Recovery Act:

Opportunities Exist to Increase the Public's Understanding of Recipient Reporting on HUD Programs

GAO-10-966: Published: Sep 30, 2010. Publicly Released: Oct 20, 2010.

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The American Recovery and Reinvestment Act of 2009 (Recovery Act) has provided about $6 billion in grants for three Department of Housing and Urban Development (HUD) programs that fund housing or community development. As of March 31, 2010, HUD's Capital Fund awarded nearly $3 billion in grants to 3,134 public housing agencies, the Community Development Block Grant-Recovery (CDBG-R) awarded about $1 billion to 1,167 recipients, and the Tax Credit Assistance Program (TCAP) awarded $2.25 billion to 52 state housing finance agencies. The act requires recipients to report specific information on fund use. Recipients began reporting in October 2009. This information is publicly available on Recovery.gov, the official Recovery Act Web site. As requested, for these three HUD programs, the report (1) examines what information recipients are required to report as a part of their descriptions of funded projects, and (2) assesses the extent to which descriptions of a representative sample of 219 grants in Recovery.gov are transparent in providing a basic understanding of grant activities and expected outcomes. GAO reviewed requirements for reporting in the act and Office of Management and Budget (OMB) and HUD guidance.

Recovery.gov was designed to track large sums of Recovery Act funds that are being disbursed to thousands of recipients, while also making these efforts more transparent to the public than previous efforts have been. Implementing this system was an extensive undertaking across the federal government and represents a step forward in federal spending transparency. The Recovery Act requires recipients to report specific information about funded projects and activities, including the total amount of Recovery Act funds received, associated obligations and expenditures, and a detailed list of the projects and activities funded. For each project or activity, the detailed list must include its name, description, and completion status. To facilitate implementation of the Recovery Act, OMB created government-wide guidance, including memorandums and a data dictionary. While some OMB guidance reiterates that recipients list all projects and activities funded, its implementing instructions advise recipients to summarize. OMB officials have stated that its broad guidance could not address unique program characteristics effectively and anticipated that agencies would provide more specific guidance. HUD issued limited program-specific guidance, which largely restated the requirements in OMB's data dictionary. The reporting guidance generally advised recipients to summarize or use standard, suggested language. OMB and HUD guidance also did not consistently clarify key terms, such as "project" or "primary place of performance." Some grant recipients followed OMB and HUD guidance, which instructed them to report broad, summary information rather than information on specific projects and activities, as specified in the act. Because the reporting guidance provided did not advise recipients to report details for each project or activity funded or clarify key terms, recipients may have interpreted the guidance differently and reported information inconsistently for similar types of programs. GAO estimated that, for the three selected programs--the Capital Fund, CDBG-R, and TCAP--22 percent of grant descriptions available for the reporting quarter ending March 31, 2010, had reasonably clear and specific information on the attributes GAO evaluated--purpose, scope, location, award amount, nature, expected outcomes or outputs, and status--for the grant and for the projects and activities funded through the grant. Another estimated 55 percent partially met that criteria because the descriptions had at least some information on the attributes evaluated, but to some extent this information was missing, nonspecific, or unclear for the grant, the projects and activities funded through the grant, or both. An estimated 23 percent of the grant descriptions did not meet the criteria. They generally lacked information on these attributes or provided information that was unclear or overly technical for the grant, the projects and activities funded through the grant, or both. GAO found that HUD's databases contained information to improve the descriptions on how funds were used in 85 percent of the grants that partially met or did not meet the criteria. GAO recommends that the HUD Secretary, taking into account the desire for increasing public understanding of how Recovery funds are used and concerns over the cost of reporting, (1) provide clarification of OMB FederalReporting.gov guidance so it better conveys the Recovery Act requirement for recipients to report key information for the specific projects and activities funded, and to define key terms for each program; (2) consider options for reviewing the content of narrative descriptions submitted by recipients into FederalReporting.gov in a targeted manner to ensure that recipients have entered clear and complete information about funded projects and activities; and (3) encourage recipients to leverage other sources of information using links to relevant Web sites.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In October 2010 HUD's American Recovery and Reinvestment Act (ARRA) team sent a memo to HUD program offices emphasizing the need for HUD to demonstrate (1) insistence on recipient compliance with reporting requirements as a necessary condition to achieve transparancy, and (2)the importance of prompt enforcement actions in response to noncompliance with the reporting requirements. Additionally, HUD's ARRA team began sending program liaisons excel reports that clearly identify grantee reported narrative descriptions with a high risk of being insufficiently informative. As a result of these steps, HUD helped increase the likelihood that recipients enter clear and complete information about funded projects and activities.

    Recommendation: To increase public understanding of how Recovery funds are used and concerns over the cost of reporting, the Secretary of the Department of Housing and Urban Development, in consultation with OMB, should provide clarification of OMB FederalReporting.gov guidance (1) so that it better conveys the Recovery Act requirement for recipients to report key information for the specific projects and activities funded, and (2) so that, for each program, it defines key terms (project, primary place of performance, and subrecipient primary place of performance).

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Implemented

    Comments: In December 2010, HUD began issuing updated program-specific guidance. The guidance includes clarification on how projects and activities should be described to improve transparency. Additionally, the guidance clarifies how key terms, such as "project" and "place of performance" should be described. As a result of HUD's clarified program-specific guidance, HUD helped to increase the likelihood that narrative descriptions would more transparently convey the location and type of work funded.

    Recommendation: To increase public understanding of how Recovery funds are used and concerns over the cost of reporting, the Secretary of the Department of Housing and Urban Development, in consultation with OMB, should consider options for more effectively reviewing the content of narrative descriptions submitted by recipients into FederalReporting.gov in a targeted and cost-effective manner to help ensure that recipients have entered clear and complete information about the funded projects and activities.

    Agency Affected: Department of Housing and Urban Development

  3. Status: Closed - Implemented

    Comments: HUD took steps to improve its guidance related to American Recovery and Reinvestment Act (ARRA) reporting. HUD's 2012 and 2013 program-specific guidance emphasized the importance of providing clear and complete information on the award's purpose, scope and nature of activities, outcomes and status of activities. Recognizing that there are character limitations on narrative responses, HUD also advised grantees to include the grantee's website address and any additional websites that provide detailed grant or project level information.

    Recommendation: To increase public understanding of how Recovery funds are used and concerns over the cost of reporting, the Secretary of the Department of Housing and Urban Development, in consultation with OMB, should encourage recipients to leverage other sources of existing information, such as by providing links to agency or recipient Web sites, to further enhance the transparency of the information they enter in FederalReporting.gov.

    Agency Affected: Department of Housing and Urban Development

 

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