Mich. Admin. Code R. § R 125.196

Rule 196. (1) The following provisions regarding reporting apply:
(a) All recipients of program funds shall report back to the authority on a semiannual
basis about their use of program funds in a manner provided by authority staff. The
authority staff shall collect information from recipients to establish that the program funds
are being spent correctly and to measure the results or performance of its spending against
the objectives of the Michigan housing and community development program.
(b) The authority staff shall establish reporting forms that must be submitted by the
recipients on a semiannual basis. These reports must include both a performance
monitoring form and a financial monitoring form.
(c) The performance monitoring form must be signed by the chief executive officer or
equivalent of the funding recipient and analyze the management performance of the
recipient, specifically including a description of the following items:
(i) What was done with the program funds and whether it is consistent with the goals
and strategies outlined in the application.
(ii) How well program activities were performed, including a discussion of how success
or failure is measured.
(iii) What populations have benefited from the distribution of program funds, including
details on results.
(d) The financial monitoring form must be signed by the chief financial officer, or
equivalent, of the recipient and analyze the financial performance of the recipient. Program
funds must be used in an efficient, effective, and appropriate manner, consistent with the
Michigan housing and community development program objectives and priorities,
including community needs. Program funds must also be appropriately and properly
accounted for with documentation that adequate safeguards have been instituted by the
recipient to ensure that there is no misuse of program funds.
(2) The following provisions apply to Michigan housing and community development
program periods and extensions:
(a) The initial program period for any loan or grant awarded under the program is 2 years
after the date of the award of program funds. All activities related to the use of program
funds must be completed within this 2-year time frame. Any program money outstanding
on the date that is 2 years after the date of the award is subject to the recapture provisions
of this rule and must be immediately repaid to the authority.
(b) Recipients shall maintain compliance with each of its contracts and agreements with
the authority.
(c) Recipients shall comply with any restrictions that are stated in and enforced through
a regulatory agreement, grant agreement, or other legal documents associated with any
award of program funds. These restrictions may include, but are not limited to, the
following, for a term of years:

(i) Rent restrictions.
(ii) Record keeping and reporting.
(iii) Income targeting of tenants.
(d) Authority staff shall monitor compliance with project restrictions and any other
covenants by recipients in any Michigan housing and community development
program fund agreement. An annual compliance fee of up to $100.00 per unit may be
charged for this review.
(3) Recapture of program funds must be accomplished as follows:
(a) The authority has the power to recapture or de-obligate program funds and program
funding awards in certain circumstances. The power to recapture or de-obligate program
funds may apply to entire awards or portions of awards. Recaptured or de-obligated
program funds must be re-deposited in the fund and used to make future awards in the
current and next applicable program year or program funding round.
(b) The following reasons may justify the de-obligation or recapture of program funds:
(i) Inability of the applicant or recipient to effectively carry out the program activity and
obligate the program funds within the initial program period 2-year timeline.
(ii) Inability of the applicant or recipient to make drawdowns of program funds on a
regular and timely basis, such that the authority has grounds to question the overall viability
of the project.
(iii) Substantial, significant, and lengthy noncompliance with the act, rules, NOFA, RFP,
application, biennial plan, allocation plan, allocation formula, program funding agreement,
applicable federal requirements, or other documentation or requirements related to any
award. In making the decision on de-obligation or recapture in this instance, the authority
staff shall consider whether or not the non-compliance is due to factors beyond the
applicant's or recipient's control.
(iv) If the total cost of the anticipated program activity is less than the total cost
anticipated in the application or other documentation provided by the applicant or recipient,
or both, the authority may de-obligate the portion of the award exceeding the actual costs
of the program activity.
(v) At the end of the initial program period and any approved extension of that period,
the unspent funds remaining in the program account, project account, or other accounts
related to the program activity must be recaptured and returned to the program fund.
(vi) The applicant or recipient, or both, voluntarily returns the program funds to the
authority and ceases all program activity and reporting upon the return of program funds.
(vii) Other reasons justifying recapture or de-obligation approved by the authority, upon
notice to the applicant or recipient, or both, of both the authority's consideration of a
recapture or obligation decision and notice that the authority has approved a resolution or
motion evidencing its decision to recapture or de-obligate the program funds.

History: 2008 AACS; 2009 AACS; 2023 AACS; 2026 MR 11, Eff. June 8, 2026.