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It has come to HUD's attention that a TCAP grantee requested that its HUD Field Office waive Section IV, Paragraph D of CPD Notice 09-03 to eliminate the requirement that TCAP funds be expended for an eligible TCAP cost within three days of being drawn down from the grantee's TCAP U.S. Treasury account and establish an alternate requirement that funds be expended "within a reasonable time from drawdown."
HUD has not delegated responsibility for TCAP to its Field Offices. All program operations, with the exception of approval of Requests for Release of Funds under the National Environmental Protection Act (NEPA), are vested in the Office of Affordable Housing Programs within HUD's Office of Community Planning and Development. Only the Secretary of HUD and the Assistant Secretary for Community Planning and Development have authority to waive any provision of CPD Notice 09-03.
State grantees are required by HUD and Treasury regulations to minimize the time elapsing between the transfer of funds and disbursement for program purposes. (24 CFR 85.21; 31 CFR 205.11 & 205.33). If a state's Treasury-State agreement for payment is amended to include the TCAP program, draw down of TCAP grant funds is subject to the specific payment requirements of 31 CFR part 205, subpart A. Whether or not the State's TCAP program is subject to its Treasury-State agreement, it is required to minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes. (31 CFR 205.11 & 205.33). Fund transfers to a State are limited to the minimum amounts needed by the State to meet the actual, immediate cash requirements of the State in carrying out the Federal assistance program or project. The timing and amount of funds transfers must be as close as is administratively feasible to a State's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. (31 CFR 205.33). This timing should not exceed three days, which is reflected in the TCAP Notice.
All TCAP grantees are responsible for ensuring that no more than 3 business days elapse from the time that it draws TCAP funds from its U.S. Treasury account until the expenditure of funds for an eligible TCAP costs. TCAP funds may not be placed in escrow. HUD recommends that grantees adopt a reimbursement method of payment for its TCAP recipients to ensure that it complies with this requirement. The TCAP written agreements must reflect the 3-day requirement. For more information about written agreement requirements, please see the Q&A on HUD's TCAP webpage:
http://portal.hud.gov/portal/page/portal/RECOVERY/programs/TCAP_RESOURCES/TCAP-Written%20Agr%20Rqmts-Admin.pdf
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