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Federal Register / Vol. 88, No. 96 / Thursday, May 18, 2023 / Notices
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V.B. Review of Continuing Capacity Upon a determination by HUD that the grantee has not carried out its CDBGDR
activities and certifications in accordance with the requirements in the Consolidated Notice, HUD will undertake a further review to determine if the grantee has the continuing capacity to carry out its activities in a timely manner. In making this determination, HUD
will consider the nature and extent of the recipients performance deficiencies, the actions taken by the recipient to address the deficiencies, and the success or likely success of such actions. HUD may then apply the following corrective and remedial actions as appropriate:
V.B.1. Corrective and remedial actions. To effectively administer the CDBGDR program in a manner that facilitates recovery, particularly the alternative requirements permitting states to act directly to carry out eligible activities, HUD is waiving 42 U.S.C.
5304e to the extent necessary to establish the following alternative requirement: HUD
may undertake corrective and remedial actions for states in accordance with the authorities for CDBG Entitlement grantees in subpart O including corrective and remedial actions in 24 CFR 570.910, 570.911, and 570.913 or under subpart I of the CDBG
regulations at 24 CFR part 570. In response to a deficiency, HUD may issue a warning letter followed by a corrective action plan that may include a management plan which assigns responsibility for further administration of the grant to specific entities or persons. Failure to comply with a corrective action may result in the termination, reduction, or limitation of payments to grantees receiving CDBGDR
funds.
V.B.2. Reduction, withdrawal, or adjustment of a grant, or other appropriate action. Before a reduction, withdrawal, or adjustment of a CDBGDR grant, or other actions taken pursuant to this section, the recipient shall be notified of the proposed action and be given an opportunity for an informal consultation. Consistent with the procedures described in the Consolidated Notice, HUD may adjust, reduce, or withdraw the CDBGDR grant except funds that have been expended for eligible, approved
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activities or take other actions as appropriate.
V.B.3. Additional criteria and specific conditions to mitigate risk. To ensure effective grantee implementation of the financial controls, procurement processes, and other procedures that are the subject of the certification by the Secretary, HUD has and may continue to establish specific criteria and conditions for each grant award as provided for at 2 CFR 200.206 and 200.208, respectively, to mitigate the risk of the grant. The Secretary shall specify any such criteria and the resulting conditions in the grant conditions governing the award.
These criteria may include, but need not be limited to, a consideration of the internal control framework established by the grantee to ensure compliant implementation of its financial controls, procurement processes and payment of funds to eligible entities, as well as the grantees risk management strategy for information technology systems established to implement CDBGDR funded programs. Additionally, the Secretary may amend the grant conditions to mitigate risk of a grant award at any point at which the Secretary determines a condition to be required to protect the Federal financial interest or to advance recovery.
V.C. Grantee Reporting Requirements in the DRGR System V.C.1. DRGR-related waivers and alternative requirements. The Consolidated Notice waives the requirements for submission of a performance report pursuant to 42 U.S.C. 12708a, 24 CFR 91.520, and annual status and evaluation reports that are due each fiscal year under 24 CFR
1003.506a. Alternatively, HUD is requiring that grantees enter information in the DRGR
system on a quarterly basis through the performance reports. The information in DRGR and the performance reports must contain sufficient detail to permit HUDs review of grantee performance and to enable remote review of grantee data to allow HUD
to assess compliance and risk.
At a minimum, each grantee must:
a. Enter its action plan and amendments as described in III.C.1, including performance
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measures, into the Public Action Plan in DRGR;
b. Enter activities into the DRGR Action Plan at a level of detail sufficient to allow HUD to determine grantee compliance when the activity type, national objective, and the organization that will be responsible for the activity is known;
c. Categorize activities in DRGR under a project;
d. Enter into the DRGR system summary information on grantees monitoring visits and reports, audits, and technical assistance it conducts as part of its oversight of its disaster recovery programs;
e. Use the DRGR system to draw grant funds for each activity;
f. Use the DRGR system to track program income receipts, disbursements, revolving loan funds, and leveraged funds if applicable;
g. Submit a performance report through the DRGR system no later than 30 days following the end of each calendar quarter. For all activities, the address of each CDBGDR
assisted property must be recorded in the performance report; and h. Publish a version of the performance report that omits personally identifiable information reported in the performance reports submitted to HUD on the grantees official website within three days of submission to HUD, or in the event a performance report is rejected by HUD, publish the revised version, as approved by HUD, within three days of HUD approval.
The grantees first performance report is due after the first full quarter after HUD signs the grant agreement. Performance reports must be submitted on a quarterly basis until all funds have been expended and all expenditures and accomplishments have been reported. If a satisfactory report is not submitted in a timely manner, HUD may suspend access to CDBGDR funds until a satisfactory report is submitted, or may withdraw and reallocate funding if HUD
determines, after notice and opportunity for a hearing, that the jurisdiction did not submit a satisfactory report.
FR Doc. 202310598 Filed 51723; 8:45 am BILLING CODE 421067P

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