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Highlights

Congress established the HOPE VI program to revitalize severely distressed public housing. In fiscal years 1993 to 2001, the Department of Housing and Urban Development (HUD) awarded approximately $4.5 billion in HOPE VI revitalization grants. The Ranking Minority Member, Subcommittee on Housing and Transportation, Senate Committee on Banking, Housing, and Urban\ Affairs, asked GAO to examine HUD's process for assessing grant applications, the status of work at sites for which grants have been awarded, and HUD's oversight of HOPE VI grants.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development 1. To improve its selection and oversight of HOPE VI grants, the Secretary of Housing and Urban Development should continue to include past performance as an eligibility requirement in each year's notice of funding availability.
Closed - Implemented
In its fiscal year 2004 notice of funding availability (NOFA) for HOPE VI revitalization grants, published in November 2004, HUD included past performance as a threshold eligibility requirement. Specifically, the NOFA stated that an application would not be rated or ranked and would be ineligible for funding if the applicant had an existing HOPE VI revitalization grant and (1) the grant development was delinquent due to actions or inactions that were not beyond the control of the grantee and (2) the grantee was not making substantial progress toward eliminating the delinquency.
Department of Housing and Urban Development 2. To improve its selection and oversight of HOPE VI grants, the Secretary of Housing and Urban Development should clarify the role of HUD field offices in HOPE VI oversight and ensure that the offices conduct required annual reviews of HOPE VI grants.
Closed - Implemented
In March 2004, HUD published new guidance on its HOPE VI web site that clarifies the role of HUD field offices in HOPE VI oversight and changes the annual review requirements. The guidance stresses that HUD field offices, along with the Office of Public Housing Investments in HUD headquarters, have major responsibilities in the management and monitoring of HOPE VI revitalization grants. According to the guidance, these field office responsibilities include conducting an annual risk assessment for each HOPE VI grant in its jurisdiction. The risk assessment should consider such factors as missed deadlines and adverse publicity and should be used to determine both whether an on-site monitoring review should be conducted as well as which areas of the HOPE VI grant should be reviewed. Additionally, the risk assessment should be used to determine if a remote review or other off-site monitoring should be performed. According to the guidance, each HOPE VI grant should receive an initial review within 18 months of the grant award, and each grant should be reviewed at least one time during the balance of the grant. The published guidance includes a risk assessment form and sample monitoring review reports.
Department of Housing and Urban Development 3. To improve its selection and oversight of HOPE VI grants, the Secretary of Housing and Urban Development should develop a formal, written enforcement policy to hold public housing authorities accountable for the status of their grants.
Closed - Implemented
In March 2004, HUD reported that it had developed an enforcement policy to hold public housing authorities accountable for the status of their grants and shared it with grantees in December 2003. The December 2003 letter that was sent to grantees stated that HUD had been increasing its focus on HOPE VI grantees' timely completion of their HOPE VI developments and noted that it had recently sent five grantees letters advising them that, due to delays in implementing their grants, they were in default of their HOPE VI Grant Agreement. The five letters also stated that the Department would deduct funds from their HOPE VI grants if they did not meet their implementation checkpoints within 90 days. The December 2003 letter reminded each grantee that, if one of its locked checkpoints was not completed by the planned date, it would be in default of its HOPE VI Grant Agreement and might receive a default letter similar to those already sent to other grantees. In order to avoid default, the letter encouraged grantees to confirm or report their past, completed locked checkpoint dates and continues to report new locked checkpoint completions as soon as each locked checkpoint activity had been completed.

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