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DATE:
5 August 1998
TO:
State Administrators of Social Services Block Grants for
Empowerment Zones and Enterprise Communities (EZ/EC SSBG), State Comptrollers, Empowerment Zones (EZs) and Enterprise Communities (ECs), appropriate city and county governments, and other organizations receiving EZ/EC SSBG funds.
SUBJECT:
State and Local Roles Concerning Fiscal and Administrative Control Procedures for EZ/EC Social Services Block Grants.
RELATED SUBJECTS:
Public Law 103-66; Omnibus Budget Reconciliation Act of 1993; C.F.R. Title 45, Part 96, U.S. Department of Health and Human Services (DHHS) Block Grant Regulations; various guidance letters distributed to States and localities about the EZ/EC program.
PURPOSES:
To restate previous guidance provided by DHHS concerning State and local responsibilities in establishing and applying financial management and control procedures for recipients of EZ/EC SSBG funds. Specifically, to reaffirm that States and EZ/EC Lead Entities are authorized and encouraged to collaborate in establishing these procedures.
POLICY:
In keeping with the community empowerment philosophy and federal flexibility that are the hallmarks of the EZ/EC initiative funding mechanism, it is DHHS policy to authorize State government agencies and local EZ/EC entities to establish fiscal management standards and control procedures concerning the EZ/EC SSBG funds.
As recipients of EZ/EC SSBG awards for use by EZ/ECs, State agencies are responsible for working with the local EZ/EC Lead Entities to ensure the funds are used for programs, projects and activities included in local EZ/EC planning documents and in keeping with applicable laws and procedures.
The control procedures for the EZ/EC SSBG grants may differ from ones applicable to other federally funded programs. They must meet the following two minimum standards:
1. They must be sufficient to ensure adequate oversight of the use of funds at the State and local levels, specifically:
"[F]iscal control and accounting procedures must be sufficient to (a) permit preparation of reports required by the statute authorizing the …grant and (b) permit the tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of the statute authorizing the …grant (45 C.F.R. Part 96.30)."
2. They should, wherever feasible, and in keeping with appropriate State laws and procedures, be structured to allow local EZ/EC organizations sufficient flexibility to demonstrate and implement innovative techniques for community-based planning and economic and human development.
DHHS and its partner federal agencies have a keen interest in the intergovernmental partnership aspects of the EZ/EC Initiative. Therefore, DHHS will be particulary responsive to States and EZ/EC Lead Entities by working with them to facilitate mutually satisfactory resolutions of policy or programmatic differences that may arise between State grantee agencies and local EZ/EC Lead Entities. Positive working relationships between the local entities, the States, and federal agencies, is the key to producing meaningful outcomes for residents of the EZ/EC neighborhoods and communities.
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If you have questions or comments, please e-mail James Gatz of the Office of Community Services.
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This document was last modified 6/13/2001 2:10 p.m. EST
