CSBG IM #62 Funding Increase and Eligible Entities FY 2002

TO:

State Community Services Block Grant Program Officials and Community Action Agencies

SUBJECT:

FY 2002 CSBG Funding Increase and Eligible Entities

PURPOSE:

This Information Memorandum SUPERCEDES IM # 56 dated January 17, 2002 AND IM #59 dated January 30, 2002. The percentage increase calculation was in error. The purpose of this IM is to transmit corrected calculations and to clarify the FY 2002 funding requirements outlined in the FY 2002 Appropriations Act, H.R. 3061,with respect to the distribution of the FY 2002 increase.

DISCUSSION:

In the past, not all States distributed the annual increases in CSBG allocations proportionately to all of the CSBG funded eligible entities within the State. Many States use different funding formulae. In order to ensure that all CSBG eligible entities receive their proportionate share of the CSBG funding increase, the FY 2002 Appropriations Act (H.R. 3061) contained language which directs States to provide all eligible entities currently in good standing in the Community Services Block Grant Program an increase in funding proportionate to the increase received by the State.

The language contained in H.R. 3061 provides, "That to the extent Community Services Block Grant funds are distributed as grant funds by a State to an eligible entity as provided under the Act, and have not been expended by such entity, they shall remain with such entity for carryover into the next fiscal year for expenditure by such entity consistent with program purposes: Provided further, That all eligible entities currently in good standing in the Community Services Block Grant program shall receive an increase in funding proportionate to the increase provided in this Act for the Community Services Block Grant." Proportionate
Share means the proportion (percentage) of the State's CSBG funding that the entity received in the prior fiscal year. For example, if an eligible entity is presently receiving ten percent of the State's 90 percent CSBG funds awarded to its grantees, then the eligible entity will be entitled to receive its proportionate share (10%) of the State's (90%) CSBG funding increase in 2002.

In addition, the Senate Appropriations Committee Report makes clear that the Office of Community Services is charged with enforcing the new language. For your use, attached is a revised chart that reflects the corrected percentage increase in CSBG funding for FY 2002 over FY 2001. Do notice that the language in (H.R. 3061) speaks to the use of 90 percent of the increase. It is silent about use of the increase for administrative costs and discretionary activities.

A decision by a State not to provide a proportionate share increase in funding to an eligible entity will be considered as a reduction of funding under Sections 575(b)(8) and 678C of the CSBG Act and subject to the notice and hearing requirements set forth therein.

INQUIRIES TO:

If you have questions, feel free to contact the Program Specialist for your respective State

Margaret Washnitzer, D.S.W.
Director
Division of State Assistance
Office of Community Services