Economic Development:

HUD Needs To Better Determine Extent of Community Block Grants' Lower Income Benefits

RCED-83-15: Published: Nov 3, 1982. Publicly Released: Nov 3, 1982.

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GAO conducted a review to determine whether the information which the Department of Housing and Urban Development (HUD) uses accurately reflects the extent to which the Community Development Block Grant (CDBG) Program meets its legislative objective of benefiting lower income persons.

HUD has a basic responsibility for overseeing how entitled cities use their block grants and for reporting to Congress annually on block grant accomplishments. In nine cities which GAO reviewed, it found that the benefit information reported to HUD by the cities often did not accurately reflect the extent to which low- and moderate-income persons benefit from the CDBG program. Grantees used inconsistent methods of identifying and reporting lower income beneficiaries and, because of weak oversight, problems in grantee's programs were not identified or performance information was not verified. Part of the problem is the inherent difficulty in determining precisely who benefits from certain types of community development activities without conducting painstaking and expensive research. Since HUD regulations do not require cities to have income eligibility criteria for housing rehabilitation, some cities use their own income eligibility criteria, and some use other criteria, such as residence in a targeted area. GAO also found that the HUD block grant annual report to Congress does not adequately reflect actual grant benefits, a weakness which limits the report's usefulness to Congress. HUD based its report primarily on the less precise benefit estimates of planned activities rather than on actual benefits of completed activities. In addition, the annual report does not contain information on how HUD oversees and manages its block grant programs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary, HUD, should require area offices to verify the information reported by entitlement grantees as benefits provided to lower income persons by reviewing the grantees' methodology for developing benefit data and by examining a sample of the detailed data the grantee used to support its beneficiary claims.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary, HUD, should: (1) use actual benefit data as the basis for reporting on the extent to which CDBG funds are spent on lower income people; and (2) include information in the annual report on area office monitoring activities, including scope, frequency, and results.

    Agency Affected: Department of Housing and Urban Development

 

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