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This interim rule revises the CDBG regulations to align CDBG accounting methods to the grant accounting system specified in HUD’s handbook on CDBG grants. The proposed rule would provide that, beginning with fiscal year 2015 grants, grantees will be required to track their obligations and expenditures of funds for each specific grant year. Currently, grantees have the option to track expenditures in a cumulative manner. Although, under the current regulations, grantees have the option to track expenditures in a cumulative manner, almost 90 percent of grantees adhere to the grant accounting system in HUD’s handbook on CDG grants. Given that the overwhelming majority of CDBG grantees use the grant accounting system (the use of which is also strongly recommended by HUD’s Office of Inspector General) HUD believes that it has the justification necessary to issue this rule as an interim rule. While a small percentage of CDBG grantees are not using this system, it is not a system that is unfamiliar to them. This interim rule would make the necessary regulatory changes to conform to the grant accounting system, such as the time periods of affected grants, records retention, and the calculation of the cap on administrative and planning expenses. These changes are necessary to effectively implement the accounting changes.