1944-I Supporting Statement

SUPPORTING STATEMENT

7 CFR 1944-I – Self-Help Technical Assistance Grants

OMB No. 0575-0043

A. Justification

1. Explain the circumstances that make the collection of information necessary.

• Public Law 90-448, Section 523, “Housing Act of 1949”

The Rural Housing Service (RHS) is the credit Agency for rural housing and community development within the Rural Development mission area of the United States Department of Agriculture. RHS was formerly known as Rural Housing and Community Development Service (RHCDS), which was a successor Agency to the Farmers Home Administration.

This regulation prescribes the policies and responsibilities, including the collection and use of information, necessary to administer the Section 523 Mutual and Self-Help Housing (MSH) program. This program affords very low and low-income families the opportunity for home ownership by constructing their own homes. The MSH program provides funds to non-profit organizations to provide supervisory and technical assistance to the homebuilding families. Three types of funds are available under the MSH program:

• Technical assistance grants support programs of technical and supervisory assistance that allow grantees to identify, organize, and help families obtain financing and build their homes;

• Pre-development grants assist organizations that need financial and technical assistance to put together a technical assistance grant application package; and

• Site option loans allow technical assistance grantees to create a revolving loan fund to finance site options for land on which participating families can build their homes.

Both public and private non-profit organizations are eligible to administer these programs. RHS has the responsibility to assure that the non-profit organizations receiving MSH funding are effectively utilizing these funds to promote and carry out the program in their respective rural areas or small towns.

The information requested by RHS includes financial and organizational information about the non-profit organization. This information is vital for the Agency to determine if the organization will qualify for MSH assistance, and, if funding is awarded, to determine whether funds are administered in accordance with the program regulations.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the Agency has made of the information received from the current collection.

The Agency collects information from the non-profit organizations that want to develop a MSH program in their area to increase the availability of affordable housing. The information is collected at the local, area, and state levels and under the Freedom of Information Act, the general public can request a majority of the information requested of the applicant organization except information that is confidential and included under provisions of the Privacy Act. The information is needed by the Agency to determine if the organization is capable of successfully carrying out the requirements of the MSH program. The information is collected on an as requested or needed basis. RHS has reviewed the program’s need for the collection of information versus the burden placed on the public. It is the opinion of the Agency that the program’s needs are necessary and will be beneficial to all parties involved to provide MSH housing programs that will create affordable housing in rural areas.

The specific information to be cleared includes the following:

Reporting Requirements - Forms Approved Under Other OMB Numbers

• Form SF-424, “Application for Federal Assistance”

This is a multi-purpose form that is used as the application form for the pre-development grant program, the technical assistance grant program, and the site option loan program.

This form is used by other Federal Agencies including RHS to report to clearinghouses on actions taken on the applications in accordance with EO 12372 that eliminates the potential of duplication of effort.

• Form SF-424A, “Budget Information - Non-Construction Program”

Technical assistance applicants must complete this form or a reasonable substitute (e.g., an identically formatted spreadsheet). The budget is the financial blueprint of the self-help program. This form allows applicants to provide detailed information on the budgets for which they are requesting funding. It outlines the anticipated expenses of the program during the grant period. Expenditures in the budget include salaries, employee benefits, rent and utilities, equipment, and supplies as well as expected cost. The budget includes only authorized expenses.

• Form RD 400-1, “Equal Opportunity Agreement”

The grant recipient uses this form when construction work is conducted under the provisions of RD Instruction 1901-E.

• Form RD 400-4, “Assurance Agreement”

This form is used to confirm that applicants for loan and grant assistance have been reminded of their obligations to comply with all the provisions of the Civil Rights Act of 1964 and regulations of the Agency.

• Form SF-424B, Assurances-Non-Construction Programs”

Technical assistance grant applicants complete this form to certify their compliance with the applicable Federal requirements set forth in the form. These requirements include establishment of an accounting system in accordance with generally accepted accounting standards, agreements to comply with all Federal statutes relating to non-discrimination, safeguards to prohibit conflict of interest, and other similar requirements.

• Form SF-270, “Request for Advance or Reimbursement”

This form is used by the grant recipient to comply with guidelines established for payment requirements by the Office of Management and Budget (OMB) Circulars A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations” and A-102, “Grants and Cooperative Agreements with State and Local Governments.”

• Form SF-269A, “Financial Status Report”

At the time of grant closeout, technical assistance grantees must provide a financial status report using SF-269A that reflects all information–Federal and non-Federal–relating to obligations and expenditures of Agency grant funds. This is the final summary report of all previous financial activity that occurred during the grant period.

• Form HUD-935.2A, “Affirmative Fair Housing Marketing Plan”:

The affirmative fair housing Marketing Plan requires that each grant recipient carry out an affirmative program to attract prospective buyers of all minority and non-minority groups in the housing market area regardless of race, color, religion, sex, natural origin, disability, or familial status.

The grantee shall describe on this form the activities it proposes to carry out during advance marketing. The affirmative program also should ensure that any group(s) of persons normally not likely to apply for the housing without special outreach efforts know about the housing opportunity, feel welcome to apply and have the opportunity to buy.

REPORTING REQUIREMENTS - NO FORMS

• Evidence of Capacity to Operate a MSH Program

The Mutual and Self-Help Housing Technical Assistance Grant Program is highly specialized. It is a program involving both home construction and educational activities. Faced with limited resources, the grant recipients must locate, organize, and educate families of low-socioeconomic means to be responsible homeowners. Therefore, all applicants for technical assistance grants and pre-development grants must demonstrate that they have sufficient experience to properly implement the grant.

Applicants must provide documentation that they have sufficient financial and administrative capacity to operate a MSH program as required by §1944.404(b). Applicants for technical assistance grants who have established this capacity through a pre-development grant application approved within the previous grant cycle or who are existing grantees with at least a satisfactory rating on their most recent grantee evaluation are exempt from this requirement.

Demonstrating Administrative Capacity - Although applicants may have a variety of staffing plans and position titles, several roles are essential for all MSH programs — program administrator, funds administrator, construction supervisor, and program recruiter. The applicant must provide a staffing plan that explains how the organization will staff these roles. In most instances, applicants should provide the names of the individuals who will fill these roles and copies of their resumes or similar summaries of experience. New applicants or existing grantees who are experiencing staff turnover may provide detailed job descriptions in lieu of resumes.

Demonstrating Financial Capacity - To demonstrate financial capacity, applicants must provide their organizational budget for the current fiscal year and a summary of the organization’s financial management and accounting system.

• Organizational Documents

Each technical assistance grant and pre-development grant applicant is required to submit organizational papers, most of which the applicant should already have on hand. This requirement allows RHS to review the papers for items that might be in conflict with various laws and policy (e.g., verification of non-profit status). Applicants must provide the following documents unless the applicant is an existing grantee and the item has not changed since last submitted to the Agency:

• A copy of, or accurate reference to, the specific provisions of state law under which the applicant is organized (This is required only for technical assistance grant applicants and not for pre-development grant applicants);

• A certified copy of the applicant’s Articles of Incorporation and Bylaws or other evidence of corporate existence;

• A certificate of incorporation (if not a public body);

• A tax exempt certification under IRS 501(c)(3) or 501(c)(4) (if not a public body);

• Certification from the state in which the grant is to be awarded that the applicant is in good standing (if not a public body); and

• The names and addresses of the applicant’s members, directors, and officers.

• Financial Statement

All applicants for technical assistance grants and pre-development grants must submit a dated and signed financial statement no more than 12 months old. The financial statement must show the amounts and specific nature of the assets and liabilities together with information on the repayment schedule and status of any debt incurred by the applicant.

These requirements provide RHS information that minimizes the discovery of liens and other debt claims after grant closing. Not analyzing the information for negative credit indicators early in the process may result in an unnecessary waste of human resources, time, and money for the Government and the general public in an attempt to liquidate the grant after it has closed.

• Narrative Statement of the Area to be Served

Applicants for technical assistance grants and pre-development grants must provide documentation that there is a need and demand in their community for the program. Three components are required of the technical assistance applicant:

• Evidence of community support, which might be in the form of letters of support from elected officials, community institutions such as churches or housing authorities, or local residents.

• Evidence of need for the program that might be in the form of housing market studies, vacancy data, census data, local planning data, Housing Authority waiting lists, or information from other such sources.

• Evidence of demand for the program, in the form of lists of income-eligible families who have expressed an interest in participating in the program. Applicants might develop such lists from attendance at MSH informational meetings, from waiting lists at other housing projects, or other similar sources.

For the pre-development grant program, applicants must provide evidence that income-eligible families have expressed interest in participating in a self-help housing program. To demonstrate interest by such families, applicants must submit a list of the names and addresses of families who have expressed interest in the program.

• Very Low-Income Plan

The hallmark of the Self-Help Technical Assistance Grant Program is its focus on providing decent modest housing to rural residents that do not qualify for home ownership by other means. RHS mandates that grantees serve at least 40 percent of those families classified as very low-income. It is critical that applicants formulate a plan to meet this mandate and to give RHS the ability to assess the grantee’s progress towards meeting this requirement.

• Survey of Lots

The technical assistance grantee’s ability to manage a successful program is significantly tied to its ability to acquire and/or develop suitable building sites. Without suitable building sites, the grantee has no chance of being successful even with eligible self-help applicants.

Therefore, it is essential that the grantee provide evidence of access to enough building sites to assure RHS that house construction is feasible. The grantee identifies the site locations to show they are in the geographic area targeted by the grantee to reach eligible households.

Site option loan applicants must provide a copy of the land option or a schedule of proposed options if more than one site will be purchased.

• List of Other Activities

To enhance the grantee’s opportunity to achieve success, RHS requires information concerning the grantee’s other activities and funding sources. Knowledge as to the applicability of indirect cost and cost sharing is acquired resulting in the reduced likelihood of fraud, waste and abuse.

• Statement Identifying Need, Amount of Funds and Projected Time Period

The applicant must provide RHS with information as to why the program is needed, the amount of funds needed, and the amount of time needed to accomplish the goals and objectives of the effort. This information is needed by RHS in its decision-making capacity for determining reasonableness and adequacy of the proposal.

• Self-Help Technical Assistance Grant Predevelopment Agreement

There will be some pre-applicants for Technical Assistance grant assistance that will not have resources to complete the requirements for filling out an application. Once determined eligible, the pre-applicant will be afforded the needed resources to hire staff and purchase space and materials through a predevelopment grant. The pre-applicant may request an amount up to $10,000 for a period of time not to exceed six months to fulfill the requirements of an application. This new resource enables financially stressed organizations to progress to the status of grantee and also reduces lag time between the pre-application and the application approval.

• Statement of Compliance, OMB Circulars and Department Regulations

Prior to grant closing, the technical assistance grant applicant must furnish RHS with a signed statement that it will comply with the requirements of Departmental Regulations 7 CFR Part 3015 and 7 CFR Part 3016.

These signed statements obligate the grantee to meet the requirements associated with the conditions under which the grant is approved and provides RHS with a legal basis for actions that may be necessary in an administrative and/or legal arena.

• Establishing Interest Bearing Accounts

OMB requires recipients of Federal fund advances to establish interest-bearing accounts. Technical assistance grantees are therefore required to comply with OMB Circular A-110, which details the requirements and procedures for establishing and maintaining this account.

• Evaluation Report of Self-Help Grants

All grantee recipients are required to submit quarterly reports. The reports are used to evaluate the performance of the recipients. OMB circulars A-102 and A-110 mandate, among other things, that a grant recipient submit a performance report for each agreement that (1) presents a comparison of actual accomplishments with the goals established for the reporting period, (2) if applicable, explains reasons why established goals were not met, and (3) provides other pertinent information when appropriate, such as an analysis and explanation of cost overruns or high unit costs.

As part of RHS’s monitoring tools, the software system SHARES allows the Agency to verify that technical assistance grantees are making progress towards its Grant Agreement goals. The data collected on this report provides the grantee as well as RHS the ability to properly terminate, adjust or renew/extend the grant. The grantee electronically enters the data monthly, prior to submitting a request for payment. SHARES enable the Agency to quickly check the grantee’s progress toward recruiting families and constructing homes.

• Request for Evaluation Review

Section 1944.419(c) of the regulation authorizes the grantee to request a review of the final evaluation with the RHS Area Director. This authority will afford the grantee the opportunity to have any misunderstanding clarified. This affords both RHS and the grantee the opportunity to correct any errors in the evaluation, which might result in an evaluation, which favors the grantee to the extent of renewing its operation.

• Revised Budget

There may be instances in which the grantee needs to revise their budget upward to meet unanticipated expenses or to adjust for under budgeting. Grantees are authorized to request RHS to consider approving additional funds with documented justification. The request will be submitted in the form of a revised line item budget.

• Audit Report, Non-Profit Organizations

Audits are required annually of the grantees per OMB Circulars A-110 and A-133. The audits will be utilized to verify whether grant funds were managed and expended in a lawful manner.

• Audit Report, Local Governments and Indian Tribes

Audits are required to examine systems of internal control, systems established to ensure compliance with laws and regulations affecting the expenditure of Federal funds, financial transactions and accounts, financial statements, and reports of recipient organizations.

OMB Circular A-102, Attachment P and OMB Circular A-128 require audits to be conducted and establish the requirements for State, Local and Tribal Governments that receive Federal assistance.

• Grantees’ Self-Evaluation

Prior to the development of RD Instruction 1944-I grantees had the option of implementing a self-help evaluation. The objective of the evaluation was to involve the Board of Directors of the grantee’s performance, including compliance with the grant agreement and internal controls. To varied degrees, grantees chose to implement the RHS suggested evaluation or modified versions. However, RHS believes it is important that grantee organizations conduct a formal self-evaluation and that evaluation be uniform to enhance the Agency’s ability to assess it. This required self-evaluation will afford the grantee organizational leadership, the ability to identify poor management, the ability to recognize vulnerability to fraud, waste, abuse, and to make appropriate decisions before involving RHS. The identification of poor management and recognizing the lack of internal controls at the earliest stage results in savings of Federal funds and Government human resources.

• Application for Site Option Loan

Exhibit F of RD Instruction 1944-I sets forth the procedures for making the request for a site option loan. The option funds enable the grantee to access funds in order to obtain control of land. Generally, most grantees would not be able to obtain funds for that purpose from private financial institutions on affordable terms. Often, the grantee’s ability to secure land through this means is what makes the grant feasible.

REPORTING REQUIREMENTS - RECORDKEEPING

• Agreement to Establish a Certified Recordkeeping System

To ensure that the grantee establishes and maintains a system to account for grant funds, RHS requires the grantee to establish a recordkeeping system that is approved by a certified Public Accountant. The system should provide the appropriateness of the managing of funds. Without this requirement, grantees would develop varied recordkeeping systems in unconventional formats resulting in ambiguity.

• Agreement between Grantees and Families

It is necessary for good communication to occur between the grantee and families; therefore, a written agreement is required for this reason. The agreement will detail what is expected of the families as they carryout their responsibilities under the grantee’s supervision. The agreement is beneficial to both parties and will enhance settlement of disputes between the grantee and families and between the families of the Self-Help group. The agreement works to eliminate RHS from internal grantee management and provides RHS with documentation to make objective decisions that it must be involved with.

• Amendment to the Self-Help Technical Assistance Agreement

For various reasons a number of grantees will realize a need to modify their agreements to reflect realistic goals. Usually, the amendment is executed when either the grantee or the Agency makes a determination that the original goals cannot be met.

• Self-Help Technical Assistance Grant Agreement

All grant recipients must execute a grant agreement. The agreement contains the terms, conditions and responsibilities of the grantee. It is the contract between the Federal Government and the grantee.

For uniformity, Exhibit A of RD Instruction 1944-I is used. The agreement requires the grantee to retain financial records, supporting documents, and statistical records for a period of three years.

If any litigation claim or audit is started before the expiration of the three-year retention requirement, it is not applicable to the recipient.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection.

Automated and electronic collection techniques can be utilized by technical assistance grantees to make their monthly request for draw-down of grant funds and to record their quarterly progress reports. Ninety percent of grantees currently report through the Self-Help Automated Reporting and Evaluation System (SHARES). More automation can be expected with the electronic transfer of funds to grantees. Some forms can be completed by the grantees while still online by accessing www.sc.egov.usda.gov, or other forms can only be viewed then downloaded to be completed later by accessing www.usda.gov. The percentage of information collected electronically for all the items listed in this docket is zero.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

RHS is well informed by other governmental departments and agencies and by the applicants that no similar program exists. Therefore, RHS does not believe there is duplication of effort in the collection of information under this program and there is no known way of utilizing existing information.

5. If the collection of information impacts small businesses or other small entities (item 5 of OMB Form 83-1), describe any methods used to minimize burden.

The information is to be collected only from private and public non-profit organizations. Therefore, there is no probability that small businesses will provide information as a result of this program.

6. Describe the consequences to Federal program or policy activities if the collection is not conducted or conducted less frequently, as well as any technical or legal obstacles to reducing burden.

The information collected under this program is considered the minimum necessary to conform to the requirements of program regulations that are established by law such as the requirement for intergovernmental consultation and the Affirmative Fair Housing Marketing Plans. The information collected is also considered to be the minimum necessary to ensure that the intent of the statute is achieved while maintaining consistency with OMB Circulars such as A-102, A-110, A-122, A-128, and A-133.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

a. Requiring respondents to report information more than quarterly. Technical assistance grantees are required to request the amount of grant funds they intend to draw-down on a monthly basis. RHS has determined that monthly draw requests are necessary to ensure that grant funds are expended in a timely manner. If grantees were allowed to draw grant funds quarterly rather than monthly, large amounts of grant funds would go unused for periods of several months after draw. Further, grantees would tend to request draws for more funds than they would likely use, knowing that they would not be able to access funds again until the next quarterly draw.

b. Requiring written responses in less than 30 days. There are no specific information collection requirements that require less than 30 days response.

c. Requiring more than an original and two copies. There are no specific information collection requirements for more than an original and two copies.

d. Requiring respondents to retain records for more than 3 years. There are no such requirements.

e. Not utilizing statistical sampling. There are no such requirements.

f. Requiring use of statistical sampling which has not been reviewed and approved by OMB. No such requirements exist.

g. Requiring a pledge of confidentiality. There are no such requirements.

h. Requiring submission of proprietary secrets. There are no such requirements.

8. If applicable, identify the date and page number of publication in the Federal Register of the agency’s notice soliciting comments on the information collection. Summarize public comments received and describe actions taken by the agency in response to these comments. Describe efforts to consult with persons outside the Agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and record keeping, disclosure, reporting format (if any), and on data elements to be recorded, disclosed, or reported.

A Federal Register Notice was published on January 14, 2009 [70 FR 74762]. A copy of this Notice is attached. No comments were received.

The following organizations were contacted for their views and comments regarding the burden associated with this program:

Sherry Dezwarte

National Council on Agricultural Life and Labor

Research Fund, Inc.

363 Saulsbury Road

Dover, Delaware 19904

(302) 678-9400

Selvin McGhee

Florida Non-Profit Housing, Inc.

Post Office Box 1987

Sebring, FL 33871

(863) 385-2519

One organization stated the paperwork burden could be reduced if fillable forms that can be saved were provided to the applicants.

9. Explain any decision to provide any payment or gift to respondents, other than reenumeration of contractors or grantees.

There is no payment or gift to respondents other than the reenumeration of contractors and grantees.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or Agency policy.

The information collected under the provisions of the program is not considered to be of a confidential nature. The information is collected from organizations that ordinarily are required to make their activities available for public scrutiny.

11. Provide additional justification for any question of a sensitive nature, such as sexual behavior or attitudes, religious beliefs, and other matters that are commonly considered private.

The information collected does not contain any matters of a sensitive nature such as sexual behavior and attitudes, religious beliefs, or other matters considered private.

12. Provide estimates of the hour burden of the collection of information.

See attached spreadsheet.

The number of respondents for burden determination was based on the following estimates. The number of total hours spent per applicant/grantee varies depending on the proposed project, the experience level of the organization, and other factors.

It is estimated that 4,372 man-hours will be the total burden on the public. The annual cost to the public for this collection of information is $87,440 with the average estimated wage class being $20 per hour.

13. Provide an estimate of the total annual cost burden to

respondents or recordkeepers resulting from the collection of information. There are no start up costs involved in this information collection.

a. Total capital and start-up cost component (annualized over its expected useful life). Capital and start-up cost components are not considered.

b. Total operation and meaintenance and purchase of services component. Zero.

14. Provide estimates of annualized cost to the Federal Government.

RHS estimates the cost to the Federal Government to administer this program to be $505,265 per year, which includes the time to collect the information provided by the respondents, cost of printing the regulations, forms, and the Federal Register, and other administrative costs.

Program Management and Administration:

Salaries (1.0 FTE, GS-12) $ 69,764

Salaries (field staff, equivalent of 6.0 FTE, GS-11) 326,964

Training/TA 82,037

Publication costs 20,000

Supplies 6,500

Total $505,265

15. Explain the reasons for any program changes or adjustments reported in items 13 or 14 of the OMB Form 83-1.

There were no changes since the last submission.

16. For collection of information whose results will be published, outline plans for tabulation and publication.

The collection of information will not be published for statistical purposes.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

No forms cleared in this package.

18. Explain each exception to the certification statement in items 19 on OMB 83.1.

There are no exceptions requested.

19. How is this information collection related to the Service Center Initiative (SCI)? Will this information collection be a part of the one stop shopping concept?

This information collection is unlikely to be related to the services that can potentially be provided by the one-stop shopping concept of the Service Center Initiative.

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