We audited the U.S. Department of Housing and Urban Development (HUD), Office of Community Planning and Development’s (CPD) oversight and monitoring of its Community Development Block Grant Disaster Recovery (CDBG-DR) slow-spending grantees. This was a self-initiated audit consistent with our oversight activities and current top priority areas. Our objective was to assess CPD’s monitoring and oversight tools related to the progress of grant expenditures and determine the status of the grants and impacts of COVID-19 on grantee spending.
CPD has tools available for the oversight and monitoring of its grantees. The tools mainly assist in evaluating or tracking the progress of the grants. While one tool identified slow spenders on a short-term basis, it did not help assess slow spending in the long term. We identified opportunities for CPD to enhance its (1) monthly CDBG-DR grant financial report, (2) use of Disaster Recovery Grant Reporting (DRGR) system flags, (3) use of grantee expenditure projections, (4) documentation for quarterly performance report reviews, and (5) documentation for monitoring reviews and updating the related exhibit (questionnaire). Enhancing these tools may allow CPD to provide more effective oversight of grant expenditures and better assist its grantees with the progress of their spending. It will also assist in preventing the recapture of funds from communities with needs that can benefit from these funds. As of July 30, 2021, more than $3.7 billion remained unspent of the $18.5 billion appropriated in CDBG-DR funds for disasters that occurred from 2011 through 2016, and the pandemic has slowed the progress of these grants.
We recommend that the Deputy Assistant Secretary require CPD to (1) continue developing proper methodology to identify slow spenders and update policies, procedures, and its monitoring exhibit; (2) establish a reasonable timeframe for grantees to adequately address the system flags in DRGR, and resolve or remediate outstanding flags; (3) require updated grantee projections; (4) sufficiently document its basis for conclusions in its monitoring and quarterly performance reviews; and (5) consider grantee suggestions to assist with the progress of spending funds.
Recommendations
Community Planning and Development
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Status2022-AT-0001-001-AOpenClosedClosed on Abril 06, 2022
Revise its methodology to identify slow spenders, including appropriate baselines and the definition of slow spenders.
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Status2022-AT-0001-001-BOpenClosedPrioridadPriority
We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.
Closed on Septiembre 29, 2023Update its policies and procedures for tracking expenditures related to slow-spending grantees, including steps for assisting the grantees to expedite spending (including the grantee’s steps or actions to address slow spending), identifying the reasons for the delays with the grant, and documenting the outcome of its efforts.
Corrective Action Taken
CPD updated guidance addressing grantee slow spending through technical assistance, including actions grant managers can take when grantee expenditures do not appear to be “on pace” to meet the expenditure deadlines, and demonstrated it is providing technical assistance to grantees during monitoring. CPD also issued an additional Standard Monitoring Findings and Corrective Actions Guide for its staff to promote a consistent framework for crafting monitoring findings and the corrective actions needed to resolve identified deficiencies and prevent future occurrences. This new resource provides general guidance and examples for presenting Finding components in monitoring reports for fourteen topics including, “Failure to Meet Timeliness of Expenditures Requirements.
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Status2022-AT-0001-001-COpenClosed
Establish a reasonable timeframe for grantees to resolve DRGR flags or at a minimum, if a flag cannot be resolved within the established timeframe, have the grantee provide a remediating comment explaining why the flag could not be resolved and a proposed timeline for resolution.
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Status2022-AT-0001-001-DOpenClosedClosed on Febrero 28, 2023
Resolve or remediate outstanding flags for grants B-12-MT-01-0001, B-13-MS-36-0002, B-16-MH-48-0001, and B-16-DL-12-0001 in DRGR.
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Status2022-AT-0001-001-EOpenClosedClosed on Abril 22, 2022
Require updated projections for grants B-12-MT-01-0001, B-13-MS-36-0002, and B-16-DL-12-0001 and provide assistance to the grantees to ensure that the expenditure deadlines will be met.
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Status2022-AT-0001-001-FOpenClosedClosed on Septiembre 29, 2023
Update its policies and procedures to require grantees to identify the reason for variances between the actual and projected expenditures to enhance CPD’s oversight.
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Status2022-AT-0001-001-GOpenClosedClosed on Febrero 28, 2023
Update monitoring exhibit 6-1 to include (1) reasons for differences between actual and estimated projections and (2) a question to determine whether the grantee is meeting the timelines established and if the timelines are not met, providing reasons.
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Status2022-AT-0001-001-HOpenClosedClosed on Septiembre 21, 2022
Update policies and procedures to require CPD staff to sufficiently document its basis for conclusions to meet the monitoring handbook and QPR checklist requirements and intentions.
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Status2022-AT-0001-001-IOpenClosedClosed on Agosto 08, 2023
Consider suggestions made by grantees to assist with the progress of spending funds and provide support for the guidance it plans to share with grantees based on these suggestions. (See bullets under Grantees Generally Considered CPD’s Assistance With the Progress of Their Grants Helpful.)