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Tennessee Housing Development Agency 2025 LIHEAP Policy Manual for Regular and Crisis Assistance 50

Chapter 7 – Fiscal Accountability

7.1 Allocation Levels THDA allows local agencies to allocate up to 9% of their LIHEAP formula allocation for administrative costs, while THDA retains 1% of the state’s LIHEAP allotment for administration. THDA will not reimburse any local agency for more than 9% of its total actual expenditure for administration or 10% of the allocation for direct program support over the course of the contract period. All subgrantees must ensure that they operate within these limits, in alignment with the amount drawn for each period.

7.2 Spend Down Requirements Subgrantees are required to meet the programmatic Spend Down Requirements set forth for FY 2026. 1. Funding Disbursement Schedule • Subgrantees will no longer receive their full allocation upon THDA’s receipt of the federal award letter. • Instead, funds will be disbursed in scheduled increments during the first program year: One-Third Distribution • November 1, 2025 – 40% of allocation released • March 1, 2026 – 35% of allocation released • June 15, 2026 – 25% of allocation released (Year 1 balance) o Dates are subject to change based on the timing of the federal allocation 2. Spend Down Requirements • 90% of funds must be obligated in Year 1. • 10% may carry over to Year 2, but all Direct Assistance must be fully expended by September 30, 2027. • In Year 3 (if needed), only Administrative, DPS, and Education/Outreach costs tied to previously obligated funds may be incurred.

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Page 51

Official source

Tennessee Housing Development Agency 2025 LIHEAP Policy Manual for Regular and Crisis Assistance 50

Chapter 7 – Fiscal Accountability

7.1 Allocation Levels THDA allows local agencies to allocate up to 9% of their LIHEAP formula allocation for administrative costs, while THDA retains 1% of the state’s LIHEAP allotment for administration. THDA will not reimburse any local agency for more than 9% of its total actual expenditure for administration or 10% of the allocation for direct program support over the course of the contract period. All subgrantees must ensure that they operate within these limits, in alignment with the amount drawn for each period.

7.2 Spend Down Requirements Subgrantees are required to meet the programmatic Spend Down Requirements set forth for FY 2026. 1. Funding Disbursement Schedule • Subgrantees will no longer receive their full allocation upon THDA’s receipt of the federal award letter. • Instead, funds will be disbursed in scheduled increments during the first program year: One-Third Distribution • November 1, 2025 – 40% of allocation released • March 1, 2026 – 35% of allocation released • June 15, 2026 – 25% of allocation released (Year 1 balance) o Dates are subject to change based on the timing of the federal allocation 2. Spend Down Requirements • 90% of funds must be obligated in Year 1. • 10% may carry over to Year 2, but all Direct Assistance must be fully expended by September 30, 2027. • In Year 3 (if needed), only Administrative, DPS, and Education/Outreach costs tied to previously obligated funds may be incurred.