Low Income Home Energy Assistance Program
Division of Energy Assistance/OCS/ACF

Submission of Leveraging Reports on FY 1998 leveraging activities, in order to qualify for FY 1999 leveraging incentive fund grant awards

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THIS CONTAINS INFORMATION ISSUED BY THE U.S. ADMINISTRATION FOR CHILDREN AND
FAMILIES IN LIHEAP ACTION TRANSMITTAL NO. LIHEAP-AT-98-4A, DATED 08/98

TO:            LOW INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP) GRANTEES
               AND OTHER INTERESTED PARTIES

SUBJECT:       Submission of Leveraging Reports on FY 1998 leveraging
               activities, in order to qualify for FY 1999 leveraging
               incentive fund grant awards
RELATED
REFERENCES:    Low Income Home Energy Assistance Act, Title XXVI of
               the Omnibus Budget Reconciliation Act of 1981, Public
               Law 97-35, as amended Final Rule, published in the Federal
               Register on May 1, 1995 (60 FR 21322 et seq.)(included in
               LIHEAP-IM-95-20)

DUE DATES:     (1)  November 30, 1998 for applications for FY 1999
               leveraging incentive awards based on FY 1998 leveraging
               activities.

               (2)  September 30, 1998 for amendments to FY 1998
               plans to add leveraging activities carried out during
               FY 1998

PURPOSE:       To inform LIHEAP grantees that they must submit reports
               covering leveraging activities that took place in FY 1998
               to the Office of Community Services (OCS) by November 30,
               1998, in order to qualify for FY 1999 leveraging incentive
               fund awards.  The required  Leveraging Report forms and
               instructions for their completion are attached.

               Grantees also must submit LIHEAP plan amendments including
               and/or revising descriptions of leveraging activities that
               took place in fiscal year (FY) 1998 by September 30, 1998,
               in order to have them qualify for FY 1999 funds.

BACKGROUND:    The LIHEAP leveraging incentive program rewards LIHEAP state,
               tribal, and territorial grantees who have acquired nonfederal
               home energy resources for low income households, expanding
               the effect of their federal LIHEAP funding.

               The Department of Health and Human Services (HHS) issued final
               implementing regulations for the leveraging incentive program
               on May 1, 1995 (60 FR 21332).  The May 1995 leveraging final rule
               replaced the interim final rule published in 1992, and became
               effective on October 1, 1995, the first day of FY 1996.

               Leveraging requirements in the regulations are based closely
               on the leveraging requirements in section 2607A of the Low
               Income Home Energy Assistance Act.

               Under the leveraging incentive program, leveraging incentive
               awards in a fiscal year (the award period) are based on countable
               leveraged resources/benefits that were provided to low income
               households during the previous fiscal year (the base period).  For
               example, FY 1999 incentive awards will be allocated to grantees
               based on countable leveraged resources that were provided to
               low income households in FY 1998 in order to have them qualify for
               FY 1999 funds.

               Grantees desiring leveraging incentive funds must submit an
               application--the LIHEAP Leveraging Report--that describes
               and quantifies the leveraging activities they carried out during the base
               period.  HHS then determines whether the reported activities meet
               the requirements of the LIHEAP statute and regulations, and
               therefore are countable under the program.  Leveraging incentive
               funds are allocated using a formula that takes into account the value
               of each applicant's countable leveraged resources compared to its
               regular LIHEAP allotment and to the total amount leveraged by all
               applicants.

CONTENT:       Applications for FY 1999 Leveraging Incentive Awards

               Grantees that wish to apply for LIHEAP leveraging incentive
               funds to be awarded in FY 1999 must submit a LIHEAP
               Leveraging Report on their FY 1998 leveraging activities
               to OCS by November 30, 1998.  The reports must be postmarked
               or hand-delivered to OCS by this date, or they will not be
               accepted.  The reports should cover only leveraged
               resources/benefits that were provided to low income
               households in FY 1998.  FY 1998 leveraging activities were
               to be carried out under 45 CFR 96.87 of the final rule
               published May 1, 1995.The attached Leveraging Report form
               is the same one that was used for FY 1997 activities.

               Advance appropriations of $1.1 billion for FY 1999 were
               included in the FY 1998 HHS appropriations law (Public
               Law 105-78).  Of this amount, $27,500,000 was earmarked for
               the leveraging incentive program, including the Residential
               Energy Assistance Challenge option program (REACH).  We
               expect that we will set aside for REACH the full 25%
               allowable, or $6,875,000, out of leveraging incentive funds.
               This will leave $18,125,000 available for leveraging
               incentive awards.  However, you should be aware that the
               House of Representatives has proposed to rescind the advance
               FY 1999 appropriation for LIHEAP.  Until final Congressional
               action, we cannot be certain what funds will be available for
               FY 1999.

               Leveraging Report Forms

               The LIHEAP Leveraging Report consists of two parts.  Part
               One, the Resource/Benefit Description Pages, is a two-page
               form that is to be completed for each separate leveraged
               resource that a grantee proposes to count for this base
               period.  It requests information that will enable HHS to
               determine whether each resource meets the requirements
               of the LIHEAP statute and the May 1995 final rule and is
               therefore countable.  Part 2 of the Leveraging Report, the
               Summary Page, is to show the grand totals for all of the
               grantee's proposed leveraged resources; it also is to
               include a certifying signature by the grantee's chief
               executive officer or designee.  (If a designee signs, be
               sure that OCS has a copy of the delegation of authority.)

               Grantees may use their own versions of Part 1 if they use
               the same format and wording as the pre-printed form.  They
               must use HHS' version of Part 2.  The forms are available
               on diskette for grantees who have WordPerfect 5.1 and soft
               fonts.  (We regret that it is not available at this time
               in Word 6.0 format.  When it is, we will make it
               available via the LIHEAP web site, which is located at
               http://www.acf.gov/programs/liheap.)

               Grantees also may wish to use the Sample Leveraging Summary
               Worksheet, to record the financial information from item 1
               of the Resource/Benefit Description Pages for each resource
               and to calculate the grand totals to be entered on the
               Summary Page.  Completing this worksheet would help ensure
               that no amounts are omitted or double-counted and that the
               calculations are correct.

               Applicants for leveraging incentive funds should carefully
               read and follow the Instructions for Completing LIHEAP
               Leveraging Report Forms.  They also should consult
               section 96.87 of the May 1995 final rule and the part of
               the final rule's preamble that deals with the leveraging
               incentive program.

               We ask that grantees ensure that their Leveraging Reports
               are complete and accurate before they submit them, in order
               to speed up the review and award process for everyone.  Be
               sure that all submitted resources/benefits meet the
               requirements of the LIHEAP statute and regulations and were
               provided to low income households between October 1, 1997,
               and September 30, 1998.  Re-check the mathematical
               calculations.  Enter the numbers in items 1B, 1C, 1D, and 1E
               of the Resource/Benefit Description Pages, and on the Summary
               Page, as whole numbers rounded to the nearest whole dollar,
               or rounded to the nearest multiple of 10 or 100.

               In some of the Leveraging Reports for prior fiscal years,
               states' local administering agencies completed the Resource/
               Benefit Description Pages for activities taking place in
               their areas.

               The quality of the reporting varied significantly among the
               local agencies.  If a state uses this process, it should
               review the forms before submitting them to OCS and
               ensure that all items are complete and accurate, that the
               activities took place during the proper base period and meet
               the requirements of the statute and regulations, and that the
               state (not the local agency) is shown as the LIHEAP grantee.
               The resources should be numbered sequentially for the state
               as a whole, rather than starting over with #1 for each local
               agency.

               Leveraging Requirements

               In order to count under the leveraging incentive program, a
               resource/benefit must meet all of the requirements of 45 CFR
               96.87(d)(1) and at least one of the three criteria/requirements of 45
               CFR 96.87(d)(2) in the May 1995 final rule.

               To meet criterion (i) of section 96.87(d)(2), the
               grantee's LIHEAP program, at the central and/or local agency
               level, must have a substantive role in developing and/or
               acquiring the resource/benefits from energy vendors through
               negotiation, regulation, and/or competitive bid.  Only
               resources obtained from energy vendors, e.g., utility
               companies or delivered fuel vendors, may be counted under
               criterion (I).

               To meet criterion (ii) of section 96.87(d)(2), the
               grantee must appropriate or mandate the resources/benefits
               for distribution to low income households through (within
               or as a part of) its LIHEAP program, in accordance with the
               LIHEAP statute and regulations and the grantee's LIHEAP plan
               and program policies that were in effect during this base
               period, although the leveraged resources/benefits do not
               necessarily have to be mentioned by name in the plan.  In
               other words, the benefit from the resource is a part of a
               household's LIHEAP benefit, not an additional benefit that
               is not part of the LIHEAP program.  Under this criterion,
               for example, a grantee could not count assistance with
               cooling costs or purchase of fans if the plan did not
               include these activities for the regular LIHEAP program.
               Leveraged benefits that supplement LIHEAP benefits that were
               inadequate, but that are distributed outside the LIHEAP
               program, would not count under criterion (ii).  Grantees
               should look to criterion (iii) for such resources.

               To meet criterion (iii) of section 96.87(d)(2),
               the grantee must appropriate or mandate the resource/
               benefits for distribution to low income households as
               described in its LIHEAP plan, as a supplement and/or
               alternative to its LIHEAP program, integrated and coordinated
               with its  LIHEAP program, but outside (not through, within,
               or as a part of) its LIHEAP program.  Under this criterion,
               the resource must meet at least 1 of 8 listed conditions to
               demonstrate that it is integrated and coordinated with the
               grantee's LIHEAP program.  A single leveraged resource/
               benefit cannot be counted under both criterion (ii) and
               criterion (iii)--because a single resource/benefit cannot be
               provided both through (criterion (ii)) and outside
               (criterion (iii)) the grantee's LIHEAP program. For
               resources/benefits to be countable under criterion (iii) of
               section 96.87(d)(2), the grantee's FY 1998 LIHEAP plan must
               identify and describe the resources/benefits, their
               source(s), and their integration/coordination with the
               LIHEAP program. Any amendments to FY 1998 LIHEAP plans
               to incorporate leveraged resources/benefits that were
               provided to low income households in FY 1998 must be made
               by September 30, 1998, the last day of the base period;
               these amendments must be post-marked or hand-delivered to
               OCS by this date.

               Submission of Leveraging Reports

               Grantees should submit the original of the completed LIHEAP
               Leveraging Report to OCS.  We do not need additional copies.
               Grantees should be sure to keep copies for their own files.  The
               completed forms should be sent to:

                    Janet M. Fox, Director
                    Division of Energy Assistance
                    Office of Community Services, ACF, HHS
                    370 L'Enfant Promenade, S.W.
                    Washington, D.C.  20447

               HHS may require additional documentation and/or clarification
               as it determines necessary to  verify information in a
               grantee's Leveraging Report, to determine whether a leveraged
               resource is countable, and/or to determine the net valuation
               of a resource.  If that is the case, your LIHEAP program
               analyst will contact you during the review of the leveraging
               reports to request that information.

               Amendments to FY 1998 Plans

               Grantees must submit any FY 1998 LIHEAP plan amendments
               containing descriptions of leveraging activities or revised
               descriptions of existing leveraging activities to OCS by
               September 30, 1998.  These amendments should address
               questions raised by LIHEAP staff during our review of FY 1997
               leveraging reports.  Grantees may wish to amend their FY
               1998 LIHEAP plans to make revisions in the description of
               leveraged resources to meet requirements of section 96.87(d)
               (2)(iii)(A-H) for those resources that were integrated and
               coordinated with the LIHEAP program.  Please remember that,
               under these criteria, the plan must include a description of
               each resource, its source, and a description of how it is
               integrated and coordinated with LIHEAP.

INQUIRIES:     Jan Fox (202-401-9351), Linda Hill (202-401-
               9356), Ann Bowker (202-401-5308), or your
               LIHEAP program analyst.

                    Janet M. Fox, Director
                    Division of Energy Assistance
                    Office of Community Services, ACF, HHS
                    370 L'Enfant Promenade, S.W.
                    Washington, D.C.  20447

                         Telephone:  (202) 401-9351
                         Fax:  (202) 401-5718
                         E-mail:  jmfox@acf.dhhs.gov

ATTACHMENTS:   LIHEAP Leveraging Report Form, Parts 1 and 2
               (Form No. ACF-119, OMB Clearance No. 0970-
               0121, expiration date February 28, 2000);

               Sample Leveraging Summary Worksheet; and

               Instructions for Completing LIHEAP Leveraging
               Report Forms.




               _____________/s_____________
               Janet M. Fox
               Director
               Division of Energy Assistance
               Office of Community Services

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