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us-tn/manual/thda/liheap — Axiom

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Table of Contents Disclaimer ................................................................................................................ 1 Table of Contents .................................................................................................... 2–4 Chapter 1 – General Program Requirements 1.1 Introduction ........................................................................................................ 4-6 1.2 Definitions .......................................................................................................... 7–9 1.3 Weatherization ................................................................................................... 10 1.4 Distribution of Funds ......................................................................................... 10–12 Chapter 2 – Application Processing and Eligibility 2.1 Application Intake and Review Process .......................................................... 12–14 2.1.1 Pre-Application Process ............................................................................. 14–15 2.2 Accommodations .............................................................................................. 15 2.3 Acceptable Forms of Verification for Veteran or Active Military .................... 15 2.4 Citizenship/Qualified Alien Verification .......................................................... 15–17 2.5 Documentation Required for U.S. Citizens and Qualified Aliens .................. 17–19 2.6 Timeframes for Determining Eligibility ........................................................... 19–20 2.7 LIHEAP Online Applications ............................................................................. 20 2.8 Pre-Paid Accounts ............................................................................................ 20 2.9 Crisis Funding ................................................................................................... 20–22 2.10 Family Size and Percentage of Poverty Eligibility ........................................ 23 2.11 Depletion of Funding ..................................................................................... 23–24 2.12 Supervisory Review of Client Applications ................................................... 24-25 2.13 Income ........................................................................................................... 25–27 2.14 Calculation of Income ................................................................................... 27-28 2.15 Calculation of Unemployment Income ........................................................ 28-29 2.16 Acceptable Forms of Verification ................................................................. 29-30 2.17 Calculation of Energy Burden ....................................................................... 30–31 2.18 Public Housing and Section 8 Applicants ................................................... 31 2.19 Annual Energy Usage Documentation ......................................................... 31–32 2.20 Priority of Households and Benefit Matrix .................................................. 32–33 2.21 Natural Disasters and Emergencies ............................................................ 33–35 2.22 Hearing Process ............................................................................................ 35–37 2.23 Safe at Home Program ................................................................................. 37–38

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Chapter 3 – Subgrantee Administrative Responsibility 3.1 Documentation and Record Keeping Processes ........................................... 39 3.2 Confidentiality of Client Information ............................................................... 39 3.3 Conflict of Interest ........................................................................................... 39-40 3.4 Preventing Fraud, Waste, and Abuse ............................................................. 40 Chapter 4 – Outreach 4.1 Outreach General Information .......................................................................... 41 4.2 Outreach Categories and Definitions ............................................................... 41–42 4.3 Subgrantee Outreach ........................................................................................ 42–43 4.4 Allowable Outreach ........................................................................................... 43 Chapter 5 – Assurance 16 5.1 Assurance 16 General Information .................................................................. 44 5.2 Activities to Support Assurance 16 .................................................................. 44–45 5.3 Allowable Energy Conservation Expenditures .................................................. 45–46 5.4 Tracking and Documentation Requirements ................................................... 46 Chapter 6 – Utility Vendors and Vendor Agreement Requirements 6.1 Suspension and Debarment .............................................................................. 47 6.2 Vendor Agreements ............................................................................................ 47 6.3 Performance Measurement ............................................................................... 47 6.4 Vendor Refunds .................................................................................................. 48 6.5 Credits to Pay ...................................................................................................... 48 Chapter 7 – Fiscal Accountability 7.1 Allocation Levels .................................................................................................. 49 7.2 Spend Down Requirements ................................................................................ 49–51 7.3 Contract and Amendments ................................................................................. 51 7.4 Budget and Budget Amendments ...................................................................... 51–52 7.5 Expenditure Caps and Minimums ...................................................................... 52 7.6 Allowable Administrative Expenditures .............................................................. 52–53 7.7 Allowable Direct Program Support Expenditures .............................................. 53–54 7.8 Allowable Outreach Expenditures (Assurance 3) .............................................. 54–55 7.9 Allowable Energy Conservation Expenditures (Assurance 16) ......................... 55 7.10 Reimbursement of Expenses ........................................................................... 55–56

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7.11 Equipment Purchases ....................................................................................... 56 7.12 Invoice Paperwork Reduction Process ............................................................. 56–57 7.13 Quarterly Submission of Invoices/Pay Request .............................................. 58 7.14 Frequency ........................................................................................................... 57–58 7.15 Documentation ................................................................................................... 58 7.16 Closeout and Reconciliation Reports ................................................................ 58 Chapter 8 – Monitoring 8.1 Training and Technical Assistance ...................................................................... 60 8.2 Title VI – Civil Rights Training ............................................................................... 60 8.3 Monitoring ............................................................................................................ 60–62 Chapter 9 – LIHEAP Advisory Committee (LAC) 9.1 Name and Purpose .................................................................................................. 62 9.2 Membership ............................................................................................................... 62–63 9.3 Member Responsibilities........................................................................................... 63 9.4 Terms and Elections ............................................................................................ 63 9.5 Selection Criteria ....................................................................................................... 63 9.6 Coordination and Oversight....................................................................................... 63–61 9.7 Leadership ............................................................................................................... 64 9.8 Meetings ................................................................................................................. 64 9.9 Recommendations and Reports.............................................................................. 64 9.10 Amendments........................................................................................................... 64 9.11 Adoption.......................................................................................................... 64

Chapter 10 – SmartSimple System Requirements and Reporting 10.1 SmartSimple Online Application .......................................................................... 64–65 10.2 Reporting ............................................................................................................... 64 10.3 Resources .............................................................................................................. 65 LIHEAP State Contact Information .............................................................................. 65–66 Appendix ....................................................................................................................... 66

Chapter 1 General Program Requirements 1.1 Program Overview The Low Income Home Energy Assistance Program (LIHEAP) is a federally funded program administered by the Tennessee Housing Development Agency (THDA). Funding is

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provided by the U.S. Department of Health and Human Services (HHS) under the LIHEAP statute: Title XXVI of the Omnibus Budget Reconciliation Act of 1981, as amended (Public Law 97-35). LIHEAP is designed to assist qualified low-income households with their immediate home energy needs, including heating and cooling costs. The program is intended to provide one-time assistance to offset heating and cooling costs, especially for those with high energy expenses relative to their income. LIHEAP is not meant to pay for all of the energy costs for the year, the season, or even the month.

An applicant can get help only with the main heating source. For example, if the applicant heats the home with gas, they might get help with the gas bill but not the electric bill. The program prioritizes services for households that: • Have the highest energy burden (the percentage of income spent on energy), • Include vulnerable individuals such as older adults (60+), individuals with disabilities, young children (5 years old and under), active-duty military members, or veterans, • Have the lowest household income with the highest energy burden. Program Components Tennessee’s LIHEAP program includes the following components: • Regular Energy Assistance – Helps eligible households with a supplement to their annual energy costs. • Crisis Energy Assistance – Provides expedited assistance to households facing energy-related emergencies within 48 hours, and life-threatening energy-related emergencies within 18 hours. • Weatherization Assistance (LIHEAP Wx) – THDA may allocate a portion of LIHEAP funds for home energy conservation measures. These services are covered under a separate weatherization policy manual and contract. • Assurance 16 Services –Assurance 16 is intended to develop information and energy education materials to LIHEAP clients over an extended period of time. Energy education can include, but is not limited to, providing resources to clients to aid them in communicating more effectively with energy vendors in order to maintain service, providing information on reducing energy usage and obtain energy efficiency services, and working with clients to improve financial management skills that help clients proactively manage energy bills.

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1.2 – Key Definitions Active Account - A current utility account that reflects billing and usage, preferably with 12 months of history, if available.

Active Duty - Full-time service in any branch of the U.S. Armed Forces, including Reserve or National Guard members on Active Guard Reserve (AGR) status.

Administrative Fair Hearing - A formal appeal process available to any applicant whose application is denied or delayed (excluding delays caused by exhausted funds), or any client dissatisfied with the service provided.

Advocacy - Efforts made by subgrantees to support LIHEAP applicants, including collaborating with service providers and vendors for utility needs.

Annual Average - The average of all energy usage (electric, gas, propane, etc.) preferably over a 12-month period or the number of months available, used to calculate the household's energy burden.

Applicant - The individual who submits and certifies the LIHEAP application on behalf of the household.

Child - Any household member or person under the age of 18.

Child Emancipated - In Tennessee, a child can be legally emancipated either through marriage or by court order. Emancipation means a minor is freed from parental control and granted certain adult rights and responsibilities. This includes the right to manage their own property and earnings, enter into contracts, and sue or be sued. However, some age restrictions, like those for voting and alcohol consumption, still apply even after emancipation. (Tennessee Legal Ages Law).

Community Education - An outreach activity conducted by agency staff to inform community members about LIHEAP services and eligibility requirements.

Community Outreach Event - A public event where LIHEAP is promoted, such as booths or mobile units, providing an opportunity for individuals to apply or learn more.

Debarment or Suspension - A status excluding individuals or entities from participating in federal assistance programs due to previous misconduct or noncompliance.

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Natural Disaster - An event such as a tornado or flood, officially declared by the Governor or President, that disrupts housing or energy access.

Mixed-Status Family – A mixed household within the context of the Low Income Home Energy Assistance Program (LIHEAP), generally refers to a household that includes both members who are eligible for LIHEAP benefits (e.g. US citizens or qualified non-citizens who meet income guidelines) and those who are not.

Outreach - Is the process of informing the public about LIHEAP. According to the LIHEAP statute, Assurance 3, such information should be: Designed to assure that eligible households, especially households with elderly individuals or disabled individuals, or both, and households with high home energy burdens, are made aware of the assistance available" under the program.

Owner - A household that owns or is buying their home and pays directly for energy costs.

Prioritization - The process of ranking applications based on vulnerability, income, and energy burden to determine service order.

Poverty Level - Income eligibility standards based on 60% of State Median Income or 150% of Federal Poverty Guidelines, as updated annually.

Public Awareness - General promotional efforts to inform the public about LIHEAP services and program availability.

Subgrantee - An organization contracted by THDA to provide direct LIHEAP services.

Supplies - Operational materials and equipment related to program delivery, such as computers, software, or printed forms.

Tenant - A resident of public or subsidized housing responsible for some portion of their energy bill, or a household that rents and is responsible for paying home energy costs, either directly or as part of rent.

Veteran - An individual with active U.S. military service who was discharged under conditions other than dishonorable.

Vulnerable Household - A household including at least one member who is elderly, disabled, a child 5 years old and under, or a veteran.

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1.3 – Weatherization LIHEAP Weatherization (LIHEAP Wx) provides energy conservation measures and minor home repairs designed to reduce heat loss, improve energy efficiency, and lower household energy costs. Typical services include: • Sealing air leaks and stopping heat loss through infiltration • Installing insulation in attics, floors, walls, and pipes • Repairing or replacing inefficient HVAC systems • Installing energy-saving improvements such as electric water heater insulation or refrigerator replacements These services are delivered in accordance with the Weatherization Assistance Program Policy and Procedures Manual, which governs in coordination with the Department of Energy’s Weatherization Assistance Program (WAP). Households eligible for LIHEAP may also qualify for weatherization. Participation in one program does not prevent participation in weatherization during the same program year, provided all requirements are met.

1.4 – Distribution of Funds and Designation of Service Areas Tennessee’s LIHEAP services are delivered by a statewide network of local administering agencies. These include: • Nine (9) Community Action Agencies (CAAs) • Four (4) local government entities • Six (6) Human Resource Agencies (HRAs), whose service areas are defined by the Tennessee General Assembly under the Human Resource Agency Act of 1973 Service areas are formally designated by appropriate public officials, and the Tennessee Housing Development Agency (THDA) honors these boundaries when determining the areas each agency will serve. Subgrantee Responsibilities The Role of the Subgrantee: Each subgrantee is responsible for ensuring the effective delivery of LIHEAP services in their service area. The primary functions the sub-grantees will be responsible for eligibility determination and verification, client education, outreach, referrals, and local coordination of the LIHEAP program. Responsibilities include:

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• Conducting outreach and energy conservation education • Accepting and reviewing applications • Determining household eligibility • Maintaining fiscal records and client case files • Processing appeals and provide customer service • Ensuring timely payment of benefits • Entering all program components for timely submission of required reports Prudent Person Principle

The policies and procedures included in the LIHEAP Manual are rules for determining eligibility, delivering benefits, and administering the program. It is impossible to foresee and give examples for all situations; therefore, staff is encouraged to use reason and apply good judgement in making decisions when addressing the specific needs and requests of a household or an unusual situation. Decision-making by staff based on the best information available, program knowledge, experience and expertise in a particular situation is referred to as the Prudent Person Principle. Prudence may also include discussing specific policy interpretation with the Sub-grantee’s monitor.

Allocation Formula LIHEAP funds are distributed to subgrantees using a data-driven allocation formula based on need. The formula incorporates: • County- and agency-level data from the U.S. Census Bureau’s Small Area Income and Poverty Estimates (SAIPE) • A rolling three-year average of the most recent SAIPE data to ensure consistency and minimize fluctuations The SAIPE program provides updated income and poverty estimates for counties and school districts nationwide and is used to allocate federal program resources equitably. More information: https://www.census.gov/programs-surveys/saipe/data/tools.html Agencies will be able to determine allocation amounts for their specific counties.

Eligibility Policies and Procedures Application Overview THDA requires a single application to determine eligibility for all components of LIHEAP. Households may receive: • One LIHEAP benefit per program year

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All Household Member Requirements: Each household member must provide at least one valid government-issued identification annually. Acceptable forms of identification include, but are not limited to: • U.S. Birth Certificate for Children 1 year old or younger • U.S. Birth Certificate, Passport, or State ID 15 ½ or younger • Safe At Home Program verification (visually verified, not copied) • State or Federal Identification Card (These are examples but not limited to: U.S. Passport, Green Card, Tribal ID, Valid Driver’s License) • Military Identification SSN Exceptions: Children under 1 are exempt from providing an SSN, but a birth certificate or mother’s copy is required. If no listed identification is available, the subgrantee must contact THDA for further guidance. Required Documentation for Energy Assistance Qualification: • A completed, signed, and dated paper or online application. • A valid email address for all applicants (applications without an email are considered incomplete and denied). • Acceptable government-issued ID for the applicant (see above). • Energy usage history for the past 12 months (or, if less than 12 months, based on the client’s duration at their address). • Gross income for all household members and net income for members receiving Social Security Income (SSI) or Social Security Disability Insurance (SSDI). • Household members claiming zero income must submit a Verification of Income & Expenses Form. Refusal to submit these results in an incomplete application, which will be denied. • Unrestricted Social Security number verification (examples listed below) for all household members, or a birth certificate, or mother’s copy, for children under 1. Completed Verification of Disability Form, signed by a medical professional, if applicable. Valid Social Security Card

Invalid Social Security Card

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Additional Documentation: Certain cases may require further documentation to confirm eligibility, especially for households with the highest energy burdens. Any agency form requiring a signature must be signed, or verbal verification can be used by the intake worker. Any unlisted documentation must be specified in the Agency-Specific Operational Plan. Application Processing: Physical applications must be date-stamped upon receipt (via mail, fax, email, drop box when provided by subgrantee, or hand delivery). When entering the application into SmartSimple, the time/date stamp must be changed to when the application was received. Client applications, submitted directly through SmartSimple, a time/date stamp will be automatically applied. The Grantee shall use SmartSimple’s online application. THDA will provide a “paper version” of the online application in the event a household needs to complete their request on paper. While paper copies of the SmartSimple application may be accepted, the Grantee is required to enter all information from the paper application into SmartSimple to ensure proper prioritization, review, and processing of assistance. Additional questions and fields may be added that are unique to the Grantee, but all components of the SmartSimple application must remain intact and a copy of the edited application must be submitted in the agency’s Operational Plan. THDA must approve it at a minimum 15 business days before the start of the new program year. Digital Applications: Scanned, electronic, or photographed signatures are acceptable. Agencies will be required to establish a dedicated email address for receiving client applications. Verbal verification is allowed for signatures and forms, with agency staff initialing the application and for date verification. Online client applications are time-stamped automatically by SmartSimple. Applications for regular assistance are processed year-round. Intake staff must enter all relevant documents into SmartSimple, whether the application is approved, pending, or denied.

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2.1.1 Pre-Application Intake for Priority Enrollment Applicants An optional pre-application intake for Priority Enrollment (PE) applicants seeking Regular or Crisis benefits may begin no more than 60 days before the general application period unless otherwise authorized. Priority Enrollment Applicants include: • Elderly (age 60 or older), receiving Social Security benefits • Disabled, receiving SSI or SSDI benefits, or • Applicants with a completed Verification of Disability Form. During the PE period, only eligible applicants meeting the vulnerability criteria above may apply. All others must wait for the regular program opening. Any application submitted before the PE period opens must be denied and returned to the applicant, with a notice encouraging reapplication after the official opening. Applications submitted during the PE period will be assigned a date of November 1, 2025.

2.2 Accommodations Special accommodations will be made available for homebound clients, individuals with disabilities, and Limited English Proficiency (LEP) clients. Application Availability and Mailing: Applications must be accessible at all subgrantee offices, outreach locations, and mailed free of charge to clients upon request. Mailed applications must be date-stamped upon receipt and include a copy of the applicant’s government-issued ID. The envelope must also be uploaded to SmartSimple for verification under “Other”uploads tab of the software. Subgrantees are responsible for ensuring that the THDA LIHEAP Application and forms are translated for applicants with LEP. Requests for translation assistance can be made by emailing LIHEAP@thda.org.

2.3 Acceptable Forms of Verification for Veterans or Active Military For Veterans: The Department of Defense issues DD-214 or DD-256 forms to verify a veteran’s discharge status. Additional forms are acceptable depending on the discharge date, such as WD AGO forms, NAVPERS, and more. A state-issued ID or driver’s license with "VETERAN" listed, or VA benefits records, are also valid. Applicants dishonorably discharged cannot claim veteran status

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For Active Military: Active duty, retiree, or reservist IDs are acceptable, as well as military dependent IDs. If none of the required forms are available, contact THDA for verification assistance.

2.4 Citizenship/Qualified Alien Verification Federal Requirements Alien status must be verified for all household members who are not U.S. citizens. Federal law requires that every household member receiving Energy Assistance must be either: 1. A United States citizen; or 2. An alien in a qualified immigration status. 3. Certificate of Naturalization (DHS Forms N-550 or N-570). 4. Certification of U.S. Citizenship (DHS Forms N-560 or N-561). 5. Certification of Birth Abroad of a U.S. Citizen (Form FS-240 or FS-545). 6. U.S. Citizen Identification Card (Form I-197) 7. Alien Registration Receipt Card (Form I-551) 8. Arrival-Departure Record (Form I-94) 9. Temporary Resident Card (Form I-688) 10. Or other proof of Qualified Alien status as provided by the Department of Homeland Security. Note: Some of the above forms (e.g., Arrival- Departure Record (Form I-94) may prove lawful entry but do not prove intent to establish permanent residency. See the US Citizenship and Immigration Services website at http://www.uscis.gov/portal/site/uscis Any household member who does not meet either of these criteria is not counted toward household size for Energy Assistance purposes; however, their income must still be included when calculating total household income. This creates what is commonly known as a mixed- status household. Social Security Number (SSN) Policy THDA policy mandates that each individual served with LIHEAP funds—except children under the age of 1—must provide documentation of their Social Security Number (SSN). An Individual Tax Identification Number (ITIN) is not acceptable for SSN verification. For children under 1 year of age claimed as U.S. citizens, documentation from Section 2.1 of this Manual must be provided. Acceptable SSN verification includes:

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• Original Social Security card; • Verification from the state’s case management and eligibility system (if SSN is listed for the applicant); • Form SSA-1099 (Social Security Benefit Statement); or • Other documentation issued directly by the Social Security Administration (SSA). Not acceptable for SSN verification: • Secondary documentation that merely lists an SSN; • Social Security cards marked “Valid for Work Only with DHS Authorization” or “Not Valid for Employment.” These restricted SSN cards are also not acceptable for determining qualified alien status. In such cases, two forms of documentation—one for identity and one for immigration status— will be required. Acceptable immigration documents are listed in Section 2.5.a.1 – 2. Mixed-Status Households and SSN Refusal

When providing LIHEAP benefits such as energy bill reductions which can reasonably be prorated, LIHEAP grant recipients must prorate such benefits when they are being provided to eligible individuals residing in a household with ineligible members, based on the number of eligible household members. The income of all household members—regardless of eligibility— must be documented, verified, and included in the calculation of the LIHEAP benefit amount. However, ineligible household members must be excluded from the total household count when determining the benefit. If an applicant or household member does not have an SSN, their eligibility is not automatically impacted. If other eligible members exist, benefits may be provided to the household (with restrictions). The income of the undocumented individual is included in the total household income, but they are not counted in the total household size. If a household has an SSN but refuses to provide it, the entire household is ineligible. This includes refusal to provide other documentation required to determine eligibility. Agencies must clearly document whether the SSN is unavailable or simply being withheld. This determination must be included in the written notice to the applicant.

Program Oversight THDA will monitor SSN and citizenship verification policies to ensure consistent application across all local agencies.

2.5 Documentation Required for U.S. Citizens and Qualified Aliens Written or Verbal Requirement: Every state government entity or local health department must include a written or verbal

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statement on all forms (including electronic forms) and automated phone systems. This statement requires all applicants for federal, state, or local public benefits to attest, under penalty of perjury, that the applicant is either a United States citizen or a qualified alien as defined by 8 U.S.C. § 1641(b). Applicants Claiming United States Citizenship MUST provide a copy of two (2) or more of the following: 1. Tennessee Driver’s License, or photo ID issued by Department of Homeland Security. 2. A valid driver license or ID issued by another state provided its issuance requirements meet Department of Homeland Security criteria. 3. An official birth certificate issued by a U.S. state, territory, or other jurisdiction. Puerto Rican birth Certificates issued before July 1, 2010 do not count. 4. A federally issued birth certificate. 5. A valid, unexpired U.S. passport. 6. A report of birth abroad of a U.S. citizen. 7. A certificate of citizenship. 8. A certificate of naturalization. 9. A U.S. citizen ID card. 10. Any successor document to #’s 4-9 above. 11. SSN that the entity may verify with the Social Security Administration in accordance with Federal Law. Applicants claiming qualified alien status must submit two (2) or more copies of the following forms, one of which MUST be a U.S. government issued photo ID, as determined by U.S. Homeland Security to be acceptable for verification through the SAVE program. Common types of documents used to verify immigration status are: 1. I-551 (Permanent Resident Card or “Green Card”). 2. I-766 (Employment Authorization Card). 3. I-327 (Reentry Permit). 4. I-571 (Refugee Travel Document). 5. Machine Readable Immigrant Visa (with Temporary I-551 language). 6. DS-2019 (Certificate of Eligibility for Exchange Visitor (J-1) Status). 7. I-94 (Arrival/Departure Record). 8. Unexpired Foreign Passport.

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Crisis and Regular Assistance applications must be continuously accepted throughout the contract period. Agencies are required to offer Crisis funding to all qualified applicants up to March 15, as long as there are remaining funds available. Applicants who do not qualify for Crisis assistance must be given the option to apply for Regular LIHEAP assistance, regardless of the availability of funds. Applications for Regular LIHEAP assistance must be processed “In a timely manner" generally meaning as quickly as it is reasonable and appropriate for the situation, without undue delay. Emphasis on completing a task or fulfilling an obligation as promptly as possible, given the specific context and circumstances. Subgrantees are required to approve, deny, or add applicants to the waitlist, and notify customers of their status through a digital correspondence generated by the SmartSimple system within thirty (30) business days from the intake month. For more details, see Section 2.11 regarding the early application process for vulnerable populations. Benefit payments must be made to the vendor within 90 calendar days from the date of vendor verification. If the vendor hasn’t verified the payment list within 5 business days the agency must follow up with the vendor, so benefits are not delayed. The subgrantee will pull an approved applicants report and send out Approval/Denial correspondence generated within the SmartSimple system. Pending application correspondence will also be generated by SmartSimple. The household will be notified by email or log into SmartSimple to check on the status of their application. Applicants submitting an incomplete application will receive a pending verification correspondence and will have 15 business days to provide the missing information. All LIHEAP application data, including incomplete or denied applications, must be entered into the SmartSimple system with the date received. If the applicant does not submit the required information within 15 business days, the case status will be changed to "denied," and the applicant will need to reapply for assistance. At the agency's discretion, a denied applicant's status can be changed to “pending and add notes in the file why the status was changed to pending within the SmartSimple system, provided the application can still be completed. Both subgrantees and THDA LIHEAP staff will generate and utilize reports to track compliance with timeframes and ensure consistency in the application process. THDA Compliance and Asset Management department will monitor all local agencies for compliance to ensure that Crisis and Regular assistance policies are being correctly implemented.

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1. Request Assistance with an Energy Emergency: The household must submit an application, providing one of the following to verify the energy emergency: o A bill, disconnect notice, or other disconnect documentation verifying the energy emergency. o An eviction notice due to utility overage, past due rent, or unpaid rent. o A fuel depletion notice indicates fuel is at 20% or less in the tank and delivery was refused. o A non-functioning heat/air unit or equipment not working properly. 2. Additional Criteria (Respond “Yes” to One of the Following): o Recent, within the last three (3) months, an unanticipated Medical or Household Expenses: The household must have an unanticipated medical or major household expense that exceeds 100% of their utility bill. Documentation could include receipts for medical payments or other major expenses. o Recent Job Loss or Death of Wage Earner: The household wage earner lost their job or died within the last 12 months. Documentation could include termination or lay-off notice, unemployment insurance (UI) claims or eligibility notifications, obituary, death certificate, or funeral program. o Loss of Significant Work Hours: The household wage earners experienced a significant loss of work hours in the past thirty (30) days. Documentation could include a letter from the employer outlining details of lost hours or pay stubs. o Household Member Leaving the Home: A household wage earner left the home within the past forty-five (45) days. Documentation could include a recent application for family assistance (e.g., Families First, SNAP), order of protection, police report, revised lease, or other legal documentation. o Vulnerable Household Members: Households with children 5 years old or younger, or with individuals 60 years or older. o Active Military or Veterans: Households with a member who is active military or a veteran. Verification of military service is required. o Disabled Household Members: Household members who are disabled. Verification could include SSI or SSDI letters or a Verification of Disability form signed by a medical professional. o Non-Functioning Heating System: Households with a non-functioning or malfunctioning heating system. Examples can be found in the Appendix. 3. Notification within 18 Hours for Life-Support Equipment Needs: o If a household has a member who requires life support equipment sustained by utility services, documentation from a medical equipment company or a medical professional's letter indicating the required equipment must be provided.

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These eligibility criteria questions are integrated into the SmartSimple beneficiary application section. If paper applications or forms are used by the subgrantee, they must include these eligibility questions and be approved by THDA 15 days prior to each program year.

Crisis Funding Allocation Crisis Assistance is allocated as a minimum of 10% of the subgrantee’s Direct Assistance award to individuals. Subgrantees may allocate more than 10% to Crisis Assistance, transferring funds from Regular Assistance as needed. Crisis assistance must remain available to approved applicants who meet the eligibility requirements, as long as funding is not exhausted. Crisis funds are managed in a separate budget category within SmartSimple to ensure availability of crisis intervention through March 15 of each program year. A copy of the notification correspondence sent to the household must be kept in the applicant’s record. If the subgrantee communicates with a utility provider via email, this documentation must also be maintained in the applicant’s record and available for review. The notification serves the purpose of preventing disconnection of services until payment is received. Crisis Assistance will be determined provided by THDA’s benefit matrix.

2.10 Family Size and Percentage of Poverty Eligibility Refer to the Benefit Matrix in the Appendix for detailed Income Guidelines. Households with income at or below 60% of the State Median Income (SMI) are eligible to receive assistance under the LIHEAP program. Prioritization of Households for Assistance The determination of which households receive assistance is based on a prioritization system that considers the presence of vulnerable household members. Households are ranked according to the following vulnerability categories: 1. Individuals aged 60 or older who are receiving Social Security benefits

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2. Individuals who are disabled, as identified by receiving SSI, SSDI, or by submitting a Verification of Disability form completed and signed by a licensed medical professional. 3. Households with children aged five (5) or younger 4. Veterans Within each vulnerability category, applicants will be further prioritized based on factors such as lowest income, highest energy burden, and greatest overall vulnerability. Households with the highest energy burden within each vulnerability rank will be served first. Utility Selection for LIHEAP Benefits Each approved household must choose one (1) utility to receive the LIHEAP benefit. In cases where an approved applicant receives a benefit under $500, but the home uses propane as a deliverable fuel, the applicant will have the option to apply their benefit to propane. However, due to utility company payment requirements, the minimum payment for propane assistance will be $500. This process ensures that assistance is distributed effectively while addressing the specific needs of vulnerable households.

2.11 Depletion of Funding When funding for LIHEAP is depleted, it is necessary to inform the applicant that their application will be placed on the waitlist due to a lack of available funds. The agency must notify the client when funding becomes available and/or provide details about the next open application period. A waiting list must be maintained within SmartSimple until the close of the program year, in case additional funding is allocated by the state. Participation in other programs, such as the Community Services Block Grant (CSBG), within the same program year, does not affect an applicant's eligibility for LIHEAP. However, the agency must ensure that any relevant updates regarding funding status are communicated to THDA as requested during the contract period. These updates may include whether funding will be fully expended or if the agency anticipates having remaining funds at the end of the contract period. Maintaining effective communication and accurate records regarding funding status helps ensure that applicants receive timely support and that the program operates within its budget.

(policy-manual-2026)(page-27)Page 27#

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This thorough and systematic review process is essential to maintain the integrity of the LIHEAP program and to ensure that all applications are processed accurately and efficiently.

2.13 Income Income refers to cash receipts earned and/or, in some cases, unearned by the applicant household before taxes. For a more detailed breakdown of what constitutes income, refer to the “Cash Receipts Include” and “Exclusions” lists below. Income will be automatically calculated within the THDA mandated, SmartSimple Software System. THDA Compliance Asset Management team will conduct ongoing monitoring of the SmartSimple system to ensure compliance and accurate income calculation. Cash Receipts Include: • Wages, commissions, salaries, and tips, before any deductions • Net receipts from self-employment: This includes receipts from a person’s own business or from an owned or rented farm, after deducting business or farm-related expenses, • Regular payments such as Social Security*, TANF, railroad retirement, unemployment compensation, strike benefits from union funds, workers compensation, veterans' payments, training or any other stipends, severance pay, child support, regular adoption assistance, military family allotments, or money regularly received from an absent family member or someone not living in the household • Irregular income: Income derived from occasional work such as mowing lawns, childcare, donating plasma, collecting cans/bottles, informal child support agreements, or cash gifts received in the past 30 days • Regular insurance or annuity payments • Net income from Social Security, pensions (private and government, including military retirement pay), and VA benefits (excluding Medicare premiums, overpayment recovery, or garnishment payments) • Dividends and/or interest: A letter from a corporation listing the amount, or a bank statement. Interest is only counted if it exceeds $200 annually and is withdrawn • Net rental income and net royalties • Periodic receipts from estates or trusts • Net gambling or lottery winnings • Black Lung benefits: Considered income, except for the first $20 of each monthly benefit

(policy-manual-2026)(page-28)Page 28#

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Exclusions: The following cash receipts are not considered income for determining applicant eligibility: • Utility allowances provided to public housing and Section 8 tenants • Capital gains • Withdrawals from a bank account • Money received from the sale of a property, house, or car • One-time payments from a welfare agency to a family or person experiencing temporary financial difficulty • Tax refunds • Gifts, loans, or lump-sum inheritances • One-time insurance payments or compensation for injury • Non-cash benefits, such as employer- or union-paid portions of health insurance • Employee fringe benefits, such as food or housing received in lieu of wages • Job-related reimbursements: This includes expenses like mileage, meals, uniforms, medical expenses, etc. • The value of food and fuel produced and consumed on farms • Federal non-cash benefit programs such as Medicare*, Medicaid, Supplemental Nutrition Assistance Program (SNAP), school lunches, and housing assistance • Earned income for a dependent who is 18 years of age and older. Earned income (regardless of amount) of a dependent (in school) living with a parent or guardian. Proof of school enrollment must be provided with the application. • Payments to AmeriCorps Vista volunteers • Income received under Title V of the Older Americans Act - SCSEP • Direct benefits received by participants in the Foster Grandparents Program • Funds received by a household for the care of a foster child • Education benefits received under the GI Bill • The value of childcare paid by the Department of Human Services and received by client households • Combat zone pay to military personnel • Native American per capita payments, unless provided as part of gaming (casino) revenue • Income exchanged within a household: This is not counted as income Note Please reach out to THDA for case-by-case guidance regarding specific income-related questions.

(policy-manual-2026)(page-31)Page 31#

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• Eligibility Benefit Management System (EBMS) documentation: EBMS can verify income for household members and must be used to confirm both earned and unearned income. If household members are not listed in the EBMS, other acceptable forms of verification must be provided. All EBMS verification should fall within the current income timeframe (verified within the last twelve months). Subgrantees must print all applicable EBMS screens, clearly indicating both unearned and earned income. • Child support or alimony records: Documentation must be provided. including child support printout or monthly notice. Contact THDA for additional guidance if necessary. • Employer statements: Written, signed, and dated statements from employers on official company letterhead. Subgrantees cannot contact employers directly for verification of income. • Self-employed income verification: Copies of income tax returns or adjusted gross income after the cost of doing business. Tax returns from the previous year will be accepted until the April cutoff period, after which current returns are required unless an extension has been granted. • Self-employed documents: Well-maintained documents, such as ledgers or receipts, from self-employed individuals. • Social Security Administration (SSA) documentation: Award letters or other official proof of income from SSA, as well as bank statements with redacted account information. • Employer separation letter: A letter from the employer dated within the past 30 days, and a copy your last paycheck stub is acceptable. • Zero income verification: When all other methods of verifying zero income have been exhausted, a Verification of Income and Expenses Form must be completed and signed by the applicant and any household members claiming zero income. This form must include a reasonable explanation of how the household meets its basic needs, such as shelter, heat, utilities, and essential needs. If no reasonable explanation is provided, the application must be denied. • Social Security, Pension, and VA benefit verification: The most recent Social Security, Pension, or Veterans Affairs (VA) benefit letter, or bank statements showing benefit deposits (with account numbers redacted).

2.17 Calculation of Energy Burden Here are examples of how to calculate energy burden: • Example 1: A household has a combined countable income of $1,015.45 per month and a monthly energy expense of $89.24.

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$89.24 ÷ $1,015.45 = 0.0878822197 which is 8.79%

• Example 2: A household has a combined countable income of $1,015.45 per month and a monthly energy expense of $85.24. $85.24 ÷ $1,015.45 = 0.0839430794 which is 8.39% Energy burden for metered utilities will be calculated using the current cost of energy. Only the energy costs from the past 12 months will be considered in the energy burden. Client energy bill data includes all required customer payments, such as monthly service charge, usage charge, delivery charge, and taxes, and any other costs associated with energy that the client cannot opt out of. In addition, to get the best estimate of the client's total energy burden, it is appropriate to include any late payment charges and reconnection fees charged by the vendor. • Deposits for service should not be included in the energy bill data since those funds still belong to the client. • Expenditures should exclude optional charges such as appliance repair contracts, equipment purchases, and other special services. • Non-energy services, such as water, cable, or trash collection, are not to be included in the energy burden calculation. Mass-Metered Utilities If an applicant’s energy cost is included in their rent, they are still eligible to receive assistance. In this case, both the landlord and tenant must complete the LIHEAP landlord/tenant energy assistance agreement, found in the Appendix, which outlines specific stipulations. • The benefit amount can be applied to a different energy vendor upon the applicant’s request, even if the applicant provided energy usage data for a different utility. For example, if an applicant provides a 12-month printout for their electricity but prefers the benefit applied to propane, this is allowed, provided the account is active. 2.18 Public Housing and Section 8 Applicants: if an applicant receives public subsidies for a specific utility allowance or reimbursement. The applicant who exceeds their allotted utility allowance or reimbursement are required to pay any “overages” or excess consumption charges. Energy bills directly from public housing agencies must be accompanied by documentation from the housing program indicating any “overages” or “excess. Tenants with a bill in their name are fully responsible for energy costs and are not subject to the

(policy-manual-2026)(page-33)Page 33#

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overage processing procedures. Applications from these tenants will be processed without any adjustment to energy usage. Applicants without an energy burden (i.e., those who do not have an active energy account) are not eligible for assistance. If the applicant has received LIHEAP assistance in the previous program year and still has any LIHEAP credit on their account, they are not eligible for assistance in the new program year until the credit has been used. If there is a LIHEAP Credit on the account and the applicant provides a current utility bill reflecting that the credit will be completely absorbed, the client can apply. 2.19 Annual Energy Usage Documentation Applicants must provide documentation of their annual energy usage from all active heating and cooling accounts. Acceptable documentation includes correspondence from electric and natural gas utility companies, and/or written statements from home-delivered energy suppliers. The documentation must identify: • The household member responsible for the energy costs • The applicant's household address • The time period for which the energy costs are being reported • If the bill is under a non-household member's name, the name of the account holder must be listed on the LIHEAP Application and included in THDA records. All current energy usage must be accurately reflected in the documentation. • It is best practice for subgrantees to collect 12 months of energy billing for all LIHEAP approved utilities. This practice is common to assess a household's annual energy burden and eligibility for assistance. How subgrantees can collect previous billing history The process for obtaining this information is a standard part of the intake and review process for energy assistance, though the exact procedure can vary by local agency. • Request from the client: The primary method is to have the client provide the necessary documentation themselves from their utility company or request the billing statements for the past 12 months. • Contacting the utility company: A subgrantee may be able to contact a utility company on behalf of a client to confirm billing history, especially if the client is having difficulty. This would require the applicant's consent, and the subgrantee would need to follow established procedures with the energy supplier.

(policy-manual-2026)(page-35)Page 35#

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• Heating Assistance is applied from October through May. • Cooling Assistance is applied from June through September. When funds are unavailable to serve all households, applicants will remain on a waitlist until September 30th or until additional funding is available.

2-21 Natural Disasters and Emergencies Natural disasters and emergencies may impact the delivery and administration of the LIHEAP program. Both at the state and local levels, the program must be able to adjust and respond to catastrophic events. Proactive planning is essential to ensure the needs of affected households and local agencies are met. The Housing Program Manager - Energy will guide subgrantees in the use of LIHEAP resources during a natural disaster or emergency. The Housing Program Manager - Energy will follow state and federal disaster declarations, including the designation of affected geographic areas. Subgrantees must follow all directives from the state, including coordination with other agencies providing disaster relief or emergency assistance. State LIHEAP Disaster or Emergency Waiver In the event of a natural disaster or emergency, the Housing Program Manager - Energy has the authority to temporarily modify or waive any state LIHEAP procedures to mitigate hardship and protect health and safety. The Housing Program Manager - Energy may modify the Tennessee State Model Plan for LIHEAP and notify the U.S. Department of Health and Human Services. Disaster and Emergency Notification Requirements Subgrantees must notify the Housing Energy Program Manager of any natural disaster or emergency in their jurisdiction that interferes with their ability to operate the program. Allowable Uses of Disaster Funds After a federal or state declared natural disaster, LIHEAP funds may be used to meet the energy-related needs of eligible low-income households. The following items have been deemed allowable by the Department of Health and Human Services for use during a natural disaster:

(policy-manual-2026)(page-37)Page 37#

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Individuals whose claims for LIHEAP assistance are denied, or whose applications are not processed within a reasonable timeframe, may request a hearing with the local contracting agency. Subgrantees must detail and obtain approval for their fair hearing process in the annual LIHEAP Agency specific Operational Plan. A hearing is not required if LIHEAP funds are no longer available to the local agency. Reasonable Promptness for Regular Assistance Agencies must take action on regular assistance applications within 30 business days. Agencies may choose to calculate the 30-day period either from the application date or from the end of the intake month, whichever is more suitable for the process. Reasonable Promptness for Crisis Assistance Crisis assistance must be provided within 48 hours to resolve the client’s energy crisis. If the client is in a life-threatening situation, the agency must take action to resolve the crisis within 18 hours. (See details on 2.9 on Page 20-22). Subgrantees must establish clear processes and procedures for hearings at the local level. At a minimum, these processes should include: 1. A statement regarding the Administrative Fair Hearing process, provided to all applicants. 2. Requests for hearings must be made in writing by the applicant, using a specific Administrative Fair Hearing form provided by the local agency. The form should detail information made by the agency in denying or failing to act with reasonable promptness on the applicant’s claim for assistance. 3. A copy of the completed form must be provided to the agency, THDA at LIHEAP@THDA.org, and another kept in the applicant’s permanent record. 4. Requests for hearings must be submitted within 30 calendar days from the denial date of LIHEAP assistance or from the projected date of determination when an application has not been acted upon. 5. The agency must hold the hearing within 15 business days after receiving a valid request and must provide written notice of the outcome to both the applicant and THDA. Applicants denied LIHEAP assistance must be informed of: 1. Their right to request a hearing. 2. The procedures for requesting a hearing. 3. A completed Administrative Fair Hearing Form

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3.1 Documentation and Record-Keeping Processes Each client must have an individual client file, and all documentation that supports client eligibility and services provided must be retained in that file. Failure to provide or locate required documentation is considered non-compliance. Client records will be retained for a minimum of five (5) years after the final invoice for the program year has been submitted. These records must be stored in a secure location accessible only to authorized personnel. For digital files that are not uploaded into SmartSimple, a secured system must be in place, with access controlled and monitored by management. The process for uploading and securing scanned program records into a secure database must be outlined in the Agency Specific Operational Plan. Digital applicant files must contain all the same information required in hard copy files. Additionally, Continuity of Operations Plans should include protocols for the preservation of electronic records following any emergency or disaster.

3.2 Confidentiality of Client Information Maintaining the confidentiality of client information is essential. The LIHEAP grant contract between each agency and THDA specifically addresses this responsibility, and agencies must adhere to the terms outlined in the contract. Refer to the current LIHEAP grant contract for specific language regarding confidentiality. Agencies must comply with all relevant laws and regulations concerning privacy, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Health Information Technology for Economic and Clinical Health (HITECH) Act, and other applicable privacy rules (collectively referred to as the “Privacy Rules”). • All employees must undergo training on client confidentiality, code of ethics and conduct, electronic communications, customer relations, and release of information. This training must be documented and included in the Employee Handbook or Agency Policy Manual.

3.3 Conflict of Interest Contract agencies must ensure that all employees involved with LIHEAP programs sign a Conflict-of-Interest statement. A blank copy of the agency’s Conflict of Interest Policy must

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Chapter 4 – Outreach 4.1 Outreach General Information Outreach is the process by which information about LIHEAP is made accessible to the public. As outlined in the LIHEAP statute under Assurance 3, the outreach effort should be designed to ensure that eligible households, particularly those with elderly or disabled individuals, or both, as well as households with high home energy burdens, are informed about the assistance available under the program. In practice, outreach refers to the various activities that LIHEAP state and local providers engage in to promote program awareness and increase enrollment. These activities aim to reach and enroll households that are eligible for LIHEAP assistance. Outreach efforts can also include targeted activities designed to reach specific populations. For instance, a LIHEAP office may choose to prioritize outreach to elderly households, lower-income households, or recipients of public assistance, ensuring that these groups are effectively informed about the available services. Outreach may also assist clients in completing their applications for assistance. Effective outreach not only ensures that the neediest households—including the elderly and disabled—are aware of the LIHEAP program but also informs them about other energy- related programs they may be eligible for, such as the Weatherization Assistance Program or utility-funded rate assistance. Well-executed outreach can streamline both the application and enrollment processes, ultimately increasing program accessibility and efficiency.

4.2 Outreach Categories and Definitions • Community Education o What is LIHEAP? The Low Income Home Energy Assistance Program (LIHEAP) is a federally funded grant program that helps supplement eligible households home energy needs. The program helps households maintain a safe and comfortable living environment by reducing the risk of health and safety issues caused by unsafe heating and cooling practices, especially during the winter and summer months. o What type of assistance is available?  Regular Assistance: This benefit helps families supplement their heating or cooling bills. The one-time payment is sent directly to the utility company or fuel provider and is credited to the household’s

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account. Assistance is based on household size, income, and energy burden.  Crisis Assistance: Similar to Regular Assistance, but this component addresses uncontrollable circumstances such as disconnections or emergency situations. Eligibility for crisis assistance should be confirmed with the local LIHEAP agency. o What does LIHEAP help pay? LIHEAP can help supplement the costs of primary heating or cooling bills, which include utilities such as electric, gas, propane, coal, oil, kerosene, and wood. The goal is to ensure eligible households stay safe and healthy year- round. 4.3 Subgrantee Outreach Each LIHEAP Subgrantee is required to detail their outreach activities in the annual Operational Plan. One key factor in creating an effective outreach program is identifying and coordinating with other agencies, organizations, and groups that can assist in outreach efforts. Collaboration with these groups can increase reach and effectiveness. Some potential partners for outreach activities include: • Libraries (e.g., librarian staff and potential intake date setup) • Health Departments (e.g., staff meetings) • Department of Human Services (e.g., local county offices and health fairs) • Senior Citizen Centers (e.g., county office meetings) • Public Housing Authorities (e.g., presentations at staff meetings) • Continuum of Care meetings (e.g., monthly presentations) • Utility Offices (e.g., vendor contact) • Domestic/Sexual Victim Service Agencies (e.g., local advocates) • Courthouses (e.g., clerk's office interactions) • Sheriff's Departments (e.g., roll-calls and in-service training) • City Police (e.g., roll-call and in-service training) • Landlords (e.g., outreach through rental properties) • School Systems (e.g., in-service, registration events, or open houses) • Churches (e.g., Sunday announcements or Wednesday presentations) • Career Fairs (e.g., booth setup for intake or volunteer recruitment) • Employment Temp Offices (e.g., outreach to job-seekers) • Hospitals (e.g., monthly meetings or collaboration with social workers) • Department of Children Services (e.g., staff meetings and parenting groups) • Attorney Offices • Family Justice Centers (e.g., board meetings) • Crisis Pregnancy Centers (both faith-based and secular)

(policy-manual-2026)(page-47)Page 47#

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• Energy Conservation Education Offering classes where clients can learn practical ways to reduce energy consumption. Clients must sign a participation agreement, and pre/post energy usage data must be shared or collected directly from the vendor. Examples of Energy Conservation Education: o Developing and instructing energy education exhibits, videos, and hands-on instructional materials. o Providing incentive benefits to households for attending energy education classes, such as offering gift cards to local hardware stores for energy- efficient products. • Energy Saver Kits Distributing kits to clients who agree to install the items and track the impact on energy usage. Clients must sign a Client Commitment Form and provide pre/post energy usage data to measure effectiveness. These activities should be structured in ways that maximize client engagement and program effectiveness, helping households transition to reduced energy consumption while gaining long-term energy security.

5.3 Allowable Energy Conservation Expenditures Services provided under Assurance 16 are eligible for reimbursement from Assurance 16 funds rather than administrative funds. Documentation of these activities is necessary to demonstrate that clients benefited from services that effectively reduced their energy needs. Allowable expenditure costs under Assurance 16 include services that encourage and enable households to reduce home energy needs, such as: • Salaries and Benefits Staff time dedicated to conducting and collecting reporting information for Assurance 16 activities is reimbursable. Staff must track actual time spent on these activities, and time billed must reflect actual hours worked, not estimated hours. • Travel Costs associated with travel for Assurance 16 activities, such as traveling to a homebound client for case management or attending an energy conservation class, are reimbursable under Assurance 16. Travel documentation must clearly indicate that it is for Assurance 16 purposes. • Supplies The cost of Energy Saver Kits, as well as other materials such

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5. Monitoring and Enforcement • THDA will monitor expenditure rates monthly and review compliance against the spend down calendar above. • Subgrantees who fail to meet spend down expectations may be subject to fund recapture, or additional allocations will be suspended. • Recaptured funds will be redistributed to higher-performing subgrantees meeting or exceeding benchmarks. • THDA staff will engage with subgrantees regularly to review progress, address expenditure challenges, and coordinate any reallocations. • A final, detailed funding release and monitoring schedule will be issued once contracts are executed.

7.3 Contract and Amendments Subgrantees must comply with all terms and conditions outlined in their current contract, as well as any subsequent amendments. All submitted expenditures will be reviewed in accordance with the approved budget. Subgrantees that do not meet their spend down timelines will face the risk of having their funds withdrawn and reallocated to subgrantees who are meeting or exceeding these benchmarks.

7.4 Budget and Budget Amendments All LIHEAP budgets and budget amendments must be submitted for review and approval through SmartSimple software system. The initial budget for a new allocation must be submitted prior to the contract and the Authorized Signature Form. Budgets must be approved prior to any expenditure of funds. • Budget revisions must be submitted if expenditures for any one-line item exceed the allocated amount. • A budget revision is needed when expenditure exceeds a line item in an invoice. THDA through SmartSimple will reject the invoice until the budget is revised. • All LIHEAP budgets/amendments and invoices must be signed by the individual on the Authorized Signature Form. If the authorized signatory changes (e.g., staff turnover or updated authorization), an updated Authorized Signature Form must be submitted.

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Note: The individual signing in Block 6 of the Authorized Signature Form cannot be the same person as the individual listed in Block 5 (the person authorized to sign payment requests). In other words, an executive or official cannot certify their own signature.

7.5 Expenditure Caps and Minimums The following expenditure caps and minimums apply to the LIHEAP funds: • Administrative Costs: 9% maximum of the total awarded allocation • Direct Program Support: 10% maximum of the total awarded allocation • Crisis to Individuals: 10% minimum of the total awarded allocation, more is encouraged • Energy Conservation: 2% maximum of the total allocation • Outreach: 2% maximum of the total allocation Administrative costs must comply with guidance provided in the appropriate OMB circular(s) and other program-specific guidance and must adhere to the subgrantee's submitted and approved annual budget. Subgrantees should define their administrative costs in accordance with generally accepted accounting principles and procedures. Indirect costs can be considered part of Grantee Administration and are allowable if the indirect rate or amount is approved by the cognizant agency for the subgrantee. Your Indirect Cost Rate verification form should be updated yearly and submitted to THDA. Subgrantees may spend more than 10% on Crisis Benefits, which is encouraged, as long as it aligns with the needs of the community. Agencies should assess the crisis needs each year and adjust accordingly to ensure crisis funds are available through March 15 of each year. Agencies should not deny a client based on exceeding the 10% Crisis Benefit cap. Instead agencies must amend their budget to cover the cost of any amounts over 10%, if regular funding is available.

7.6 Allowable Administrative Expenditures Administrative costs refer to the necessary expenses required for the proper administration of the LIHEAP program. These costs are capped at 9% of the total amount drawn down by the subgrantee. Examples of allowable administrative charges include: • Salaries for staff not directly providing services (e.g., Executive Director)

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• Salaries, fringe benefits, and travel expenditures of staff engaged in Direct Services, such as: o Benefit determination assistance o Information resources and referrals o Outreach o Crisis determination o Case management o Other services required for eligible households • Printing costs associated with materials for Direct Program Support activities. • Office supplies (e.g., paper, envelopes, and other expendable items) used for Direct Program Support activities. • Office space costs as a percentage of the area used for Direct Services. • Telephone costs when documented as used for Direct Services. • Copying costs when materials are copied and provided to clients. • Postage costs for mailing materials to prospective or current clients.

7.8 Allowable Outreach Expenditures (Assurance 3) Outreach expenditures are charged under a sub-category of Direct Program Support and are capped at 2%. These expenditures include: • Salaries and Benefits: Documentation must include timesheets showing hours billed to outreach and a description of outreach activities. • Upkeep of outreach offices: Necessary maintenance and operational costs for offices conducting outreach. • Travel: Gas receipts or travel invoices along with a description of the outreach activities performed based on the travel. • Supplies and materials: For client intake, including forms or resources used during outreach. • Printing and placing posters/flyers in local social service offices, offices of aging, Social Security offices, VA offices, etc. • Phone charges for outreach activities, including calls made to potential or current clients. • Publishing articles in local newspapers or broadcasting media announcements about LIHEAP services. • Including inserts in energy vendor billings to inform clients about LIHEAP assistance availability. • Mass mailings to past recipients of LIHEAP services.

(policy-manual-2026)(page-61)Page 61#

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Chapter 8 – Monitoring and Technical Assistance

8.1 Training and Technical Assistance THDA will provide mandatory training at least annually for subgrantees. Attendance is required for all mandatory trainings. Technical assistance will be offered upon request or when a need is identified during monitoring visits or other assessments.

8.2 Title VI-Nondiscrimination Policy and Training Subgrantees must adopt a nondiscrimination policy that ensures no person will be excluded from participation in, denied benefits of, or subjected to discrimination under any LIHEAP program or activity based on race, color, national origin, sex, age, or disability. A copy of the subgrantee’s nondiscrimination policy must be included in the agency’s Operational Plan – Agency Specific Questions. This policy must be disseminated to employees, applicants, and beneficiaries, and prominently posted in public areas within the agency. The Title VI coordinator or designated responsible party for the subgrantee must complete the THDA-provided Title VI/Nondiscrimination training annually. Additionally, subgrantees must ensure that all employees complete training on the fundamental requirements of Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1974, and the Age Discrimination Act of 1975 at the onset of their employment.

8.3 Monitoring Programmatic Monitoring will be conducted by the Compliance and Asset Management Division when 30% of the subgrantee’s contract funds have been expended. The agency will receive contact two (2) weeks before the scheduled review with details regarding the monitoring process, expectations, and a checklist. A notification email packet, which includes monitoring tools, will be sent to the subgrantee in advance. Additionally, a Client Summary List will be sent one day before the monitoring to ensure that the subgrantee pulls the appropriate files (regular, crisis, denied, and pending applications). These files must be uploaded to THDA’s secure Electronic Data Transfer (EDT) system.

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The Compliance and Asset Management Division will issue the monitoring report within 30 days of the review's completion. Subgrantees are required to respond to all findings noted in the report within 30 days of its issuance. Subgrantees have the option to respond to concerns or observations noted in the report, though this is not required. A formal response is required for all findings and must be submitted in the form of a Corrective Action Plan (CAP). • Finding: Evidence of a major deficiency in program performance or material noncompliance with statutory, regulatory, or program requirements, including monetary deficiencies that must be reimbursed or refunded to THDA. • Concern: Evidence of a minor deficiency or noncompliance with program requirements. CAPs are not required for concerns. • Observation: A potential deficiency that could arise if not properly addressed. CAPs are not required for observations. Examples of findings may include: • Failure to document supervisory review of client applications. • Incorrect calculation of benefit matrix. • Inadequate documentation of Crisis Assistance Payments. • Failure to provide Crisis Assistance within the federally required 48-hour timeframe. THDA’s Internal Audit Division is responsible for fiscal monitoring, which is independent of the Compliance and Asset Management Division. This division reviews each LIHEAP invoice for allowable costs and compares expenditures to the agency’s approved budget, ensuring compliance with administrative and program expenditure caps. Subgrantees are subject to single audit requirements, and a copy of the audit report must be submitted to THDA. The Comptroller’s Office may also conduct audits, and it is expected that each subgrantee will monitor the program for integrity in both fiscal and programmatic areas. Failure to submit the required Corrective Action Plan, or failure to comply with the approved CAP, may result in: • Reduction of the subgrantee’s contract • Reallocation of funds • Termination of the contract and disqualification from future program participation If a subgrantee partner fails to perform or meet expectations, THDA reserves the right to redefine service areas for delivery. In such cases, THDA may contract with external parties

(policy-manual-2026)Tennessee LIHEAP 2026 Policy Manual for Regular and Crisis Assistance (revised August 29, 2025)#

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