We audited the U.S. Department of Housing and Urban Development’s (HUD) Emergency Solutions Grants Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (ESG-CV) program. Our audit objective was to determine what challenges ESG-CV grant recipients faced in implementing the program and using grant funds. We used a survey questionnaire to gather feedback and insight directly from the 362 recipients of ESG-CV grants. At the time we initiated this audit in July 2021, ESG-CV grant recipients had spent $563,178,336 of available $3.96 billion grant funds. We performed this audit to assist HUD’s Office of Community Planning and Development in identifying opportunities to improve the timeliness and use of ESG-CV grant funds.

Our survey questionnaire of the ESG-CV grant recipients found that they faced challenges in implementing the program and using grant funds. The grant recipients needed an extension beyond the spending deadline of September 30, 2022, to use a majority or all of their ESG-CV funds. HUD subsequently extended the spending deadline to help address this issue. The top challenges identified by the grant recipients included staff capacity and coordinating with other sources of pandemic related funding. In addition, a majority of the grant recipients that provided ESG-CV funds to subrecipients stated that the pandemic impacted their ability to effectively monitor their ESG-CV subrecipients. As a result, while HUD has taken action to help address the spending deadline concerns, the grantees’ challenges with capacity, multiple funding sources, and monitoring their subgrantees may increase the risk of misuse of the funds. HUD can use the results of our survey questionnaire to potentially improve the continued implementation of the ESG-CV program and to inform its risk assessment of ESG-CV grantees.

We recommend that the Principal Deputy Assistant Secretary for Community Planning and Development consider including grant recipients’ challenges with capacity, multiple sources of funding, and subgrantee monitoring as part of CPD’s risk assessments.