R 125.196 Reporting requirements; program periods; compliance monitoring; review; recapture.

Rule 196. (1) The following provisions regarding reporting apply: (a) All recipients of program funds shall report back to the authority on a semiannual basis about their use of program funds in a manner provided by authority staff. The authority staff shall collect information from recipients to establish that the program funds are being spent correctly and to measure the results or performance of its spending against the objectives of the Michigan housing and community development program. (b) The authority staff shall establish reporting forms that must be submitted by the recipients on a semiannual basis. These reports must include both a performance monitoring form and a financial monitoring form. (c) The performance monitoring form must be signed by the chief executive officer or equivalent of the funding recipient and analyze the management performance of the recipient, specifically including a description of the following items: (i) What was done with the program funds and whether it is consistent with the goals and strategies outlined in the application. (ii) How well program activities were performed, including a discussion of how success or failure is measured. (iii) What populations have benefited from the distribution of program funds, including details on results. (d) The financial monitoring form must be signed by the chief financial officer, or equivalent, of the recipient and analyze the financial performance of the recipient. Program funds must be used in an efficient, effective, and appropriate manner, consistent with the Michigan housing and community development program objectives and priorities, including community needs. Program funds must also be appropriately and properly accounted for with documentation that adequate safeguards have been instituted by the recipient to ensure that there is no misuse of program funds. (2) The following provisions apply to Michigan housing and community development program periods and extensions: (a) The initial program period for any loan or grant awarded under the program is 2 years after the date of the award of program funds. All activities related to the use of program funds must be completed within this 2-year time frame. Any program money outstanding on the date that is 2 years after the date of the award is subject to the recapture provisions of this rule and must be immediately repaid to the authority. (b) Recipients shall maintain compliance with each of its contracts and agreements with the authority. (c) Recipients shall comply with any restrictions that are stated in and enforced through a regulatory agreement, grant agreement, or other legal documents associated with any award of program funds. These restrictions may include, but are not limited to, the following, for a term of years: (i) Rent restrictions. (ii) Record keeping and reporting. (iii) Income targeting of tenants. (d) Authority staff shall monitor compliance with project restrictions and any other covenants by recipients in any Michigan housing and community development program fund agreement. An annual compliance fee of up to $100.00 per unit may be charged for this review. (3) Recapture of program funds must be accomplished as follows: (a) The authority has the power to recapture or de-obligate program funds and program funding awards in certain circumstances. The power to recapture or de-obligate program funds may apply to entire awards or portions of awards. Recaptured or de- obligated program funds must be re-deposited in the fund and used to make future awards in the current and next applicable program year or program funding round. (b) The following reasons may justify the de-obligation or recapture of program funds: (i) Inability of the applicant or recipient to effectively carry out the program activity and obligate the program funds within the initial program period 2-year timeline. (ii) Inability of the applicant or recipient to make drawdowns of program funds on a regular and timely basis, such that the authority has grounds to question the overall viability of the project. (iii) Substantial, significant, and lengthy noncompliance with the act, rules, NOFA, RFP, application, biennial plan, allocation plan, allocation formula, program funding agreement, applicable federal requirements, or other documentation or requirements related to any award. In making the decision on de-obligation or recapture in this instance, the authority staff shall consider whether or not the non-compliance is due to factors beyond the applicant's or recipient's control. (iv) If the total cost of the anticipated program activity is less than the total cost anticipated in the application or other documentation provided by the applicant or recipient, or both, the authority may de-obligate the portion of the award exceeding the actual costs of the program activity. (v) At the end of the initial program period and any approved extension of that period, the unspent funds remaining in the program account, project account, or other accounts related to the program activity must be recaptured and returned to the program fund. (vi) The applicant or recipient, or both, voluntarily returns the program funds to the authority and ceases all program activity and reporting upon the return of program funds. (vii) Other reasons justifying recapture or de-obligation approved by the authority, upon notice to the applicant or recipient, or both, of both the authority's consideration of a recapture or obligation decision and notice that the authority has approved a resolution or motion evidencing its decision to recapture or de-obligate the program funds.