age Discrimination Act of 1975, as amended: This law provides that no person shall be excluded from participation, denied program benefits, or subjected to discrimination on the basis of age under any program or activity receiving Federal assistance.

Executive Order 11246 (as amended by Executive Orders 11375 and 12086) — Equal Opportunity Under HUD Contracts and HUD-assisted Construction Contracts: This order requires that grantees and subrecipients and their contractors and subcontractors agree not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin.

The Architectural Barriers Act of 1968: The Architectural Barriers Act (ABA) of 1968 (ABA) (42 U.S.C. 4151-4157) requires that certain buildings financed with Federal funds must be designed, constructed, or altered in accordance with standards that ensure accessibility for persons with physical disabilities. The ABA covers any building or facility financed in whole or in part with Federal funds, except privately owned residential structures. Covered buildings and facilities designed, constructed, or altered with CDBG funds are subject to the ABA and must comply with the Uniform Federal Accessibility Standards.

Build America, Buy America Act: Enacted under Division G, Title IX of the Infrastructure Investment and Jobs Act (IIJA, Pub. L. No. 117-58) signed into law on November 15, 2021. It describes how grantees can use covered CPD program funds for public infrastructure projects to bolster America’s industrial base, protect national security, and support high-paying jobs.

Violence Against Women Act: The Recipient will comply with the right to report crime and emergencies protections at 34 U.S.C. § 12495 of the Violence Against Women Act.

All laborers and mechanics employed by contractors or subcontractors on construction work in excess of $2,000 and financed in whole or in part with CDBG funds must be paid “prevailing wages” that have been determined in accordance with the Davis-Bacon Act as amended (40 U.S.C. 3141-3144 and 3146-3148).  The Contract Work Hours and Safety Standards Act (40 U.S.C. 327–333) also applies to such activities. 

These labor standards shall apply only to the rehabilitation of residential property if the property contains not less than eight (8) units.

Subrecipients are strongly encouraged to consult closely with their grantee during the planning of any construction or rehabilitation projects to assure that all the requisite labor standards will be properly observed. Grantees and subrecipients should pay particular attention to the technical complexities entailed in:

• Determining whether a project might be subject to Davis-Bacon requirements.
• Obtaining the appropriate prevailing wage rates and inserting the wage determination and the appropriate labor standards provisions in the contract.
• Requesting additional wage rate classifications that may not appear on a wage decision.
• Conducting an adequate pre-construction conference.
• Monitoring the worksite and contractor/subcontractor payrolls to document compliance 

Subrecipients must be careful not to violate provisions of the Historic Preservation Act and related laws and Executive Orders. Before commitments are made to make any physical improvements or alterations or to demolish any building, a subrecipient should receive assurances from the grantee that the grantee is in compliance with the Act. Part of the grantee responsibility requires it to consult with the State Historic Preservation Officer as to whether the property: (1) is or could be declared a historic property; (2) is located in a historic district or an area which could be declared a historic district; and (3) involves proposed changes that could adversely affect historic properties or neighborhoods or properties or neighborhoods which could be declared historic. If historic properties could be adversely affected, an agreement must be reached on appropriate mitigating measures with all parties identified in 36 CFR Part 800.

National Flood Insurance Program (24 CFR 570.605)

If a community has had notice for more than a year that an area has been identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, CDBG funds cannot be spent for acquisition or construction purposes in the area unless the community is participating in the National Flood Insurance Program and such insurance has been purchased for the properties in question. Note that there is a statutory prohibition against providing Federal assistance to a person who had previously received Federal flood disaster assistance conditioned on obtaining and maintaining flood insurance and the person failed to obtain and maintain such insurance. (24 CFR 58.6(b)).

Floodplain Management

Subrecipients should select sites that are located outside of special flood hazard areas for projects proposing new construction or substantial improvement of existing buildings. Executive Order 11988, Floodplain Management, directs agencies “to avoid direct or indirect support of floodplain development wherever there is a practicable alternative” (24 CFR Part 55). Note that the guidance relating to environmental requirements is available on the HUD Web site at: https://www.ecfr.gov/current/title-24/subtitle-A/part-55.

A subrecipient must comply with (1) the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA), 24 CFR 570.606(b), and 49 CFR Part 24; and (2) the requirements of 24 CFR 570.606(c) and 24 CFR Part 42 governing the Residential Anti-displacement and Relocation Assistance Plan (Plan) under Section 104(d) of the HCD Act.

Under the URA and the Plan, the subrecipient must provide relocation assistance to persons (families, individuals, businesses, non-profit organizations, and farms) that are displaced as a direct result of acquisition, rehabilitation, demolition, or conversion for a CDBG-assisted project. All property occupants must be issued certain notices on a timely basis. (Failure to issue timely notices may result in unnecessary expenses.)

The Plan also requires the one-for-one replacement of any occupied or vacant occupiable low/moderate-income housing that is demolished or converted to another use in connection with a CDBG-assisted project. Finally, the Plan requires the identification of the steps that will be taken to minimize displacement.

Real property acquisition requirements are described in 49 CFR 24 Subpart B.

CDBG-funded activities, such as the acquisition, construction, or rehabilitation of residential structures, may not use lead-based paint.

Certain requirements apply to the use of CDBG funds for the rehabilitation of a residential property that was constructed before 1978. At a minimum, grantees are required to: (a) notify a purchaser or lessee of the presence of any known lead-based paint and/or lead-based paint hazards; (b) paint test surfaces to be disturbed or removed during rehabilitation for the presence of lead-based paint, or presume lead-based paint and notify the occupants of the results within 15 days of when the evaluation report is received or the presumption is made; (c) provide each occupied dwelling unit discussed in (a) and (b) in the preceding section with the EPA-approved lead hazard information pamphlet Protect Your Family From Lead in Your

Home or EPA-approved equivalent; (d) reduce lead hazards as required by the applicable subparts of 24 CFR Part 35; and (e) perform clearance testing, including dust testing, before re-occupancy after all but minimal (“de minimis”) amounts of paint disturbances. (See the following section for details.)

The CDBG regulation at 24 CFR 570.608 states that the following subparts of 24 CFR Part 35 apply to   the use of CDBG funds in pre-1978 housing:

• A - Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property;  
• B - General Lead-Based Paint Requirements and Definitions for All Programs;  
• J – Rehabilitation;       
• K - Acquisition, Leasing, Support Services, or Operation; and
• R - Methods and Standards for Lead-Based Paint Hazard Evaluation and Hazard Reduction Activities.

24 CFR Part 35, Subpart A, is called the Lead Disclosure Rule; and 24 CFR Part 35, Subparts B and R, are called the Lead Safe Housing Rule.

Certain properties are exempt from the requirements of the Lead Safe Housing Rule.

They include:

• Housing built on or after January 1, 1978;
• Zero-bedroom dwellings, including efficiency apartments, single-room occupancy housing, dormitories, or military barracks;  
• Housing exclusively for the elderly or people with disabilities, unless a child under age 6 resides or is expected to reside there; 
• Units that have been found to be free of lead-based paint by a certified lead-based paint inspector; 
• Units where all lead-based paint has been removed; 
• Unoccupied housing that will remain vacant until it is demolished;
• Non-residential portions of mixed-use buildings, except that spaces serving both residential and non-residential uses are covered by the rule;  
• Units that are to be rehabilitated without disturbing a painted surface; and                                                    
• Units that are subject to emergency repair action needed to safeguard against imminent danger to human life, health or safety, or to protect the property from further structural damage.                                                                                                                                                                       

For properties that are covered by the Lead Safe Housing Rule, the lead-based paint requirements for rehabilitation depend on the amount of Federal rehabilitation assistance provided. The amount of Federal rehabilitation assistance is the average per unit amount of Federal funds for the hard costs of rehabilitation, excluding lead-based paint hazard evaluation and hazard reduction activities. In calculating this assistance amount, you must consider both the total amount of Federal assistance to be used (including CDBG and other funds) and the hard costs of rehabilitation (including Federal and non-Federal funds). Whenever these two amounts are not the same, the smaller of the two determines the type and level of lead-based paint requirement. For a structure with more than one dwelling unit, the thresholds are applied against the average amount of Federal assistance per unit or the average hard cost of rehabilitation per unit, whichever is lower.

The following is a general overview of the requirements based on dollar thresholds per year per assisted housing unit:

• Up to and including $5,000 — notice, provision of pamphlet, paint testing of surfaces to be disturbed or presumption of lead-based paint, safe work practices as part of rehabilitation (except for minimal amounts of paint disturbances), repair any paint that is disturbed, and clearance after the work and before re-occupancy.
• $5,001–$25,000— notice, provision of pamphlet, paint testing or presumption, risk assessment to identify lead-based paint hazards, interim control or standard treatment of lead-based paint hazards, and clearance.
• Over $25,000— notice, provision of pamphlet, paint testing or presumption, risk assessment, abatement of lead-based paint hazards, ongoing lead-based paint maintenance, and clearance.
• Minimal (“de minimis”) amounts— Safe work practices and clearance are not required when maintenance or hazard reduction activities do not disturb painted surfaces that total more than: 20 square feet on exterior surfaces; 2 square feet in any one interior room or space, or 10 percent of the total surface area on an interior or exterior type of component type with a small surface area (e.g., window sills, baseboards, and trim).
• Pamphlet — The Protect Your Family From Lead in Your Home pamphlet can be downloaded in English and Spanish from www.hud.gov/offices/lead or www.epa.gov/lead, and single paper copies can be obtained from the National Lead Information Clearinghouse at 1-800-424-LEAD. Persons with hearing or speech impediments may access this telephone number via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

The preceding section description is intended to provide basic information on lead-based paint requirements. Consult the applicable portions of 24 CFR Part 35 (see www.hud.gov/offices/lead) and/or contact the HUD field office for greater detail if you are completing an activity subject to these requirements.

It is HUD’s policy that all properties that are being proposed for use in HUD programs be free of hazardous materials, contamination, toxic chemicals and gases, and radioactive substances, where a hazard could affect the health and safety of occupants or conflict with the intended utilization of the property.

A subrecipient is prohibited from using CDBG funds to finance the use of facilities or equipment for political purposes or to engage in other partisan political activities, such as sponsoring candidate forums, distributing brochures, voter transportation, or voter registration. However, a facility originally assisted with CDBG funds may be used on an incidental basis to hold meetings, candidate forums, or voter registration, provided that all parties and organizations have access to the facility on an equal basis and are assessed equal rent or use charges, if any.

There are two sets of conflict-of-interest provisions applicable to activities carried out with CDBG funding. The first set, applicable to the procurement of goods and services by subrecipients, is the procurement regulations located at 24 CFR 84.42 and 85.36. (See 24 CFR 570.611(a)(1).) The second set of provisions is located at 24 CFR 570.611(a)(2). These provisions cover situations not covered by parts 84 and 85.

With respect to procurement activities, the subrecipient must maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. At a minimum, these standards must:

• Require that no employee, officer, or agent may participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict would be involved. Such a conflict would arise when any of the following parties has a financial or other interest in the firm selected for an award:
  • an employee, officer, or agent of the subrecipient;
  •  any member of an employee's, officer's, or agent's immediate family;
  • an employee's, agent's, or officer's partner; or• an organization which employs or is about to employ any of the in the preceding section.

• Require that employees, agents, and officers of the subrecipient neither solicit nor accept gratuities, favors, or anything of value from contractors, or parties to sub-agreements. However, subrecipients may set standards for situations in which the financial interest is not substantial, or the gift is an unsolicited item of nominal value.

• Provide for disciplinary actions to be applied for any violations of such standards by employees, agents, or officers of the subrecipient.

With respect to all other CDBG-assisted activities, the general standard is that no employee, agent, or officer of the subrecipient, who exercises decision-making responsibility with respect to CDBG funds and activities, is allowed to obtain a financial interest in or benefit from CDBG activities, or have a financial interest in any contract, subcontract, or agreement regarding those activities or in the proceeds of the activities. Specific provisions include that:

• This requirement applies to any person who is an employee, agent, consultant, officer, or elected or appointed official of the grantee, a designated public agency, or a subrecipient, and to their immediate family members, and business partner(s).
• The requirement applies for such persons during their tenure and for a period of 1 year after leaving the grantee or subrecipient organization.
• Upon written request, exceptions may be granted by HUD on a case-by-case basis, after consideration of the cumulative effect of various factors listed at 24 CFR 570.611(d), and only with: (a) full disclosure of the potential conflict, and (b) a legal opinion of the grantee’s attorney that there would be no violation of state or local laws in granting the exception.

A grantee is responsible for ensuring that all CDBG funds under its oversight are used in accordance with all program requirements, and for determining the adequacy of its subrecipients’ performance. Accordingly, the grantee is empowered to make site visits and review program files as necessary to fulfill these responsibilities.

When problems arise in the performance of a subrecipient, the grantee is responsible for taking appropriate actions for correcting these deficiencies, including suspending or terminating the CDBG activities being carried out by the subrecipient (24 CFR 570.501(b)). Consistent with 24 CFR 570.503(b)(6), the written agreement between the grantee and the subrecipient must specify that suspension or termination may occur if the subrecipient materially fails to comply with any term of the CDBG award, and that the agreement may also be terminated for convenience.

The U.S. Government Accountability Office (GAO) has stated that, as a subrecipient of the CDBG Entitlement program, you share a joint responsibility with your grantee to ensure that Federal program resources are applied “efficiently, economically and effectively to achieve the purposes for which the resources were furnished.”  The financial and performance audits discussed in this chapter are designed to assure that grantees and subrecipient agencies meet this mutual responsibility and are accountable to the public. In particular:

1. Financial audits are designed to provide an independent opinion on whether your agency’s financial statements present in a fair manner actual operating results in accordance with accepted standards, and whether your agency has complied with specific financial requirements in terms of systems and procedures.
2. Performance audits provide an independent point of view on the extent to which your agency has faithfully, efficiently and effectively carried out its operations, and achieved the intended results or benefits of its programs.