Public Housing:

HUD's Oversight of HOPE VI Sites Needs to Be More Consistent

GAO-03-555: Published: May 30, 2003. Publicly Released: Jun 30, 2003.

Additional Materials:

Contact:

David G. Wood
(202) 512-6878
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

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.

HUD has generally used the same core rating factors to assess HOPE VI grant applications--need, capacity, quality, and leveraging. However, HUD has, over time, increased the requirements that housing authorities must meet for each of these factors in order to make better selection decisions. Although authorities' historical program performance had been considered under various rating factors, it was not until fiscal year 2002 that past performance became a threshold requirement that an applicant must meet to be eligible for a grant. The status of work at HOPE VI sites varies greatly, with construction complete at 15 of the 165 sites. As of December 31, 2002, grantees had completed 27 percent of the total planned units and spent approximately $2.1 of the $4.5 billion in HOPE VI revitalization funds awarded. However, the majority of grantees have not met their grant agreement deadlines. For example, the time allowed for construction has expired for 42 grants, yet grantees completed construction within the deadline on only 3 grants. Several factors affect the status of work at HOPE VI sites, including the development approach used and changes made to revitalization plans. HUD's oversight of HOPE VI grants has been inconsistent, due partly to staffing limitations and confusion about the role of field offices. Both headquarters and field office staff are responsible for overseeing HOPE VI grants. However, HUD field offices have not systematically performed required annual reviews. Additionally, despite grantees' inability to meet key deadlines, HUD has no formal enforcement policies. Instead, the agency determines if action should be taken against a grantee on a case-by-case basis. Although HUD has declared 9 grants to be in default and issued warnings regarding 3 grants, it has not done so for other grants in a similar situation.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: 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.

    Recommendation: 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.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Implemented

    Comments: 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.

    Recommendation: 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.

    Agency Affected: Department of Housing and Urban Development

  3. Status: Closed - Implemented

    Comments: 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.

    Recommendation: 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.

    Agency Affected: Department of Housing and Urban Development

 

Explore the full database of GAO's Open Recommendations »

Oct 7, 2014

Aug 1, 2014

Mar 31, 2014

Mar 27, 2014

Mar 18, 2014

Feb 6, 2014

Jan 30, 2014

Jan 28, 2014

Oct 22, 2013

Looking for more? Browse all our products here