Frequently Asked Questions on Energy Efficiency and Conservation Block Grant Financing Program Compliance and Reporting

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Find answers to frequently asked questions (FAQs) regarding financing program reporting and compliance for programs developed using U.S. Department of Energy (DOE) Energy Efficiency and Conservation Block Grant Program (EECBG) funding. FAQs are divided in the following categories:

A-133

On p 10 of the letter, it says: Movement of RLF funds and/or LLR funds is considered material towards the $500,000 threshold of federal funds for A-133 audits. Is there a citation for this guidance on A-133?

The Office of Management and Budget A-133 Compliance Supplement for the EECBG Program (CFDA 81.128) directs that: "Federal funds used to capitalize RLFs or fund LLRs under an EECBG award retain their Federal character for the entire period of time that the funds are used for such purpose (i.e., at each revolution of funds) and are subject to the compliance requirements that apply to the expenditure of program funds even after the period of performance of the award....If a grantee has established a RLF, auditors are encouraged to include in their samples loans made from the fund during the audit period. Such transactions should be reviewed in the same manner as any other expenditure under the program." (emphasis added)

Administration Funds

Would the third-party administering the loan loss reserve (LLR) fund, be allowed to claim "administrative expenses" for loans maintenance and annual reporting data provision? How should the recipient define administrative costs? What should be considered administrative versus direct?

EECBG Program Notice 11-002 says that reporting costs are excluded from administrative costs. DOE does not define specific administrative costs for this program, as local grantee procedures should prevail. Loan maintenance may be an applicable administrative expense depending on established grantee procedures.

 

Would the third-party administering the LLR, be allowed to claim "administrative expenses" for loans maintenance and annual reporting data provision? If yes, what mechanism would exist after the grant is retired w/ no further eligible activity, to pay for such expenses?

Grantees are expected to structure post award activities such that expenses are factored into the activities, such as establishing fees for borrowers that can sufficiently sustain the activity (i.e., program income), keeping in mind that the 10% administrative cost limitation still applies per EECBG Program Notice 11-002. Otherwise, grantees shall cover administrative costs in excess of 10% from their own funding or return the EECBG funds to the U.S. Department of the Treasury.

 

What is the cap on funds that can be used for administrative expenses?

Under the EECBG Program, an eligible unit of local government or an Indian tribe may use an amount equal to the greater of 10% or $75,000” for administrative expenses, excluding the cost of meeting reporting requirements (42 USC 17155(b)(3)(A)). A state may not use more than 10% percent of program funds for administrative expenses (42 USC 17155(c)(4). Recipients may apply this 10% limit to internal and contracted administrative expenses to a third party. In the case where a sub-award is used towards the administration of a Recipient’s prime award, the administrative expenses must be counted towards the 10% limitation. When a Recipient provides a sub-award, administrative expenses may be accrued by the sub-awardee beyond the 10% limit. However, DOE recommends that Recipients stay within the 10% limit for sub-awardee administrative funds. See EECBG Program Notice 11-002 (Appendix 8) for further details. The cap on funds that can be used for administrative expenses applies to the funds that the Recipient received under the EECBG program, which include principal repayments under an RLF. The cap does not apply to program income, including interest paid by borrowers under an RLF. See EECBG Program Notice 9-002D (Appendix 2) for further details.

 

Can a grantee exceed the 10% limit for administrative funds after closeout?

If the grantee fully utilized funds for administrative expenses during the grant, they may not use any repayment of loan principal for administrative because loan principal repayments are also subject to the cap on administrative expenses. They can use repayment of interest on the loans for administrative expenses because interest repayment is not subject to the cap.

 

Can grantees report administrative costs associated with program management and be assured by DOE that there is no problem if those costs exceed 10%?

Grantees should report the federal funds used for administrative costs for the financing program. If the grantee had fully used their administrative 10% or $75,000 during the grant, then the only administrative costs they can report are if they used interest payments to pay for administrative costs.

 

Can a state recipient who is re-negotiating a contract with sub-grantees allow them to use up to 10% of the funds for administrative expenses, when the state used 10%of their funds for administrative during the active grant period?

EECBG Program Notice 11-002 clarifies that sub-grantees on state EECBG awards can charge administrative costs in addition to the amount charged by the prime state recipient. The notice also provided an interpretation that states can charge reporting costs over and above the 10% administrative cost limitation.

 

Davis-Bacon Act

When are financing programs for commercial construction projects subject to the Davis-Bacon Act (DBA)? Please provide an example.

As set forth in the July 15, 2014, grantee letter, DBA requirements would generally apply for any loan made under an EECBG financing program for a commercial construction project. Specific questions should be submitted to EECBG@ee.doe.gov.

 

When does DBA not apply?

EECBG Program Notice 09-002D states that individual homeowners receiving loans supported by a financing program are not required to comply with DBA. Unless repurposed to another EECBG activity, LLRs and third-party loan insurance are not subject to DBA, because the funds are not being loaned or used for construction or installation work. If the LLR is used only for the purposes of providing a fund for the third-party lender in the event of default by the borrower, DBA is not applicable to the LLR fund.

FedConnect

What should a retired grantee do when the FedConnect website no longer works and the phone number for the helpdesk doesn’t work any longer?

TBD

Interest

Should interest earned on the reflow dollars be reported as program income in annual reports?

This is covered on page 7 of Appendix 2: EECBG Program Notice 09-002D, which says interest earned on loans is program income and subject to the terms and conditions of the grant.

 

EECBG and the State Energy Program provide guidance on interest earned on advances. States can roll the interest into RLF and LLR programs while local governments must return funds to the U.S. Department of the Treasury. Would this guidance also be applicable to interest earned on loan repayments and interests held in interest-bearing bank accounts?

If a grantee, whether state or local, has a loan fund where loan repayments are placed in a bank account that earns interest, the interest is program income and can be added back to financing program funds and is not required to be repaid to DOE.

Modifications

Can a financing program change loans made to a commercial entity to "forgivable" loans, thereby making them grants instead of loans? What kind of scope change would that be?

Changing a loan program to a grant program (which, depending on the circumstances, may or may not be an eligible use of EECBG funds under Section 544 of the Energy Independence and Security Act of 2007 (EISA) would typically be considered a change of award scope, most likely from activity category 4 (Financial Incentive Programs) to category 5 (Energy Efficiency Retrofits, described in EISA as "Grants may be made to nonprofit organizations and governmental agencies for the purpose of retrofitting existing facilities to improve energy efficiency"). The "Repurposing of Award Funds..." section in the July 15, 2014, letter to EECBG financing recipients should be referenced for guidance on effectuating a scope change.

Re-Purposing

What formal communication for re-purposing to DOE is required within 10 business days, as there’s no perceived scope change?

If there is no scope change, the grantee should email the project officer as soon as possible to ensure (1) concurrence on the determination about scope change, and (2) that the grantee has enough time to complete the projects before the period of performance end date.

 

Can a grantee offer cash to buy out a bank with LLR funds attached to a loan program in order to avoid the need for 7 years of reporting on use of federal funds on an EECBG financing program?

A grantee can use its own funding to replace the EECBG-provided LLR funding that is backing a non-EECBG loan program, and return funds to DOE for the same LLR amount or repurpose for a quick expenditure.

 

If an active grantee wants to re-purpose funds, are they free to do that when they are in close out or do they have to wait for the official “retirement” of the grant?

A grantee can either (1) repurpose with no change in scope as an active grant and finish all work by the period of performance end date, or (2) can wait until the grant is retired and request to repurpose via email.

Reporting

Could there be an “N/A” for Historic Preservation (HP) and DBA reports?

Yes, although reports must be submitted as long as the grantee is holding EECBG funds. Reports may indicate "N/A" or "0" as applicable.

 

Does an active grantee have to submit third- and fourth-quarter reports in addition to an annual report for Fiscal  Year 2014?

Since DOE issued the letter to financing programs after the June 30, 2014, end of the second quarter EECBG reporting period, EECBG grants with financing programs should submit second-quarter reports but are excused from third- and fourth-quarter reports in PAGE.

 

Must recipients submit reports for DBA & HP since their period of performance ended or since the letter to grantees came out?

DBA and HP reporting is required on an ongoing basis as long as the recipient is operating an EECBG-funded financing program, regardless of when the project period ended.

 

Should forgiven late fees be considered part of the total reported as loan losses on the annual?

No. Late fees are program income that was never earned and therefore should not be counted as a "loss" of program funding.

Reporting: Jobs

Do you calculate jobs created on only EECBG funds? What is the method?

EECBG Program Notice 10-08A provides detailed instruction on how to calculate and report job creation and retention. Use a full-time employee to convert part-time or temporary jobs into comparable metrics. Use hours worked to report job creation and retention. Do not include indirect jobs (like jobs at a materials supplier). Do not report induced job figures, which includes a job created or retained elsewhere in the economy that is not directly charged to projects/activities. New jobs also include an existing unfilled position that is filled by the EECBG Program. Existing jobs are those that previously existed, but are now paid for by the EECBG Program. 

 

Why do grantees have to report job creation after grant retirement if they discontinued the requirement to report jobs in FR.gov? Why is there a question on the annual report?

The EECBG Program has included jobs reporting as an important criterion for measuring success of financing programs, not because it is a continuation of FR.gov.

 

Does a grantee have to report job numbers for loans that supported projects in which the contractor awarded sub-contracts for construction in commercial projects?

Yes, please include these job numbers in the total.

Reporting: Davis-Bacon Act

If you self-administer an RLF, and none of the loans were made for municipal or public projects, do you have to submit a report twice a year with all zeroes, or can you be exempt from submitting the report?

The Semi-Annual Davis-Bacon Enforcement Report will continue to be required on April 21 and October 21 each year as long as the recipient is responsible for EECBG funds. The fact that no loans are made for municipal or public projects does not affect DBA applicability. The funds for the RLF came from the Recovery Act and all projects funded with the loan are subject to DBA, therefore recipients must report all loans and any DBA issues with those loans. The only exception for DBA is for loans to individuals.

Reporting: Historic Preservation

Is annual HP reporting required until all loans are repaid or until all federal funds loans are returned to the U.S. Department of the Treasury (assuming these funds will not be repurposed after the grant is retired)

Annual HP reporting is required as long as federal funds are being used in the financing program. So if $10 EECBG dollars was lent out and paid back to the recipient, then the recipient still has $10 in federal funds until the recipient returns the $10 to U.S. Department of the Treasury. Either disposition of the $10 must be reported in the annual report covering that time period.

 

If you self-administer an RLF, and none of the loans were made for historically significant buildings, do you have to submit an HP report annually with all zeroes, or can you be exempt from submitting the report?

The Disposition of Historic Preservation Consultations by Category Report will be required annually on September 1 as long as the recipient is responsible for EECBG funds.

The Disposition of Historic Preservation Consultations by Category Report will be required annually on September 1 as long as the recipient is responsible for EECBG funds.

The original funding opportunity announcement (FOA said that non-profits are eligible if designated by a local government. Can the direct recipient designate a non-profit as an eligible entity and then transfer to them?

An original recipient may authorize an eligible secondary entity to assume responsibility for ongoing EECBG financing programs in accordance with the eligibility requirements in Section III, Part A, "Eligible Applicants" of the Competitive EECBG FOA (DE-FOA-0000148) and with the July 15, 2014, financing program letter to grantees, with the understanding that the original recipient is ultimately responsible for reporting and compliance requirements if the transferee fails for any reason to uphold those requirements.

Better Buildings Neighborhood Program: Compliance Responsibility in Transfers of Award to Another Eligible Entity

If the original award recipient is ultimately responsible for reporting and compliance regardless of any subsequent transfers what does transferring accomplish? What exactly would the grantee remain responsible for?

The original recipient may authorize a secondary eligible entity to perform reporting and maintain compliance with EECBG requirements, as was stated in the July 15, 2014, financing programs letter to grantees. Because no formal modification was executed to transfer the award to a secondary entity, and because the original recipient was designated either by formula (under the EECBG Formula Program) or by competition, the stipulation that the original recipient is ultimately responsible would become effective in cases where the transferee fails to report, violates EECBG requirements, or otherwise fails in its compliance responsibilities.