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FY 2006 HOMELAND SECURITY GRANT PROGRAM - DECEMBER 2, 2005 manner. Territorial Pass-Through Requirements Due to the unique nature of the Territorial governments in Guam, American Samoa, the U.S Virgin Islands, and the Commonwealth of the Northern Mariana Islands, no pass-through requirements will be applied to those Territories. However, these Territories are expected to take into account the needs of local communities prior to making funding distribution decisions. Memorandum of Understanding (MOU) Requirements For any HSGP programs involving pass-through of funds, the State may retain some or all of the local unit of government or Urban Area's allocation of grant funds for expenditures made by the State on behalf of the local unit of government or Urban Area. This may occur only if requested in writing by that local unit of government or Urban Area. States holding grant funds on behalf of local units of government or Urban Areas must enter into a formal MOU with the local unit of government or Urban Area specifYing the amount of funds to be retained by the State and the intended use of funds. If an MOU is already in place from FY 2005 for existing efforts, G&T will continue to recognize the MOU for FY 2006. If any modifications to the existing MOU are necessary to reflect new initiatives, States should contact their assigned Preparedness Officer. Any new MOU request must be initiated by the local unit of government or Urban Area. States are encouraged, but not required, to submit these MOUs to their G&T Preparedness Officer for review to ensure compliance. A final, executable copy of the MOU will be kept on file with the SAA and be made available to DHS upon request. A model is available in Appendix C. C.3. Drawdown of Funds Grantees and subgrantees may elect to drawdown funds up to 120 days prior to expenditure/disbursement. However, G&T strongly encourages recipients to drawdown funds as close to expenditure as possible to avoid accruing interest. Funds received by both grantees and subgrantees must be placed in an interest-bearing account and are subject to the rules outlined in the Uniform Rule 6 CFR part 9, New Restrictions on Lobbying, and the Uniform Rule 28 CFR Part 70, Uniform Administrative Requirements for Grants and Agreements (Including Subawards) with Institutions of Higher Education. Hospitals and other Non-profit Organizations, at http://www.gpoaccess.gov/cfr/index.html. These guidelines state that subgrantees are required to promptly, but at least quarterly, remit interest earned on advances to: United States Department of Health and Human Services Division of Payment Management Services P.O. Box 6021 Rockville, MD 20852 The subgrantee may keep interest amounts up to $100 per year for administrative expenses for all Federal grants combined. Please consult the G&T Office of Grant Operations (OGO) PREPAREDNESS DIRECTORATE'S OFFICE OF GRANTS AND TRAINING 28