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1900. 4 I I L • / LETTER OF CREDIT PROCEDURES ( Recipient Organization) July 1968 t .A HUD HANDBOOK I U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D. C. 20410 �1900.4 FOREWORD This Handbook establishes policies and procedures applicable t o the use of lette rs of credit fol'. funding purposes. Recipient organizations may obtain the nece ssary funds (Federal portion onl y ) t o carry out a HUD project by submitting a payment voucher to a l ocal comme r cial bank . Thi s technique (a) pr ovides funds to a recipient or ganization promptly as they are needed, and (b) precludes the withdrawal of funds from the U. S. Treasury sooner than absolutely necessary . HUD- Wash., D. C. �1900.4 TABLE OF CONTENTS Paragraph Page CH.APTER 1. 1. 2. I NTRODUCTION Purpose Method of Operation CH.APTER 2 . 1 1 POLI CY AND GENERAL PROVISION 3. Po licy 5. Accounting Stati on Symbols Location of HUD Offices 3 5 5 4. Limitations and Exceptions 6. CH.APTER 3. 7. 8. 9. 10. 11. 6 RECIPIENT ORGANIZATION'S REQUIREMENTS Sel ect i on of Commercial Bank Si gnature Specimen (S . F. 1194 ) Execution of Payment Vouchers (Form TUS 5401) Distribution of Form TUS 5401 Reporting to HUD (HUD- 267) i HUD-Wash., D . C. 7 7 10 13 13 7/68 �1900 . 4 CHAPTER 1. INTRODUCTION 1. PURPOSE. Federal grant programs which involve cash advances to organizations outside the Federal Government constitute a significant portion of the Federal budget. The timing of advance grant payments to such organizations has a substantial impact on the United States Treasury Department, including the level of the public debt and financing costs. These procedures(a.) provide a system whereby the recipient organization may promptly obtain the funds necessary to finance the Federal portion of a project by presenting a payment voucher to a local commerical bank and (b.) preclude withdrawal of funds from the U.S. Treasury any sooner than absolutely necessary. 2. METHOD OF OPERATION. The following is a brief outline of the letter of Credit procedures: a. HUD makes a determination that a project will be f unded through the letter of credit technique and requests certain information from the recipient organization. b. The recipient organi zation selects a commercial bank and transmits certain inf ormati on concerning its selection to HUD. c. The recipient organization designates the employees which are authorized to drawndown funds against a letter of credit and certifies their signatures to HUD on a signature card. d. HUD certi fies the signatures appearing on the signature card to the Treasury Department. e. HUD prepares a l etter of credit. · Copies are transmitted to the Tre asury Department and to the rec ipient organization. f. The Treasury Department transmits the letter of credit and the signature card to the applicable Federal Reserve Bank or branch which services the commercial bank selected by the recipient organization. g. The recipient organization executes payment vouchers against the letter of credit to meet its immediate cash needs and presents them to the commercial bank for deposit. h. The commerc i al bank credits the recipient organization 's bank account. i~ The rec i pient organi za t ion reports drawd0wn inf ormation to HUD. HUD reports to U.S. Treasury. j. Page 1 · H UD-Wash. , D. C . 7/68 �19 00 . 4 CHAPTER 2. 3. POLICY AND GENERAL PROVISION POLICY. a. Cash advances shall be limited to the mim.nrum amounts possible and shall be timed to be as close as administratively feasible to the daily needs of the recipient organization. b. In instances where the contract between the U.S. Department of Housing and Urban Development (HUD) and the recipient organization provides that the recipient organization shall pay a part of the project costs in cash, the recipient organization shall provide its pro-rata share of the cash on a current basis pursuant to the contract. Generally, for instance, Federal funds should not be used exclusively until exhausted and then the non-Federal funds be used to pay the remaining project costs. c. Letters of credit shall be issued either by a HUD regional office or the central office (Washington) depending on whether the accounting for the program is performed on a centralized or a decentralized basis. The central office shall issue all letters of credit pertaining to all projects under the jurisdiction of the San Juan, Puerto Rico Regional Off.i ce. Hereinafter, all references to the regional offices shall exclude the San Juan, Puerto Rico Region and all references to the central office shall include the San Juan, Puerto Rico Region. d. The map (Figure 1) on the following page shows, &nwng other things, the locations of each HUD regional office and the geographical boundaries assigned to each office. The mailing address and telephone number of the Washington central office and of each regional office are shown on page 6 . 7 /68 Page ·3 H UD-Wash . , D . C. �MAP OF H V D REG IONAL B OUN DARIES Show ing Field orrlc e Locations DEPARTMENT OF HO US ING AND l 1 RBA:-- DEVELOPMENT • • HflZN.1, C IILUNCS 0 lA'IDCITY 'Oc.-.nuo c ~

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~ 00 DATE VOUCHER ORAWN I Jo 4. NAME AND ADDRESS OF DRAWER'S BANK 0 I $ 0 (1) H:, ,. SYMBOL 17 -865 AMOUNT I-' 0 >aj 0 ~ ~ FEDERAL RESERVE BANK OR DRA NCH (I) e. 7o V, ./"-- 0 I-' I certi f y that lid~ pnymrnt vo uch e r hna hf'r.n clrnwn In ncco rdan cc- with the t c rm .!t nnd co ndill o rrn o t the lc llC' r o f cre dit cited nud thnt th e nmount NAME AND ADDRESS OF U. S. AGENCY for which drawn is vropc rly !or crctllt. to tho account o( tho tlro.wcr nt tho d r nwcr'a bank. C ,~ 1 ·* 10 0 9. V1 .; .E 3: I ! ll . l)(:ille) (S~ na l ure) V1 "'C: L (ll l 0 (Countersignature) (Tillo) ....I ~ (!) ii: 0 ·I 14 P e r n.uthorlznllon of Fiscnl Ass is t an t Secretary, Treasu ry D epart· rn cn t, d ebit the general account o! the Trcn.su rcr oC the U. S. and pa y . to tho presenting bank U1e amount ahown above. ( BLUE ) to \De vn,oemm5 = • a -•• _ .. v v "• ""v" •vv ••· 0 FOR FED ERAL RESERVE BAN'l.~; ONLY (Date Debited) (A uthori1od Slanalure) (Date Debited) (Au thori.i:od S la:nal ure) ' (GREEN ) uio p resenting bank the amount ahown above. (Data Debited) SA::;~~;r.ay (Aulhori1cd Siinaturo) (WHITE ) al>,,...,,.,------- - --'---( {Authorizc,t Slgnalurc) J I-' C 0 '°00 0 ./"-- ~ ---.J I 2o 6. ~Q) - -i-fo- tho-:i>Ycii~lrmrirn·mnrunnmroanc s now11 i AGENCY SI AIION SYMBOL \ SERIAL NO . 'tJ ~~ - ~ •( ,.~. i - b e lh c m 1hn gC"nl o f the cl r:i.wc r . LEITER OF CREDIT NO. VOUCHER NO . V1 Q) "O f I 6 TfRM 1000 (TO BE COLLECTEO AS A NON -CAS H IT EM) Th i'! <Jrn.wf'r'!J bnnk !"! hall hr: fh (' n~<'nl o f lh e drn.wc r Co r the co ll ec tion o f th! ~ in !"! lrwn c- nl nnd c nc h s ub~c11u<'n l co ll ec ting comm c rclnl bnnk a hnll NAME AN D ADDRESS OF DRAWER Q)

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u E ~ 0 - VI . g-j VI . 0 "' _m C C. 0 u >, _,. ,,, I ij >, 0 .i L .B > 0 (!) >, I ~~ ""C . .0 "' C "' .0 .x: 1165503 PAYMENT VOUCHEt< ON :..!::TTER OF CREDIT FORM TUS 5401 (Rev . 12-67) -2 •,I 0 ~ �I 1900.4 Preparation of TUS-5401. Block Number Explanation 1. Enter the payment voucher number co!lllllencing with number 11 11 1 for each letter of credit and progressing in consecutive order. Amendments to the letter of credit will not interrupt the progression. 2. Enter the letter of credit number exactly as shown on the applicable S.F. 1193. Enter the applicable eight-digit accounting station symbol of the HUD office executing the letter of credit. 4. Enter the actual date that the payment voucher is presented to the local commercial bank. 5. Enter the dollar amount of the drawdown against the letter of credit. If the drawdown covers funds for more than one project, each project number and the amount of drawdown a licable to each ro ect shall be shown on the reverse side of Forro 'lUS 5 01 . 6. Enter the name, address, project number(s), and the contract number(s) of the recipient organization. The information shown in this block shall be exactly the same as shown on S.F. 1193 and on S.F. 1194. If additional space is required, use the reverse side of this form for listing project(s ) and/or contract(s ) numbers. Enter the name and address of the commercial bank which handles the recipient organization's bank account. 7. 8. Enter the city location of the Federal Reserve Bank or branch which services the local commercial bank, exactly as it appears on the S.F. 1193. 9. Enter "U.S. Department of Housing and Urban Development" and the address of the HUD office executing the applicable letter of credit. 10. & 11. The name and title of the person authorized to s ign payment vouchers (as evidenced by an executed S.F. 1194) shall be typed in block 11. and the person so authorized shall affix his signature in ink in block 10. 12. & 13. The instructions provided in 10. and 11. above shall apply, with the exception that the countersignature shall be accomplished by a person other than the person who signed in block 10 •. 14. Leave blank--to be completed by the Federal Reserve Bank. 7/68 & 15. Page 1 2 HUD-Wash.,. D . C . �1900 .4 10. 11. DISTRIBUTION OF FORM 'lUS 5401. distributed as follows: The executed Form 'lUS 5401 sha.11 be a. Original and Duplicate - The recipient organization- shall present these forms to the connnercial bank for transmission to the Federal Reserve Bank or branch which services the local commercial bank. b. Triplicate - The recipient organization shall transmit this copy directly to the HUD office which issued the letter of credit on the same day that the payment voucher is presented to the commercial bank. c. Quardruplicate - The recipient organization shall retain this copy for its files. REPORTING TO HUD (HUD-267) . a. Each calendar quarter, the recipient organization shall submit, in duplicate, a Status of Funds Report Relating to Letters of Credit, HUD-267, to the HUD office which issued the letter of credit. The report shall be mailed no later than the tenth day of the month following the close of the calendar quarter. b. On the following page is a facsimile of the Status of Funds Report Relating to Letters of Credit, HUD-267, (Figure 4) and an explanation of what information shall be entered in the numbered blocks and lines . Page 13 HUD-Wash., D. C. 7/68 �Figure 4 F r, rm Arirr f) v'?'1 8udq (•I A ,i r ~ r111 No 63 · P 1193 U .S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ST AT US OF FU N DS !REPORT REL A TING TO LETTE RS OF CREDIT t . NAME OF RECIPIENT ORGANIZATION 2, COMPLETE MA I LINO ADDRESS AN O ZIP CODE I 3. CONTRACT AN D P ROJECT NUMBERS CONTRACT NUMBER 4 , LETT E R OF C REDIT NUMBER 1·· , REPORT R CALENDAR QUARTERFO ENDED PROJEC T NUMBER RECAPITUL AT ION OF AC TI ON S E F FEC TI NG THE CASH POSI T ION OF T H E PROJEC T EXP L ANA T ION FIRST MONTH 6. TO T AL CASH ON HAND BEGINNING OF MONTH SECOND MONTH $ $ $ J :}:][ : "1::1 A DO C ASH REC E I PT S: \:.

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7. FE'.JERAL 8. N ON-F EDERAL O. LES S: TOT AL CASH DI S BURSEMENTS 1 0. T OTAL CASH ON HAND END OF MONTH $ $ II. N UMBER OF P AY MENT VO UCHERS E X ECU T ED

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cash re quirement s for the ensuing days. A V AILABI LI T Y OF FU NDS FRO M LETT ERS OF CREDIT C UMU L AT I V E TO DATE EXPLANATION $ 12. AMOUN T OF ORIGINA L LETTER OF C REDIT (P er A me ndmcnt to Letter of Credit} 13 . ADO: INCREAS E S 14 . L ESS: DECREASES 1 ,. LESS: TOT AL ORAWDOWN (Per Amendme nts to L e tt er of Credi t} 1 6, TOTAL AVAILABIL ITY (E ndi ng) $ CE RT I F IC AT IO N I certify that t he above information is true and correct . 17 . DATE REVIEWED r·· 1g, TY PED NAME ANO TITLE S I GNA TURE F OR HUD USE ONLY DA T E HU 0-267 (4 -68) I SIGNATURE O F REVIEWING OFFICIAL HUD-Wash., D.C. 221524- P HUD-Wa sh., D. C. 7/68 Page 14 TYP ED NAME ANO TI TLE OF RE V I E W IN G OFFICIAL 228254-P HUD-2 1D (10 -67) �1900 . 4 Preparation of HUD-267. Block Number Explanation 1. Enter the name of the recipient organization which is submitting the report. 2. Enter the mailing address of the r e cipient organization. 3. Enter the project and contract number. In instances where a letter of credit has been issued to cover more than one project, a ·separate report shall be submitted covering each project. 4. Enter the letter of credit number to which this report applies. 5. Enter the last month, day and year of the calendar quarter covered by this report. 6. Enter the total amount of cash on hand at the beginning of the month. This shall include all funds on deposit , in transit, imprest funds, undeposited collections, etc. 7. Enter the tot&l. of all Federal funds received during the month. B. Enter the total of all non-Federal funds received during the month. 9. Enter the tot&l. cash disbursements made during the month. 10. Enter the total amount of cash on hand at the end of the month. This shall include all funds on deposit, in transit, imprest funds, undeposited collections, etc. Complete the footnote indicated by an asterisk(*) as of the end of the calender quarter. 11. Enter the total number of Forms '!US 5401 issued during the month. 12. Enter the amount of authorization as shown on the first letter of credit. This amount shall remain constant. 13. Enter the cwmtl..ative a.mount of increases resulting from all amendments to the letter of credit issued through the reporting date. 14. Enter the cumulative amount of descreases r esulting from all amendments to the letter of credit issued through the reporting date •. P·age 15 H UD-Wash . , D. C. 7/ 68 �ll900.4 Block Number Explanation 15. Enter the cumulative amount of drawdowns through the reporting date. 16. Enter the amount computed by adding the amounts in blocks 12. and 13. and subtracting the amounts in blocks 14. and 15 •• 17. Enter the actual date that the report is submitted to the appropriate HUD office. 18. The authorized official of the recipient organization shall affix his signature in ink after he is satisfied that the report is correct. 19. The name and the title of the official signing the report on line 18. shall be typ~d herein. 7/68 Page 16 · HUD-Wash., D. C. �