It is suggested that Program Match not exceed the required 25% of the requested amount of funds.

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1 ADMINISTRATIVE OFFICE 811 Wilshire Blvd., 6 th Floor Los Angeles, CA Ph: Fx: TTY: MEMO To: Providers, Agencies, & Community Partners From: Nancy Neilson, Sr. Funding Manager : November 18, 2013 Re: HUD Continuum of Care Program FY 2013 Technical Assistance Bulletin Program Match (Cost & Revenue) Requirements For sub-recipients receiving CoC awards formerly known as SHP awards This Technical Assistance (TA) communication was designed in conjunction with HUD, to provide clarification about the HUD and LACoC requirements for Program Match for the upcoming 2013 Continuum of Care Program NOFA (also known as SuperNOFA) for renewing CoC grants formerly awarded under the Supportive Housing Program (SHP) component. Program Match is HUD s method of ensuring enough resources are dedicated to a project and is a required Program Match (cost & revenue) of 25%. This document will provide direction regarding Program Match requirements, the use of inkind as match, the documents required to be submitted if in-kind Match will be used, regulations to reference, and the only two templates that will be accepted for use to record Match in the LACoC FY2013 Consolidated Application. Public Housing Authorities and Cities acting as direct recipients will provide direction regarding Match for sub-recipients formerly awarded under the SPC component. What is Program Match? HUD requires all recipients or sub-recipients (grantee) of Continuum of Care Program (CoC) funds to use additional resources as required Match or Program Match. The resources must be identified at the time of application or renewal. Each resource identified must be supported by the required written documentation described in this TA bulletin. All eligible program costs, except leasing (which may be excluded from match), must be matched with no less than a 25% cash or in-kind Program Match. All Program Match must be eligible as defined by the CoC Program Interim Rule, 24 CFR Part 578, subparts D and F. Match must be aligned with one or more of the identified funded line items in the approved project budget to ensure that it supports current program design and function. Services, operations, and administrative costs all are included in eligible program costs. It is suggested that Program Match not exceed the required 25% of the requested amount of funds. It is important to remember that Program Match and Leverage are separate and distinct. Leverage will be covered in a separate TA bulletin and Posted on the LAHSA web site.

2 What is the difference between Cash and In-Kind? Cash as Program Match Cash being used to fund Program Match provided by an organization s internal funds (such as contributions from a fundraising event) must be accompanied by a letter from the organization committing the required cash to the program. The recipient or subrecipient must ensure the cash is transferred to the program and used to pay costs of eligible activities during the period of the grant. Cash from external sources, such as funds from another grant award, must be supported by a commitment letter from each source of funding acknowledging the use of the funds as Program Match, and approving of such use. For example, a subrecipient receiving ESG funds from LAHSA could use those funds as Program Match if they requested and received a confirming letter. Another example would be a direct recipient receiving HOPWA funds or other similar grants in which a confirming letter was received. Certain funds are not eligible to be used as Project Match. For example, CoC Program funds cannot be used to match other CoC funded projects, so HUD rental subsidy through the Public Housing Authority cannot be used to match services funded under the CoC Program. Where client rent is being used as cash match, the agency should submit rental income projections for the 12 month grant period. An Excel spreadsheet is the best tool to capture this data. The required template for a Cash Program Match letter is attached as Exhibit A to this TA bulletin. In-Kind Program Match In-kind Program Match may include the fair rental value of real property, equipment, goods, or services contributed to the project at the time of donation provided the items or services are aligned with the program budget and a funded line item. In-kind match is accounted for only once - at the time goods are donated or at the time committed services are used. The exception to this is the rental value of real property provided to the program. The monthly fair rental value for the use of the property used in the program can be recorded each month that the property is made available to the program. For example, although the amount can only be accounted for once if it is an in-kind donation of rental space its value as a recorded in-kind contribution may be broken out into twelve (12) month increments. Services provided by individuals used as In-Kind Project Match must be for services included in the program budget and valued at rates consistent with those ordinarily paid for similar work in the organization and geographic region. In some cases (such as Los Angeles) universal rates approved by HUD exist and are available on the LAHSA web site on the Funding Page. An in-kind donation is a contribution of time, service or goods made by a donor to help support the operations or services provided by your organization. It isn t cash. Therefore the donor does retain a degree of control over the donation that doesn t occur when the donor gives you a cash donation. In the event that the grantee identified an in-kind source that is unavailable during the contract period, the grantee will use cash to meet the requirement. Nothing relieves a grantee from meeting full Match requirement under the grant. Grantees must have documentation of match prior to CoC Program application to ensure that correct information is used in the SuperNOFA application and is available to HUD. The required template for In-kind Program Match is attached as Exhibit B to this TA bulletin. This template is a required, as it meets the HUD mandated MOU requirements of (I)(b)(4)

3 How should Finance staff record in-kind Program Match? Donations of supplies, equipment, or services from an individual or a company are considered an in-kind contribution by the Internal Revenue Service. Nonprofits must properly record in-kind contributions received. In-kind contributions are recorded as both income and expenses when they are received. Many grants require a match of funds or effort equal to a designated percentage of total funds received. However, not all donated time or materials may be attributed to every grant. Only the time and materials that are directly applicable to the grant and result in the advancement of the project should be included as an in-kind match for the project. An organization should set up the appropriate sub-accounts in the General Ledger (GL) to allow the recording of a transaction in accordance with Generally Accepted Accounting Principles (GAAP) and which allow for the tracking of information required to report on for financial statement purposes and for CoC match. An In-Kind Account must be set-up in the (GL), with specific sub- accounts for in-kind match categories (fair rental property, goods, services, etc.) set up in subsidiary ledgers. A financial software package (similar to Quick Books Pro) can accommodate this type of general and subsidiary ledger format. In-kind match will be verified by LAHSA/HUD during monitoring by reviewing a recipient or subrecipient s GL, the sub-accounts created for in-kind match and back up documentation corresponding to the approved budget. If a recipient or subrecipient has specific questions regarding properly recording in-kind transactions for application of GAAP as it applies to your organization, we recommend that you consult your accounting or tax professional. For assistance with specific software contact your IT professional. Where can I get the required templates? The required documentation includes a firm financial commitment, signed by a person with authority, on the letterhead of the organization, conditioned only upon HUD approval of the grant, and has a current date, prior to the start of the application and no more than 60 days from the date of the award announcement. Exhibit A and Exhibit B are both attached or can Word Versions be accessed through this link: Exhibit A - Program Match Template Exhibit B - In-Kind Letter Template These templates will also be available on-line on the Funding page at

4 Exhibit A Issuing Organization Letterhead Mr./Ms. AAAAAA, Executive Director Organization Name Organization Address City, State, Zip Re: Project name and HUD grant No Dear Ms/Mr. AAAAAA: This letter provides documentation that (XYZ Organization) and the (Project Name) is the recipient of (grant/other) funding from (Issuing Agency name). This funding is available to the organization and program covering the period mm/dd/yy through mm/dd/yy. We understand that the funding provided by us to the organization and program will be utilized to support cash match requirements under the HUD requirements for McKinney Vento program awards and approve of the use of these funds for cash match purposes, specifically for the above referenced grant. Please contact us if you need any additional information. Sincerely, Issuing Agency Official Title Cc: Nancy Neilson, LAHSA Rhonda Wilson, LAHSA

5 Letterhead of Organization or Agency Providing In-Kind Mr./MS/AAAAA, Organization Receiving In-Kind Contribution Name Organization Address City, State Zip Re: Project Name and HUD Grant No. Exhibit B Dear Mr./Ms. AAAAA, We are pleased to present the following confirmation of in-kind contribution to your project. Representative of Issuing Organization Name of Organization Providing Contribution In-Kind Contribution Type of Contribution Numbers of Individuals to be Served with the Contribution Value of the Contribution per Individual Total Value of the Contribution Name of Project Name of Project Sponsor Organization the Contribution will be available Name of Person Authorized to Commit This Contribution (Month: ), 2014 through (Month: ), 2015 Title of Person Authorized to Commit This Contribution Signature of Person Authorized to Commit This Contribution