SECTION 2: Funding Process and Requirements

2.1  Summary

The Emergency Solutions Grants (ESG) Program was created when the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act was signed into law on May 20, 2009. The Hearth Act amended and reauthorized the McKinney-Vento Homeless Assistance Act and included major revisions to the existing Emergency Shelter Grant Program.

The new Emergency Solutions Grant Program is designed to identify sheltered and unsheltered homeless persons, as well as those at risk of homelessness, and provide the services necessary to help those persons to quickly regain stability in permanent housing after experiencing a housing crisis and/or homelessness.

2.2  Grant Awards and Spending Requirements

The amount of ESG allocation received from the U.S. Department of Housing and Urban Development (HUD) varies each year and is awarded to the State via an annual Award Notice. Annually IDHS notifies each Continuum of Care (CoC) Representative of the award amount for their region based on a formula utilizing local population and other poverty statistics.

The CoC Representative will distribute an annual "Provider Funding Packet" to potential subrecipients in the CoC's jurisdiction. Each subrecipient must complete and return the Provider Funding Packet, along with the required documentation, to the CoC Representative for review/ approval. IDHS ESG Management has the right to deny funding considerations if all appropriate documentation is not submitted or not submitted in a timely fashion. The CoC Representative submits to IDHS a list of recommended agencies and their budgets for the total of the award in the CoC's jurisdiction.

In addition to the "Provider Funding Packet", recommended agencies must complete the IDHS GATA contracting process, e.g., registration, pre-qualifications, Uniform GATA application, Internal Control Questionnaire (ICQ), Programmatic Risk Assessment (PRA), Indirect Cost Rate, CSA budgets, IDHS Agreement (signed signature page), etc. Instructions and training for IDHS GATA contracting process will be provided each year.

IDHS reviews the Provider Funding Packets and all GATA required documentation to make final awards decisions and final funding amounts. Contracts are between the agencies and IDHS. The CoC does not contract with the State unless they are delivering services directly.

The State of Illinois - Department of Human Services (IDHS) grant period for the Emergency Solutions Grants Program is 12 months [30 ILCS 708/25 (2), (3)]; any funds not expended by the end of contract period will be rolled over into the next fiscal year at the discretion of IDHS. IDHS reserves the right to recapture and/or reallocate ESG funds when agencies do not meet the requirements under the:

  1. Contractual Agreement
  2. Policies and Procedures Manual (this document)
  3. Subsequent instruction, guidance, and Memos from IDHS and HUD, and
  4. ESG regulations outlined in 24 CFR Part 576, and 30 ILCS 708/80 (Supersession) or 30 ILCS 708/997 (Sec. 1.31) (Severability)

Top of Page

2.2a  Grant Award & Expenditures

  1. The minimum ESG award is $25,000.00.
  2. Subrecipients MUST EXPEND 100% of their funds and match within the grant period established by IDHS.
  3. IDHS and HUD will closely track subrecipient expenditures to meet requirements and allow for reallocation if subrecipients have not spent their funds and match within the grant period.
  4. IDHS reserves the right to review a subrecipient's balance of funds quarterly and re-allocate unused funds. Any ESG funds that become available to IDHS because of a sanction will be made available (as soon as practicable) to other private non-profit organizations or units of general local government located in the state for use within specific time periods.

Top of Page

2.2b  Monitoring of Subrecipients

The State of Illinois will monitor agencies in accordance with requirements 24 CFR Parts 91 and 576. Monitoring may include any or all of the following, and each agency will be monitored in some form at least annually.

  1. Fiscal review performed by Illinois Department of Human Services CSSCs (Community Support Services Consultants)
  2. Remote (desk review) of fiscal/audit reports performed by IDHS Office of Contract Administration (OCA) staff
  3. Administrative/program review performed by Emergency Solutions Grant staff (Public Service Administrator/Social Service Program Planner)

Agencies will be notified at least 30 days in advance of any monitoring which requires agency participation. Monitoring may be conducted on a scheduled basis and/or randomly if needed to ensure the successful administration of the ESG program. ESG staff may also elect to perform additional monitoring based on current performance (timely reporting, rate of spending, turnover of key agency staff, etc.).

In addition to monitoring the agency contracted with IDHS to administer the ESG program, any and all Subrecipients of funds may be subject to the monitoring enumerated above. The following also apply to program Subrecipients:

  • Subrecipients must make all programmatic and financial records available for review by the monitoring entity.
  • Monitoring of subrecipients may be conducted by any of the following in order to determine compliance with the compliance of the ESG program: the State of Illinois, HUD's Office of Community Planning and Development, HUD's Office of Special Needs Assistance Programs, HUD's Office of the Inspector General, HUD's Office of Fair Housing and Equal Opportunity, a contractor hired on behalf of the State of Illinois for the purposes of auditing programs funded through the State, or another authorized state or federal agency.
  • In lieu of an on-site review, the State of Illinois (IDHS, ESG, or OCA) may request copies of supporting documentation in order to conduct a Desk Audit review of a subrecipient and/or request access to HMIS for review of documentation that has been uploaded to the system.

When performing a monitoring visit or desk review, the State of Illinois will rely primarily on information obtained from the records and reports from the recipient and, when appropriate, its subrecipients. Monitoring staff may review information onsite at the agency, submitted audit reports, client records, as well as information that has been entered into systems such as IDIS and HMIS. Where applicable, monitoring staff may also consider relevant information pertaining to the recipient's performance gained from outside sources such as citizen comments, complaint determinations, and litigation. Monitoring of information from these or other outside sources may be conducted with or without prior notice to the recipient.

If monitoring staff makes a preliminary determination that a contracted agency or one of its subrecipients has not complied with an ESG program requirement, the State of Illinois will give notice of this determination. The agency or subrecipient will be given an opportunity to demonstrate, within the time prescribed by the State of Illinois and based on substantial facts and data, that the recipient is again in compliance with Emergency Solutions Grant (ESG) requirements.

As a result of program non-compliance, the State of Illinois may change the method of payment for a provider agency. An agency may be required to obtain approval from ESG staff (PSA, SSPP) prior to drawing down Emergency Solutions Grant (ESG) funds. To obtain approval, the agency may be required to manually submit its payment request along with supporting documentation to ESG staff. ESG staff (PSA, SSPP) will review the payment request and documentation; approval for payment will be granted if the documentation shows that the funds will be expended on eligible activities in accordance with all ESG program requirements.

Top of Page

2.2c  Remedial Actions and Sanctions

If an ESG provider agency inadequately demonstrates to the State of Illinois' satisfaction that its activities were non-compliant according to ESG program requirements, one or more remedial actions or sanctions will be taken.

Remedial actions and sanctions for a failure to meet an ESG program requirement will be designed to prevent a continuation of the deficiency; to mitigate, to the extent possible, its adverse effects or consequences; and prevent its recurrence.

  1. The State of Illinois may instruct the recipient to submit and comply with proposals for action to correct, mitigate, and prevent noncompliance with ESG requirements, including:
    • Preparing and following a schedule of actions for carrying out activities affected by the noncompliance. These may include schedules, timetables, and milestones necessary to implement the affected activities;
    • Establishing and following a management plan that assigns responsibilities for carrying out the remedial actions;
    • Canceling or revising activities likely to be affected by the noncompliance before expending ESG funds for the activities;
    • Reprogramming ESG funds that have not yet been expended from affected activities to other eligible activities;
    • Suspending disbursement of ESG funds for some or all activities;
    • Reducing or terminating the remaining grant of a subrecipient and reallocating those funds to other subrecipients; and
    • Making matching contributions before or as draws are made from the recipient's ESG grant.
  2. The State of Illinois may change the method of payment to a reimbursement basis.
  3. The State of Illinois may suspend payments to the extent that it deems necessary to preclude the further expenditure of funds for affected activities.
  4. The State of Illinois may remove the Agency from participation in reallocations of funds.
  5. The State of Illinois may deny matching credit for all or part of the cost of the affected activities and require the Agency to make further matching contributions to make up for the contribution determined to be ineligible.
  6. The State of Illinois may require the recipient to reimburse its line of credit in an amount equal to the funds used for the affected activities.
  7. The State of Illinois may reduce or terminate the remaining grant of an Agency and reallocate those funds back to the CoC to disburse to another Agency.
  8. The State of Illinois may place conditions a future grant.
  9. The State of Illinois may take other remedies that are legally available.

Top of Page

2.3  Eligible Subrecipients

The following entities are eligible to submit an application for funding under ESG:

  1. Units of Local Government
  2. Private Non-Profit Organizations
  3. Faith-Based Non-Profit Organizations (cannot be funded for inherently religious activities, cannot proselytize, or discriminate based on participant's faith)

Note: The definition of an "Emergency Shelter" is not restricted to those facilities that provide overnight sleeping accommodations. As a result, day centers and drop-in centers are also eligible to receive ESG funds for eligible activities.

Top of Page

2.4  Initial Budget and Modifications to Budget/Match

The CoC Representative will forward the recommended budget amounts to their respective subrecipient and to IDHS ESG Manager. With the subrecipient GATA application submission to IDHS ESG, the subrecipient must submit their CoC approved Budget Request form. At any time that this budget needs to be modified, a Modification Request form must be approved by the CoC Representative and then submitted to IDHS ESG Manager for approval and processing. IDHS ESG strongly encourages limited modifications to budgets and time must be allotted to process. IDHS reserves the right to approve or deny Modification Requests.

 Top of Page

2.5  Match Requirements

An award of ESG funding requires a match with an equal amount of cash or in-kind funds to supplement the ESG program. Matching contributions may be obtained from any source, including any Federal source other than the ESG program, as well as state, local and private sources. However, the following requirements apply to matching contributions from a Federal source of funds:

  1. The State and the agency must ensure the laws governing any funds to be used as matching contributions do not prohibit those funds from being used to match ESG funds.
  2. If ESG funds are used to satisfy the matching requirements of another Federal program then funding from that program may not be used to satisfy the matching requirements under this section.
  3. The matching contributions must meet all requirements that apply to the ESG program.
  4. Matching funds must be identified during the annual IDHS contracting process via budgetary information.
  5. In order to count towards the required match for the State's fiscal year grant, cash contributions must be expended within the grant deadline.
  6. Noncash contributions must be made within the same period.
  7. Contributions used to match a previous ESG grant may not be used to match a subsequent ESG grant.
  8. Contributions that have been or will be counted as satisfying a matching requirement of another Federal grant or award may not count as satisfying the matching requirement of the ESG allocation.

Eligible types of matching contributions may be met by one or both of the following:

  1. Cash contributions: Cash expended for allowable costs under the ESG program, may be considered.
  2. Non-cash contributions: The value of any real property, equipment, goods, or services contributed to the agency's ESG program, provided that if the agency had to pay for them with grant funds, the costs would have been allowable. Noncash contributions may also include the purchase value of any donated building.
    1. Calculating the amount of noncash contributions: (See below for specific instructions for units of local governments and non-profit subrecipients)
      • To determine the value of any donated material or building, or of any lease, the subrecipient must use a method reasonably calculated to establish the fair market value.
      • Services provided by individuals must be valued at $10 dollars per hour, except when volunteers perform duties that are professional in nature. In that case, the rate is the hourly rate that the person charges as a professional. For example: if an attorney volunteers his/her time to provide pro bono legal services to the agency and his/her billable rate is $150/hour then the agency may claim $150/hour for that volunteer.
    2. Some noncash contributions are real property, equipment, goods, or services that, if the subrecipient had to pay for them with grant funds, the payments would have been indirect costs. Matching credit for these contributions must be given only if the subrecipient has established, along with its regular indirect cost rate, a special rate for allocating to individual projects or programs the value of those contributions.
  3. Costs paid by program income: Costs paid by program income shall count toward meeting the State and/or agency's matching requirements, provided the costs are eligible ESG costs that supplement the agency's current ESG program.

Instructions for Units of General Local Government:

In calculating the amount of matching funds, the time contributed by volunteers shall be determined at the rate consistent with those ordinarily paid for similar work in the subrecipient's organization. If the subrecipient does not have employees performing similar work, the rates will be consistent with those ordinarily paid by other employers for similar work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation. The Grantee must maintain evidence of how the rate determination was calculated and be available for review upon request by IDHS. The grantee will determine the value of any donated material or building, or of any lease, using a method reasonably calculated to establish a fair market value. For additional information, refer to 24 CFR 85.24.

Instructions for Non-Profit Subrecipients:

Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services shall be consistent with those paid for similar work in the subrecipient's organization. In those instances, in which the required skills are not found in the subrecipient's organization, rates shall be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.

Maintenance of Effort Requirement:

If a subrecipient is a unit of general local government, ESG funds cannot be used to replace funds the local government provided for street outreach and emergency shelter service during the immediately preceding 12-month period unless HUD determines that the unit of general local government is in a severe financial deficit.

Top of Page