N.Y. Comp. Codes R. & Regs. tit. 9, § 2834.2 – Program funds.

(a) Funds awarded to the qualified applicant may be in the form of a grant, a loan, or a combination of both.
1. (1) Program funds shall be for payment of material expenses related to the proposed RARP incurred subsequent to contract execution, including:
  1. (i) The costs of acquisition, construction, repair, renovation, rehabilitation, demolition, clearance and sealing of any building or other structure, provided that such funds may not be used for planning of any such activity or for operating an office to be used by the qualified applicant and, provided further that, no funds shall be used for acquisition unless such acquisition is in conjunction with the construction, repair, renovation, rehabilitation, demolition, clearance, or sealing of any building or of the structure.
  2. (ii) Fees to consultants retained by the qualified applicant to provide the eligible services listed in subdivision (a) of this section.
2. (2) In no event shall program funds be used for:
  1. (i) payment of salaries and wages to employees of the qualified applicant, unless specifically authorized and set forth in the RARP Program contract; or
  2. (ii) other costs or expenses directly related to the applicant's employees or consultants, including office rentals, office equipment, fringe benefits, office expenses or other administrative expenses.
(b) Use of funds.
(c) All contracts entered into by the applicant for any services which are to be paid for, in whole or in part, with program funds shall be arm's-length transactions and shall be entered into only after an appropriate evaluation of the experience and qualifications of the contracting form or individual. All firms and individuals with whom such contracts are executed shall be experienced and qualified, and the contract price shall be fair and reasonable. The commissioner shall have the right to withhold funds for payment and/or cancel any contract that, in the commissioner's sole judgment, does not comply with this subdivision.
(d) The qualified applicant shall not enter into any other contract, lease or other agreement whose term or effect commit the use of program funds for a period of time in excess of the term of the performance contract.
(e) Payments shall be made by the division to the qualified applicant as needed to compensate such applicant for work completed on the proposed project. The division may withhold payments if all required documentation is not presented or is incomplete.
(f) The qualified applicant shall maintain accurate books and records of all financial transactions which relate to the performance of the contract, in accordance with generally accepted accounting principles, and make these records available to the division upon request.