HUD Funds Eligible Projects According to Communities' Priorities

RCED-00-191: Published: Jul 24, 2000. Publicly Released: Jul 24, 2000.

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Stanley J. Czerwinski
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Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) funding of Stewart B. McKinney Homeless Assistance Act projects, focusing on: (1) what process HUD uses to select projects for funding, whether this process is consistent with relevant statutes, and how HUD treats new projects and projects that have been funded in the past (renewal projects); (2) the extent to which HUD funds projects that communities rank as high-priority under their Continuums of Care, and why some high-priority projects are not funded while some low-priority projects are funded; and (3) whether communities face any common problems when applying for funds from HUD, and what actions are needed to correct these problems.

GAO noted that: (1) HUD selects projects for funding on the basis of a three-step process that is consistent with the requirements in relevant statutes, and it does not distinguish between new or renewal projects; (2) under the selection process, HUD considers: (a) communities' overall strategies for addressing homelessness; (b) whether the projects meet the applicable program standards set in the McKinney Act; and (c) the relative need for homeless assistance funds for each community; (3) HUD ranks all eligible projects and awards grants to these projects in the order they are ranked nationally, until the funds available for the competition are depleted; (4) most projects that communities ranked as high priority were awarded funding in 1998 and 1999; (5) for example, in 1999, 92 percent of the projects that were ranked in the top 25 percent of each community's priority list were funded, for those communities that had between 4 and 16 projects on their list; (6) however, for those communities that had three or fewer projects on their priority list, the project identified as the top priority was funded between 34 to 70 percent of the time; (7) furthermore, in those instances in which high-priority projects were not funded under the competition and low-priority projects were funded, it was always because the higher-ranked projects did not meet the applicable program's eligibility requirements; (8) most applicants generally understand the application and paperwork requirements necessary to compete for HUD grants; (9) however, more than one third of the communities that applied for funds in 1999 had significant problems in understanding the application requirements or completing the paperwork; (10) representatives of these communities cited a variety of difficulties in completing the application requirements and in getting information from HUD field office staff about the program and these requirements; (11) for example, some communities reported difficulties caused by the time-consuming and resource-intensive paperwork requirements and the lack of clear instructions and definitions, as well as difficulty in understanding HUD's selection process; and (12) community representatives GAO spoke with suggested a number of actions that HUD could take to alleviate the problems they experienced, such as better training for applicants and field office staff, more use of technology to provide access to information, and a simpler application format.

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