Improvements Needed in Selecting and Processing Urban Development Action Grants

CED-79-64: Published: Mar 30, 1979. Publicly Released: Mar 30, 1979.

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An examination of the Urban Development Action Grant (UDAG) Program focused on application review and approval procedures at Housing and Urban Development (HUD) headquarters for 18 selected grants from the April 6, July 11, and August 2, 1978, funding rounds. The 154 grants awarded on those dates were the first grants awarded under the UDAG program. The basis for grant approval, rejection, and holdover decisions was evaluated. The 18 grants reviewed consisted of 6 new metropolitan city applications, 7 metropolitan city applications held over from earlier rounds, and 5 new small city applications.

Of the 18 grants reviewed, 4 were questionable in that: 2 were made without any substantial commitment of private resources; 1 was apparently not needed to stimulate private investment; and 1 primarily benefited a private firm. There was little or no documentation beyond the area/regional office level to show the basis for the funding decisions made and the disposition of conflicting area/regional comments on the proposed grants. Grant funds were not always released promptly.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of HUD should reassess the ways UDAG funds are being used. Appropriate steps should be taken to establish rigorous, well-documented HUD reviews to assure that UDAG funds are used in full accord with program objectives. The Secretary should define more precisely what constitutes adequate private commitments; stimulation of new or increased private investment; and benefits to the community. The Secretary should further direct that files on all UDAG grants include sufficient documentation to justify and explain decisions made regarding funding approvals and disapprovals, including the disposition of adverse and conflicting HUD area and regional office evaluations of grant proposals. Grant funds should be released in a timely manner.

    Agency Affected:

 

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