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Community Development: CDFI Fund Can Improve Its Systems to Measure, Monitor, and Evaluate Awardees' Performance

RCED-98-225 Published: Jul 15, 1998. Publicly Released: Jul 15, 1998.
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Highlights

Pursuant to a legislative requirement, GAO reviewed the performance of the Community Development Financial Institutions (CDFI) Fund, focusing on: (1) the first round of awards in the CDFI and Bank Enterprise Award (BEA) programs and the strategic plan that the Fund developed under the Government Performance and Results Act of 1993; (2) the Fund's development of systems to measure, monitor, and evaluate the awardees' performance; and (3) BEA's impact on banks' lending and investment in CDFIs and distressed communities.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury To strengthen performance measurement in the CDFI program, the Secretary of the Treasury should instruct the Director of the CDFI Fund to encourage the greater reporting of accomplishments by awardees. To allay the concerns described by the 1996 awardees, the Director could require that accomplishments be reported in each awardee's annual impact report. Accomplishment measures should include: (1) those that are, without limitation, negotiated with each awardee on the basis of the awardee's business plan; and (2) those that are, to the maximum extent practicable, related to the awardee's performance goals and measures.
Closed – Implemented
The Community Development Financial Institutions Fund has implemented new tools to encourage greater reporting of accomplishments. Since July 1998, the Fund negotiates at least one outcome-based performance measure in their award agreements. Second, the Fund is requiring awardees submit annual accomplishment (impact) reports of awardees progress meeting their outcome-based measures. No awardee is penalized on the basis of the greatness or modesty of its reported accomplishment, except that the Fund may penalize the awardee if it fails to submit a report.
Department of the Treasury To strengthen performance measurement in the CDFI program, the Secretary of the Treasury should instruct the Director of the CDFI Fund to establish procedures for systematically reviewing each awardee's goals to ensure that the measures address all key aspects of the related goals.
Closed – Implemented
The Community Development Financial Institutions Fund implemented a systematic process that employs several staff persons to review the goals and performance measures of each draft assistance agreement.
Department of the Treasury To strengthen performance measurement in the CDFI program, the Secretary of the Treasury should instruct the Director of the CDFI Fund to reformat the assistance agreement to include baseline dates and values and information on target markets.
Closed – Implemented
Since November 1998, the Community Development Financial Institutions Fund specifically included baseline and target market information within its assistance agreement contracts with the Fund's awardees.

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Topics

Community developmentEconomic developmentEconomically depressed areasFinancial institutionsFunds managementPerformance measuresReporting requirementsStrategic planningSmall businessStrategic plan