< Back to Search

LIHEAP IM 2010-10 Awards of Leveraging Incentive Grants for FY 2010

Published: June 4, 2010
Low Income Home Energy Assistance Program (LIHEAP)
Guidance, Policies, Procedures, Information Memorandums (IM)




SUBJECT: Awards of FY 2010 LIHEAP Leveraging Incentive Grants

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.) 45 CFR 96.87 in the Department of Health and Human Services block grant regulations.

PURPOSE: To advise grantees of FY 2010 leveraging incentive grants to be awarded based on countable leveraging activities carried out during FY 2008 or FY 2009.

BACKGROUND: The Augustus F. Hawkins Human Services Reauthorization Act of 1990 (Public Law 101-501) amended the LIHEAP statute to establish a leveraging incentive program to reward grantees under the Low Income Home Energy Assistance Program (LIHEAP) that have acquired non-Federal home energy resources for low-income households. Leveraging incentive funds are awarded to those grantees that use their own or other non-Federal resources to expand the effect of the Federal LIHEAP dollars. Leveraging activities that took place in one fiscal year will be used to determine leveraging incentive grant awards in the following fiscal year. For example, FY 2010 leveraging incentive awards are allocated to grantees based on countable leveraged resources that were provided to low income households in FY 2009. (Note that because leveraging awards were not issued in FY 2008, we allowed grantees the option this year to claim either FY 2008 or FY 2009 activities.)

The Department of Health and Human Services (HHS) issued final implementing regulations for the leveraging incentive program on May 1, 1995 (60 FR 21332). Leveraging requirements in the regulations are based closely on the leveraging requirements in section 2607A of the Low Income Home Energy Assistance Act.

Grantees desiring leveraging incentive funds must submit an application each year — the LIHEAP Leveraging Report — that delineates the amount and types of leveraging activities they carried out during the base period. HHS then determines whether the reported activities meet the requirements of the statute and regulations, and, therefore, are countable under the program for the purpose of determining allocations of the incentive funds. In general, we give grantees the benefit of the doubt where we can.

CONTENT: The Consolidated Appropriations Act, 2010 (P.L. 111-117), signed on December 16, 2009, included funding for LIHEAP in FY 2010. The conference report on that law provides that, of the amount appropriated for LIHEAP for FY 2010, $27 million should be set aside for leveraging incentive grant awards. Of this amount, the 1994 amendments to the LIHEAP statute (Public Law 103-252) provide that up to 25% may be set aside for the Residential Energy Assistance Challenge Program (REACH). The Department set aside $2,457,580 for REACH, leaving $24,542,420 for leveraging awards.

Applications for FY 2010 Leveraging Funds

We received applications for FY 2010 incentive awards from 36 States, 22 Tribes or Tribal organizations, and 1 Territory. These 59 applications included claims for 638 separate leveraging resources/benefits that took place in FY 2008 or FY 2009 with a gross claimed value totaling $2,618,015,377. The net value of the claimed resources is $2,617,764,443, after deducting $2,612,700 for: (1) the grantees' own funds used to identify, develop and demonstrate the activities; (2) costs or charges to low income households to participate in the activities; and (3) LIHEAP funds used to identify, develop, and demonstrate the activities (limited to the higher of $35,000 or 0.08% of a grantee's regular allotment for State grantees, or to the higher of $100 or 2.0% of the allotment for Indian Tribes/tribal organizations and territories).

After review by HHS, the claimed value of a number of resources was eliminated or reduced because part or all of the resource did not meet necessary requirements for countability. We also made a number of adjustments necessitated by mathematical errors and/or revised information received from grantees.

Overall, we reduced the claimed value of 6 resources because they were not countable in part or there were errors in calculations. After making these adjustments, we approved 632 resources in whole or in part for 59 grantees (36 States, 22 Tribes, and 1 Territory), for a gross value of $2,605,651,753 and a net value of $2,603,039,053 after subtracting offsetting costs of $2,612,700. Attachment 2 shows the number and value of resources claimed by each applicant, the amount of any adjustments to those numbers and values, and the final approved number and value of countable resources as determined by HHS.

Allocation of Leveraging Incentive Funds

Using the final values of leveraging activities approved for each grantee, we calculated leveraging grant award allocations based upon a formula that is included in Section 96.87(c)(1) of the LIHEAP regulations (45 CFR 96.87(c)(1)), as published in a final rule in the Federal Register on May 1, 1995 (60 FR 21322). (See page 21364 of the regulation and pages 21351-56 of the preamble for further detail.)

The formula provides that one-half of the funds, or $12,271,210 based on total available funds of $24,542,420, is to be distributed based on the amount of leveraging activities each grantee carries out as a proportion of the amount of its regular LIHEAP grant, taking into account the amount of leveraging activities carried out by all grantees as a proportion of their regular grants. Because the leveraging activities took place in FY 2009 (or FY 2008, at the Grantee's option), we used allocations for FY 2009 in calculating this portion of the formula. We included regular block grant allotments and contingency funds allocated to leveraging applicants in FY 2009.

The second half of the funds is to be distributed based on the amount of leveraging activities carried out by each grantee as a proportion of the total amount of leveraging activities carried out by all grantees. The amounts derived under the two parts of the formula are then added together to determine the final grant amount, except that no grantee may receive more than (1) 12% of the leveraging incentive funds available, or (2) the lesser of the amount of its regular grant (including any contingency and/or realloted funds or twice the amount it leveraged.

The prohibition against receiving more than 12% of the available leveraging incentive funds affected two State grantees this year (California and Pennsylvania) limiting their grant awards to $2,945,090.

The prohibition against receiving more in incentive grant funds than the lesser of twice the amount leveraged or the amount of the regular block grant funds affected 13 of the Tribal applicants and 1 Territory this year. The Tribes in general do very well under our formula, in most cases receiving much more in return for each leveraging dollar invested than the States.

We redistributed the "excess funds" from the 2 States, 13 Tribes, and 1 Territory on a proportionate basis to the other grantees. Attachment 1 shows our calculations, with the last column showing the amount of the actual leveraging incentive grant award for each applicant.

Allowable Uses of Leveraging Incentive Funds

Leveraging incentive grant awards are being made to each grantee in the amount shown in the final column of Attachment 1, and will be available for drawdown shortly. They may be obligated for eligible activities in FY 2010 and/or FY 2011. Grantees are reminded that the leveraging incentive funds must be used to maintain or increase benefits to low income households as a part of the grantee's LIHEAP program. The incentive awards may not be used for costs of administration and planning, but they may be counted in the base for calculating the grantee's maximum planning and administrative costs (but these costs must be paid from other funds, such as regular block grant funds). Leveraging incentive grants for FY 2010 must be obligated by grantees no later than September 30, 2011, or the funds will revert to the Federal government. The leveraging incentive funds are not subject to the 10% carryover limit for regular block grant funds, and may not be added to the base on which the carryover limit for regular funds is calculated. The leveraging incentive funds also are not subject to the 15% limit on use of funds for weatherization activities, and may not be added to the base on which the weatherization limit for regular funds is calculated. Consistent with the block grant philosophy, grantees are the primary interpreters in determining what constitutes an "obligation" under their own financial laws and procedures.

Next Year's Applications for Leveraging Funds We would like to remind all grantees that the model plan application for regular LIHEAP block grant funding includes a section to report leveraging activities that are coordinated with LIHEAP. You should include in your FY 2010 LIHEAP plan a description of your leveraging activities that are integrated and coordinated with the LIHEAP program. This will be necessary for these activities to be counted for leveraging funds awarded in FY 2011. LIHEAP Leveraging Reports on leveraging activities carried out in FY 2010 are due by November 30, 2010 in order to qualify for FY 2011 leveraging incentive grant funds. Late applications will not be considered. Amendments to FY 2010 plans in order to incorporate descriptions of FY 2010 leveraging activities must be submitted no later than September 30, 2010.


(1) Calculations of FY 2010 leveraging incentive grant awards, by grantee

(2) Listing of grantees submitting Leveraging Report Forms on FY 2008 or FY 2009 activities to qualify for FY 2010 leveraging incentive grant awards, including number and value of resources claimed, adjustments to those claims made by HHS, and final approved number and value of resources

INQUIRIES TO: Nick St. Angelo, 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) 401-5661
                        E-mail: nstangelo@acf.hhs.gov


Nick St.Angelo
Division of Energy Assistance
Office of Community Services