[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: 24CFR968.325]

[Page 523-525]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 968--PUBLIC HOUSING MODERNIZATION--Table of Contents
 
Subpart C--Comprehensive Grant Program (for PHAs That Own or Operate 250 
                      or More Public Housing Units)
 
Sec. 968.325  Annual submission of activities and expenditures.

    (a) General. The Annual Submission is a collective term for all 
documents which the PHA must submit to HUD for review and approval 
before accessing the current FFY grant funds. Such documents include the 
Annual Statement, Work Statements for years two through five of the 
Five-Year Action Plan, local government statement, PHA Board Resolution, 
materials demonstrating the partnership process and any other documents 
as prescribed by HUD. For planning purposes, a PHA may use either the 
amount of funding received in the current year or the actual formula 
amount provided in HUD's notification under Sec. 968.310(b)(1) in 
developing the Five-Year Action Plan for presentation at the resident 
meetings and public hearing. Work Statements cover the second through 
the fifth years of the Five-Year Action Plan and set forth the major 
work categories and costs by development or PHA-wide which the PHA 
intends to undertake in each year of years two through five. In 
preparing these Work Statements, the PHA shall assume that the current 
FFY formula amount will be available in each year of years two through 
five, as discussed in Sec. 968.315(d)(5)(i). The Work Statements for all 
five years will be at the same level of detail so that the PHA may 
interchange work items. A PHA may budget up to 8% of its annual grant in 
a contingency account for cost overruns.
    (b) Submission. After receiving HUD notification of the formula 
amount and estimating how much funding will be available from other 
sources, such as State and local governments, and determining its 
activities and costs based on the current FFY formula amount, the PHA 
shall submit its Annual Submission.
    (c) Acceptance for review. (1) Upon receipt of an Annual Submission 
from a PHA, HUD shall determine whether:
    (i) The Annual Submission contains each of the required components; 
and
    (ii) The PHA has submitted any additional information or assurances 
required as a result of HUD monitoring, findings of inadequate PHA 
performance, audit findings, and civil rights compliance findings.
    (2) If the PHA has submitted a complete Annual Submission and all 
required information and assurances, HUD will accept the submission for 
review, as of the date of receipt. If the PHA has not submitted all 
required material, HUD will promptly notify the PHA that it has 
disapproved the submission, indicating the reasons for disapproval, the 
modifications required to qualify the Annual Submission for HUD review, 
and the date by which such modifications must be received by HUD.
    (d) Resident and local government participation. A PHA is required 
to develop its Annual Submission, including any proposed amendments to 
its Comprehensive Plan as provided in Sec. 968.315 (b) and (c), in 
consultation with officials of the appropriate governing body (or, in 
the case of a PHA with developments in multiple jurisdictions, in 
consultation with the CEO of each such jurisdiction or with an advisory 
group representative of all jurisdictions) and with residents and duly 
elected resident councils of the developments covered by the 
Comprehensive Plan, as follows:
    (1) Public notice. Within a reasonable amount of time before the 
advance meeting for residents under paragraph (d)(2) of this section, 
and the public hearing under paragraph (d)(3) of this section, the PHA 
shall annually provide public notice of the advance meeting and the 
public hearing in a manner determined by the PHA and which ensures 
notice to all duly elected resident councils;
    (2) Advance Meeting with residents. The PHA shall at least annually 
hold a meeting open to all residents and duly elected resident councils. 
The advance meeting shall be held within a reasonable amount of time 
before the public hearing under paragraph (d)(3) of this

[[Page 524]]

section. The PHA will provide residents with information concerning the 
contents of the PHA's Five-Year Action Plan (and any proposed amendments 
to the PHA's Comprehensive Plan to be submitted with the Annual 
Submission) so that residents can comment adequately at the public 
hearing on the contents of the Five-Year Action Plan and any proposed 
amendments to the Comprehensive Plan.
    (3) Public hearing. The PHA shall annually hold at least one public 
hearing, and any appropriate number of additional hearings, to present 
information on the Annual Submission and the status of prior approved 
programs. The public hearing shall provide ample opportunity for 
residents of the developments covered by the Comprehensive Plan, 
officials of the appropriate governing body, and other interested 
parties, to express their priorities and concerns. The PHA shall give 
full consideration to the comments and concerns of residents, local 
government officials, and other interested parties in developing its 
Five-Year Action Plan, or any amendments to its Comprehensive Plan.
    (4) Expedited scheduling. PHAs are encouraged to hold the meeting 
with residents and duly elected resident councils under paragraph (d)(2) 
of this section, and the public hearing under paragraph (d)(3) of this 
section between July 1 (i.e., after the end of the program year--June 
30) and September 30, using the formula amount for the current FFY. If a 
PHA elects to use such expedited scheduling, it must explain at the 
meeting with residents and duly elected resident councils and at the 
public hearing that the current FFY amount is not the actual grant 
amount for the subsequent year, but is rather the amount used for 
planning purposes. It must also explain that the Five-Year Action Plan 
will be adjusted when HUD provides notification of the actual formula 
amount, and explain which major work categories at which developments 
may be added or deleted to adjust for the actual formula amount and that 
any added work categories/developments will come from the Comprehensive 
Plan.
    (e) Contents of Annual Submission. The Annual Statement for each 
year must include, for each development or on a PHA-wide basis for 
management improvements or certain physical improvements for which work 
is to be funded out of that year's grant:
    (1) A list of development accounts with an identification of major 
work categories;
    (2) The cost for each major work category, as well as a summary of 
cost by development account;
    (3) The PHA-wide or development-specific management improvements to 
be undertaken during the year;
    (4) For each development and for any management improvements not 
covered by a HUD-approved memorandum of agreement or management 
improvement plan, a schedule for the use of current year funds, 
including target dates for the obligation and expenditure of the funds 
(see Sec. 968.125);
    (5) A summary description of the actions to be taken with non-CGP 
funds to meet physical and management improvement needs which have been 
identified by a PHA in its needs assessments;
    (6) Any documentation that HUD needs to assist it in carrying out 
its responsibilities under the National Environmental Policy Act and 
other related authorities in accordance with Sec. 968.110(c) and (d);
    (7) Other information, as specified by HUD and as approved by OMB 
under the Paperwork Reduction Act; and
    (8) A PHA resolution approving the Annual Submission or any 
amendments thereto, as set forth in Sec. 968.315(e)(7).
    (f) Additional submissions with Annual Submission. A PHA shall 
submit with the Annual Submission any amendments to the Comprehensive 
Plan, as set forth in Sec. 968.315(f), and such additional information 
as may be prescribed by HUD. HUD shall review any proposed amendments to 
the Comprehensive Plan in accordance with review standards under 
Sec. 968.320(b).
    (g) HUD review and approval of Annual Submission--(1) General. An 
Annual Submission accepted in accordance with paragraph (a) of this 
section shall be considered to be approved, unless HUD notifies the PHA 
in writing, postmarked within 75 calendar days of the date that HUD 
receives the Annual

[[Page 525]]

Submission for review under paragraph (c) of this section, that HUD has 
disapproved the Annual Submission, indicating the reasons for 
disapproval, the modifications required to make the Annual Submission 
approvable, and the date by which such modifications must be received by 
HUD. HUD may request additional information (e.g., for eligibility 
determinations) to facilitate review and approval of the Annual 
Submission during the 75-day review period. HUD shall not disapprove an 
Annual Submission on the basis that the Department cannot complete its 
review under this section within the 75-day deadline;
    (2) Bases for disapproval for Annual Submission. HUD shall approve 
the Annual Submission, except where:
    (i) Plainly inconsistent with Comprehensive Plan. HUD determines 
that the activities and expenditures proposed in the Annual Submission 
are plainly inconsistent with the PHA's approved Comprehensive Plan;
    (ii) Contradiction of PHA resolution. HUD has evidence which tends 
to challenge, in a substantial manner, the certifications contained in 
the board resolution, as required by Sec. 968.315(e)(7).
    (h) Amendments to Annual Statement. The PHA shall advise HUD of all 
changes to the PHA's approved Annual Statement in its Performance and 
Evaluation Report submitted under Sec. 968.330. The PHA shall submit to 
HUD for prior approval any additional work categories (except for 
emergency work) which are not within the PHA's approved Five-Year Action 
Plan.
    (i) Failure to obligate formula funds and extension of time for 
performance--(1) Failure to obligate formula funds. If the PHA fails to 
obligate formula funds within the approved or extended time period, the 
PHA may be subject to an alternative management strategy which may 
involve third-party oversight or administration of the modernization 
function. HUD would only require such action after a corrective action 
order had been issued under Sec. 968.335 and the PHA failed to comply 
with the order. HUD could then require an alternative management 
strategy in a corrective action order. A PHA may appeal in writing the 
corrective action order requiring an alternative management strategy 
within 30 calendar days of that order. HUD Headquarters shall render a 
written decision on a PHA's appeal within 30 calendar days of the date 
of its receipt of the PHA's appeal.
    (2) Extension of time for performance. A PHA may extend the target 
dates for fund obligation and expenditure in the approved Annual 
Statement whenever any delay outside the PHA's control occurs, as 
specified by HUD, and the extension is made in a timely manner. Such 
revision is subject to HUD review under Sec. 968.345(a)(2) as to the 
PHA's continuing capacity. HUD shall not review as to a PHA's continuing 
capacity any revisions to a PHA's Comprehensive Plan and related 
statements where the basis for the revision is that HUD has not provided 
the amount of assistance set forth in the Annual Submission, or has not 
provided such assistance in a timely manner.
    (j) ACC Amendment. After HUD approval of each year's Annual 
Submission, HUD and the PHA shall enter into an ACC amendment in order 
for the PHA to draw down modernization funds. The ACC amendment shall 
require low-income use of housing for not less than 20 years from the 
date of the ACC amendment (subject to sale of homeownership units in 
accordance with the terms of the ACC).
    (k) Declaration of trust. As HUD may require, the PHA shall execute 
and file for record a Declaration of Trust as provided under the ACC to 
protect the rights and interests of HUD throughout the 20-year period 
during which the PHA is obligated to operate its developments in 
accordance with the ACC, the Act, and HUD regulations and requirements.

(Approved by the Office of Management and Budget under control number 
2577-0157)

[57 FR 5575, Feb. 14, 1992, as amended at 59 FR 44841, Aug. 30, 1994. 
Redesignated and amended at 61 FR 8748, Mar. 5, 1996]