Community Development:

Weak Management Controls Compromise Integrity of Four HUD Grant Programs

RCED-99-98: Published: Apr 27, 1999. Publicly Released: Apr 29, 1999.

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Pursuant to a congressional request, GAO provided information on whether controls are in place to ensure that block grant programs' objectives are being achieved and that funds are being managed appropriately, focusing on whether: (1) the Department of Housing and Urban Development's (HUD) on-site monitoring of grantees under the Grants Management System is adequate; and (2) the Integrated Disbursement and Information System provides the data HUD needs to accurately assess grantees' performance.

GAO noted that: (1) while the Grants Management System provides a logical, structured approach to managing the four block grant programs, HUD's monitoring under the system--including on-site monitoring of grantees and the Integrated Disbursement and Information System--does not ensure that the programs' objectives are being met and that grantees are managing their funds appropriately; (2) HUD considers its on-site monitoring of grantees essential, but GAO found this monitoring is inadequate; (3) the five field offices GAO visited (accounting for about 20 percent of all block grant funds in fiscal year (FY) 1998, or $1.18 billion) conduct on-site monitoring infrequently because of a shift to a more collaborative relationship with the grantees and because of a lack of resources, according to the directors of the field offices; (4) furthermore, on-site monitoring seldom targets the grantees that receive the poorest evaluations from the field officers compared with other grantees, and this monitoring is not uniform or comprehensive because the field officers lack specific guidance; (5) the reviews of some grantees conducted by GAO and others, especially HUD's Inspector General, have identified significant problems in grantees' finances and performance; (6) while such reviews are not generalizable to all block grant programs, these reviews, along with the breakdowns in monitoring, call into question the integrity of programs funded at nearly $6 billion in FY 1998, including their safeguards against fraud, waste, and abuse; (7) for its part, HUD's Integrated Disbursement and Information System does not provide the information HUD needs to accurately assess grantees' performance and thus does not compensate for these breakdowns in monitoring; (8) fraught with major design flaws, the information system makes the process for establishing and maintaining accounts difficult and provides ample opportunity for major problems with entering data, does not allow such problems to be corrected easily, cannot track the program income from the revolving funds that grantees establish, does not provide timely and accurate information, and has difficulty producing reports; and (9) GAO also determined that the security controls for the information system are weak and therefore do not provide assurance that the system is safe from fraud and abuse.

Recommendations for Executive Action

  1. Status: Open

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

    Recommendation: Because IDIS has not proven to be a useful tool in managing grantees, GAO recommends that the Secretary of Housing and Urban Development direct the Assistant Secretary of Community Planning and Development to consider whether it is more cost-effective to modify IDIS or replace it. After this determination is made and before IDIS is used as the base for developing the new grants management information system for all of HUD's 51 grant programs, the problems GAO identified with IDIS should be corrected. HUD should ensure that the new system does not require redundant data entry, reduces the time needed to enter information, readily allows timely corrections of data, provides a straightforward method of accounting for program income from revolving funds, provides timely and accurate information on grantees' performance, and readily produces reports.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Open

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

    Recommendation: In order to ensure that the Grants Management System identifies problems in achieving program objectives and safeguarding grant funds and protects the integrity of the block grant programs, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Community Planning and Development to improve the Grants Management Process information system by providing guidance to the field officers to ensure that they are entering information consistently.

    Agency Affected: Department of Housing and Urban Development

  3. Status: Open

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

    Recommendation: In order to ensure that the Grants Management System identifies problems in achieving program objectives and safeguarding grant funds and protects the integrity of the block grant programs, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Community Planning and Development to direct desk officers within the Office of Community Planning and Development at headquarters to visit their field offices to better assess how well the field offices are monitoring their grantees, to determine what problems the field offices are experiencing, and to provide technical assistance.

    Agency Affected: Department of Housing and Urban Development

  4. Status: Open

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

    Recommendation: In order to ensure that the Grants Management System identifies problems in achieving program objectives and safeguarding grant funds and protects the integrity of the block grant programs, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Community Planning and Development to conduct analyses to determine the staffing and travel funds that may be required to better support the monitoring of grantees and direct available resources to the field offices as needed.

    Agency Affected: Department of Housing and Urban Development

  5. Status: Open

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

    Recommendation: In order to ensure that the Grants Management System identifies problems in achieving program objectives and safeguarding grant funds and protects the integrity of the block grant programs, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Community Planning and Development to emphasize the importance of on-site monitoring by specifying the level of grantee performance that requires on-site monitoring and the steps that should be taken in conducting such monitoring.

    Agency Affected: Department of Housing and Urban Development

  6. Status: Open

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

    Recommendation: GAO recommends that the Secretary of Housing and Urban Development, regardless f the decision on the future of IDIS, immediately take steps to ensure that access to IDIS is limited to authorized users and that those users have access levels appropriate to the duties they perform. Steps should also be taken to ensure that the security officer for IDIS is fully aware of the responsibilities that must be carried out and has the appropriate training and staff for those responsibilities.

    Agency Affected: Department of Housing and Urban Development

 

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