At HORNE, we understand the intricacies of Program Income management and its pivotal role in disaster recovery. This article builds on HUD’s recent training to unpack key concepts, best practices, and explain how HORNE’s expertise can help grantees navigate this critical aspect of grant management.
Understanding Program Income
Program Income refers to the gross income generated from activities funded by CDBG-DR or CDBG-MIT grants. Examples include repayments from loans for housing rehabilitation, proceeds from the sale of properties improved with grant funds, and interest earned on program-related income​​​.
However, not all funds qualify as PI. For instance:
- Income below $35,000 in a single year is generally excluded​​.
- Bank interest accrued on advance payments is also excluded, as interest is not considered program related.
PI serves as a powerful extension of grant resources, enabling reinvestment in recovery and mitigation activities. However, it requires diligent oversight to ensure compliance with federal rules and achieve its full potential.
Core Requirements and Practical Tips for PI Management
Grantees must meet specific requirements to use PI effectively and in compliance with Federal standards. Here are the key takeaways from HUD’s September webinar, along with HORNE’s recommended best practices:
Defining and
Documenting PI
Best Practice: Create robust policies and procedures to clearly define PI sources, establish tracking mechanisms, and ensure alignment with Federal guidelines. Comprehensive documentation- including records of income sources, uses, reconciliations, and retention policies- is key to ensuring transparency, accountability, and compliance.
Administrative Considerations
Best Practice: Leverage technology to automate program income reporting and to streamline reconciliation processes. HORNE helps grantees maximize tools like the DRGR system for seamless PI tracking and reporting, including the on-going reconciliation of data reported in the grantee’s own systems with program income and other data that must be reported in DRGR.
Retention and Usage Rules
Best Practice: Monitor subrecipients’ activities to mitigate risks and maintain compliance. HORNE provides grantees with a range of subrecipient monitoring and oversight solutions to safeguard program integrity.
Closeout and Transition
Best Practice: Start grant closeout planning early. The transition of PI is often complex and requires meticulous attention to detail. HORNE’s experienced professionals specialize in guiding grantees through this process, ensuring compliance with federal requirements and a seamless transition to the annual CDBG program.
Lessons from HUD’s Webinar Series
The two-part webinar series (Â linked here ) underscored the importance of understanding PI requirements and implementing robust management practices:
- Part 1: Focused on defining PI, establishing administrative frameworks, and maintaining accurate documentation​​.
- Part 2: Addressed reporting, reconciliation, and the transfer process, with practical guidance on using the DRGR system to manage PI effectively​​.
Key insights included:
- The necessity of accurate quarterly reporting through DRGR, which integrates financial data with performance measures.
- Strategies for preparing grant closeouts, including reconciling discrepancies and ensuring compliance with HUD guidelines​​.
HORNE: Your Trusted Partner
HUD’s webinar highlighted that effective PI management is not just a regulatory necessity—it is a pathway to amplifying the impact of disaster recovery programs. Yet, the complexity of federal requirements can be daunting. This is where HORNE steps in.
HORNE’s Technical Advisory Group (TAG) includes industry leaders with decades of experience, from former HUD officials to financial management specialists. This collective expertise equips us to guide clients through every aspect of PI management, from developing compliant policies to mitigating fraud risks.
Why Choose HORNE?
- Proven Expertise: HORNE’s team is adept at navigating the complexities of Federal funding, offering tailored solutions to streamline your operations.
- Strategic Support: We go beyond compliance, helping you unlock transformative outcomes and maximize program impact.
- Comprehensive Services: From financial management controls to system integrations and subrecipient monitoring, we offer end-to-end support.
At HORNE, we understand that compliance is not just a requirement—it is an opportunity to drive transformative outcomes and strengthen communities. Contact us today to discover how our team can help you achieve your goals with confidence and precision.
About the Author
Michael Chua
A senior manager in HORNE’s government services group where he serves as a subject matter expert for HORNE’s disaster recovery and mitigation portfolio. He provides technical advisory services to both clients and the firm’s program teams regarding policies, regulations, program design and implementation, monitoring and compliance and many other areas related to Federal grant implementation, to help our clients achieve impactful recovery.
