[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR1003.508]

[Page 776-778]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND ALASKA NATIVE VILLAGES--Table of Contents
 
                     Subpart F--Grant Administration
 
Sec. 1003.508  Grant closeout procedures.

    (a) Criteria for closeout. A grant will be closed out when the Area 
ONAP determines, in consultation with the grantee, that the following 
criteria have been met:
    (1) All costs to be paid with ICDBG funds have been incurred, with 
the exception of closeout costs (e.g., audit costs) and costs resulting 
from contingent liabilities described in the closeout agreement pursuant 
to paragraph (c) of this section. Contingent liabilities include, but 
are not limited to, third-party claims against the grantee, as well as 
related administrative costs.
    (2) With respect to activities which are financed by means of escrow 
accounts, loan guarantees, or similar mechanisms, the work to be 
assisted with ICDBG funds has actually been completed.
    (3) Other responsibilities of the grantee under the grant agreement 
and applicable laws and regulations appear to have been carried out 
satisfactorily

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or there is no further Federal interest in keeping the grant agreement 
open for the purpose of securing performance.
    (b) Closeout actions. (1) Within 90 days of the date it is 
determined that the criteria for closeout have been met, the grantee 
shall submit to the Area ONAP a copy of the final status and evaluation 
report described in Sec. 1003.506(a) and a completed Financial Status 
Report (SF-269). If acceptable reports are not submitted, an audit of 
the grantee's program activities may be conducted by HUD.
    (2) Based on the information provided in the status report and other 
relevant information, the grantee, in consultation with the Area ONAP, 
will prepare a closeout agreement in accordance with paragraph (c) of 
this section.
    (3) The Area ONAP will cancel any unused portion of the awarded 
grant, as shown in the signed grant closeout agreement. Any unused grant 
funds disbursed from the U.S. Treasury which are in the possession of 
the grantee shall be refunded to HUD.
    (4) Any costs paid with ICDBG funds which were not audited 
previously shall be subject to coverage in the grantee's next single 
audit performed in accordance with 24 CFR part 44. The grantee may be 
required to repay HUD any disallowed costs based on the results of the 
audit, or on additional HUD reviews provided for in the closeout 
agreement.
    (c) Closeout agreement. Any obligations remaining as of the date of 
the closeout shall be covered by the terms of a closeout agreement. The 
agreement shall be prepared by the grantee in consultation with the Area 
ONAP. The agreement shall identify the grant being closed out, and 
include provisions with respect to the following:
    (1) Identification of any closeout costs or contingent liabilities 
subject to payment with ICDBG funds after the closeout agreement is 
signed;
    (2) Identification of any unused grant funds to be canceled by HUD;
    (3) Identification of any program income on deposit in financial 
institutions at the time the closeout agreement is signed;
    (4) Description of the grantee's responsibility after closeout for:
    (i) Compliance with all program requirements, certifications and 
assurances in using program income on deposit at the time the closeout 
agreement is signed and in using any other remaining ICDBG funds 
available for closeout costs and contingent liabilities;
    (ii) Use of real property assisted with ICDBG funds in accordance 
with the principles described in Sec. 1003.504; and
    (iii) Ensuring that flood insurance coverage for affected property 
owners is maintained for the mandatory period;
    (5) Other provisions appropriate to any special circumstances of the 
grant closeout, in modification of or in addition to the obligations in 
paragraphs (c) (1) through (4) of this section. The agreement shall 
authorize monitoring by HUD, and shall provide that findings of 
noncompliance may be taken into account by HUD as unsatisfactory 
performance of the grantee in the consideration of any future grant 
award under this part.
    (d) Termination of grant for convenience. Grant assistance provided 
under this part may be terminated for convenience in whole or in part 
before the completion of the assisted activities, in accordance with the 
provisions of 24 CFR 85.44. The grantee shall not incur new obligations 
for the terminated portions after the effective date, and shall cancel 
as many outstanding obligations as possible. HUD shall allow full credit 
to the grantee for those portions of obligations which could not be 
canceled and which had been properly incurred by the grantee in carrying 
out the activities before the termination. The closeout policies 
contained in this section shall apply in such cases, except where the 
approved grant is terminated in its entirety. Responsibility for the 
environmental review to be performed under 24 CFR part 50 or 24 CFR part 
58, as applicable, shall be determined as part of the closeout process.
    (e) Termination for cause. In cases in which HUD terminates the 
grantee's grant under the authority of subpart H of this part, or under 
the terms of the grant agreement, the closeout policies contained in 
this section shall apply, except where the approved grant is canceled in 
its entirety. The provisions

[[Page 778]]

in 24 CFR 85.43(c) on the effects of termination shall also apply. HUD 
shall determine whether an environmental review is required, and if so, 
HUD shall perform it in accordance with 24 CFR part 50.