[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR511.77]

[Page 27-28]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 511_RENTAL REHABILITATON GRANT PROGRAM--Table of Contents
 
                     Subpart H_Grant Administration
 
Sec. 511.77  Grant closeout.

    (a) Each individual fiscal year rental rehabilitation grant will be 
closed out when all grant amounts for the grant to be closed out have 
been drawn down and expended for completed projects and/or 
administrative costs, or grant amounts not drawn down and expended have 
been deobligated by HUD.
    (b) Project Completion Reports for all projects utilizing grant 
amounts from the fiscal year grant(s) to be closed out have been 
submitted and entered into the C/MI System.
    (c) The required reviews and audits to determine whether grantees 
have satisfied the terms of their grant agreement have been made. 
Closeout is contingent upon the receipt of the grantee's most recent 
audit report and audit reports of State recipients, where applicable. 
For closeout of the grant to proceed, the most recent audit report(s) 
must be free of any outstanding findings related to the RRP grant to be 
closed. The audit(s) of the grantee and State recipients, where 
applicable, should cover all grant amounts from all fiscal years which 
are to be closed out except as noted in paragraph (c)(2) of this 
section.
    (1) The Single Audit Act prohibits requiring a grantee or State 
recipient to obtain an audit at its expense covering

[[Page 28]]

only the Rental Rehabilitation Program. (HUD still has the authority to 
conduct an audit or to contract with an independent public accountant to 
conduct an audit of the grant. However, HUD must pay for the audit.)
    (2) When the previous audit(s) fail to cover all grant amounts under 
the Grant Agreement, the program may still be closed out, provided the 
grantee agrees in writing to remit to HUD any costs questioned by a 
subsequent audit that are disallowed by HUD. This procedure is expected 
to be used in those cases when both the grantee and HUD want to proceed 
with the closeout before the next periodic single audit is conducted 
covering the remaining grant amounts not already audited.
    (d) With respect to monitoring the grantee, either:
    (1) The HUD Field Office has conducted an on-site monitoring of the 
grantee and has determined that the grantee's performance, with respect 
to any grant to be closed out, is satisfactory and is in compliance with 
Rental Rehabilitation program statutory and regulatory requirements, 
including Sec. 511.10(a) and Sec. 511.10(b); or
    (2) A grant may be closed before on-site monitoring has been 
conducted, provided:
    (i) The Cash and Management Information reports indicate the 
grantee's performance is satisfactory and is in compliance with Rental 
Rehabilitation program statutory and regulatory requirements;
    (ii) There are no outstanding monitoring findings; and
    (iii) The grantee agrees in writing to pay back the amount of any 
costs that are later found by HUD to be ineligible based on a subsequent 
on-site monitoring review or audit.

(Approved by the Office of Management and Budget under control number 
2506-0080)

[55 FR 20050, May 14, 1990, as amended at 58 FR 52567, Oct. 8, 1993; 61 
FR 7062, Feb. 23, 1996]