SUPPLEMENTARY INFORMATION:

I. Background

The Federal government has a duty to the American public to ensure that taxpayers' dollars are spent responsibly and only for permitted purposes. In many of HUD's programs, the funds are awarded to grantees, who then have the responsibility for restricting the use of grant funds to legally eligible expenses. However, there is not a consolidated, consistent mechanism for HUD to confirm that grantees are spending their funds properly. This demonstration is intended to test one such way of adding additional oversight to prevent waste, fraud, and abuse.

II. Demonstration

HUD will design and develop a recipient financial reporting portal to allow recipients of HUD funds from the Public Housing, Community Development Block Grant—Disaster Recovery, and Continuum of Care programs to upload supporting evidence ( e.g., receipts, invoices, or pay records) to justify grant expenditures. The demonstration will allow HUD to test how to increase grantee accountability while increasing HUD's understanding of the business and technical requirements for a reporting portal and grantees' resources and ability to use such a system.

A. Increasing Transparency, Efficiency, and Compliance

Through the demonstration, HUD will gain a greater understanding of current reporting burdens and what grant recipients need to meet future reporting requirements. Specifically, this demonstration will validate that every dollar received from HUD is accounted for, thereby promoting trust and accountability. Further, the demonstration's centralized system will seek to streamline the reporting process for recipients, making it easier to manage and submit required information. Finally, this demonstration aims to facilitate recipients' adherence to federal requirements regarding the use of federal funds.

HUD will use this demonstration to evaluate the quality and completeness of the evidence submitted through the preliminary portal to ensure that HUD funds are being used the way they were intended. The demonstration will allow for the refinement of the reporting portal, business rules, reporting standards, and technical requirements. HUD will also use the demonstration period to evaluate current reporting burdens as compared to the level of burden placed on participants by the new system.

B. Parameters of the Demonstration

Approximately nine voluntary participants will use the new preliminary reporting system to upload documentation, such as a receipt or invoice, that substantiates their use of funds from previous drawdowns. Participants will be able to share feedback and user experience with HUD to fine-tune the system as needed. Additionally, HUD will review documents and request exhibits that detail the following:

• Current accounting software and payroll systems.
• Current processes for recording cash disbursements.
• Current policies for management and oversight of the agency's grants, cost allocation, and request for disbursements.
• Vouchers, or similar documentation, to track cash disbursements.
• Sample proration used where allocation is made to various grants.

HUD expects that the demonstration will last for approximately 2 months. After that time, the participants will no longer need to upload documentation to the preliminary portal, while HUD evaluates the results of the demonstration and determines what next steps are appropriate and feasible.

III. Questions for Consideration

1. What types of evidence are most appropriate for demonstrating the proper use of grant funds?

2. What are ways HUD can alleviate administrative burden as we transition funding recipients to new grants management and reporting systems? ( printed page 42776)

3. What documentation collected via a reporting portal would most efficiently and effectively ensure that taxpayers' dollars are spent responsibly and only for permitted purposes?

IV. Solicitation of Public Comment

In accordance with section 470 of the Housing and Urban-Rural Recovery Act of 1983 (42 U.S.C. 3542), HUD is seeking comment on the demonstration. Section 470 provides that HUD may not begin a demonstration program not expressly authorized by statute until a description of the demonstration program is published in the Federal Register and a 60-day period expires following the date of publication, during which time HUD solicits public comment and considers the comments submitted. The public comment period provided allows HUD the opportunity to consider those comments during the 60-day period and be in a position to commence implementation of the demonstration following the conclusion of the 60-day period.

90 FR 42775