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§ 583.400 24 CFR Ch. V (4-1 -05 Edition) (f) Audit. The financial management must be fully documented in the recipi- systems used by recipients under this ent's records . program must provide for audits in ac- [58 FR 13871 , Mar. 15, 1993, as amended at 61 cordance with 24 CFR part 44 or part 45, FR 51176, Sept. 30, 19961 as applicable. HUD may perform or re- quire additional audits as it finds nec- § 583.410 Obligation and deobligation essary or appropriate. of funds. (g) Davis-Bacon Act. The provisions (a) Obligation of funds. When HUD and of the Davis-Bacon Act do not apply to the applicant execute a grant agree- - this program. ,ment. funds are obligated to cover the 158 FR 13871 , Mar. 15, 1993, as amended at 61 amount of the approved assistance FR 5211 , Feb. 9, 1996; 64 FR 50226, Sept. 15 , under subpart B of this part. The re- 19991 cipient will be expected to carry out the supportive housing or supportive Subpart E—Administration services activities as proposed in the application. § 583.400 Grant agreement. (b) Increases. After the initial obliga- tion of funds, HUD will not make revi- (a) General. The duty to provide sup- sions to increase the amount obligated. portive housing or supportive services (c) Deobligation. (1) HUD may in accordance with the requirements of deobligate all or parts of grants for ac- this part will be incorporated in a quisition, rehabilitation, acquisition grant agreement executed by HUD and and rehabilitation, or new construc- the recipient. tion: (b) Enforcement. HUD will enforce the (f) If the actual total cost of acquisi- obligations in the grant agreement tion, rehabilitation, acquisition and re- through such action as may be appro- habilitation, or new construction is priate, including repayment of funds less than the total cost anticipated in that have already been disbursed to the the application; or recipient. (ii) If proposed activities for which funding was approved are not begun § 583.405 Program changes. within three months or residents do (a) HUD approval. (1) A recipient may not begin to occupy the facility within not make any significant changes to an nine months after grant execution. approved program without prior HUD (2) HUD may deobligate the amounts approval. Significant changes include, for annual leasing costs, operating but are not limited to, a change in the costs or supportive services in any recipient, a change in the project site, Year. additions or deletions in the types of n If the actual leasing costs, oper- - activities listed in § 583.100 of this part sting costs supportive services for approved for the program or a shift of that year aree less than the total cost more than 10 percent of funds from one anticipated in the application; or . (ii) If the proposed supportive hous- approved type of activity to another, ing operations are not begun within and a change in the category of partici- three months after the units are avail- pants to be served. Depending on the able for occupancy, nature of the change , HUD may require a new certification of consistent with (3) The grant agreement may set Y forth in detail other circumstances the consolidated plan (see § 583. 155) . under which funds may be deobligated, (2) Approval for changes is contin- and other sanctions may be imposed. gent upon the application ranking re- (4) HUD may: maining high enough after the ap- (i) Readvertise the availability of proved change to have been competi- funds that have been deobligated under tively selected for funding in the year this section in a notice of fund avail- the application was selected. ability under § 583 . 200, or (b) Documentation of other changes. (ii) Award deobligated funds to appli- Any changes to an approved program cations previously submitted in re- that do not require prior HUD approval sponse to the most recently published 262