Community Development:

Distribution of Small Cities Funds by Pennsylvania

RCED-89-111: Published: May 3, 1989. Publicly Released: Jun 2, 1989.

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In response to a congressional request, GAO reviewed the methodology: (1) Pennsylvania used to distribute Small Cities and Community Development Block Grant Program funds; and (2) the Department of Housing and Urban Development (HUD) and Pennsylvania used to develop low- and moderate-income population statistics.

GAO found that: (1) Pennsylvania's methodology for estimating the percentage of low- and moderate-income persons was not consistent with existing statutes and resulted in a higher number of communities that were predominately low and moderate income; (2) HUD estimates were consistent with the statutes and included single persons over 62 years of age; and (3) HUD used census data to update its income criteria, including college and university students living in group quarters, which may have increased the estimated number of low- and moderate-income persons in certain communities and made the communities appear more distressed. GAO also found that: (1) HUD believed that Pennsylvania's methodology overestimated the low- and moderate-income population in some areas, and it required Pennsylvania to use other estimates to distribute Small Cities funds; (2) Pennsylvania officials stated that, although they distributed 1987 and 1988 funds using their methodology, they decided to use HUD estimates to distribute, even though they did not agree with the estimates; and (3) the amount of federal funds allocated to Pennsylvania for the Small Cities Program would not change regardless of the method used.

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