DiNapoli: State slow to disburse some federal housing relief funds

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New York has been slow to use some federal relief funds intended to ease the state’s affordable housing crisis, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The audit found that, at the direction of Homes and Community Renewal (UNHCR) and its local program administrators, the distribution of funds was delayed, putting some of the funding at risk. Because there is a deadline for the use of federal COVID-19 funds, delays in allocating them to specific housing projects or housing assistance programs could result in the loss of funds.

“The state continues to navigate the difficult waters of the post-pandemic housing crisis,” DiNapoli said. “We need every available dollar for housing needs in our state, especially those that can help strengthen affordable housing. UNHCR must work more effectively to ensure that unprecedented federal relief funds help New Yorkers in need and are not lost to unnecessary delays and misunderstandings.

UNHCR has received hundreds of millions of dollars from the federal government over the past few years, including:

  • $244 million from Housing and Urban Development (HUD) through the Community Development Block Grant (CBDG) program.
  • $127 million in additional CBDG funding through the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) with a HUD-HCR funding agreement through 2026.
  • $120 million in funds from HUD’s HOME Investment Partnership Program.
  • $93 million in additional HOME COVID-19 assistance through the HOME American Rescue Plan (HOME-ARP) program with a HUD-HCR funding agreement through 2030.

UNHCR channels the money by allocating it, in the form of grants, to local program administrators, which UNHCR oversees to ensure they use the money in ways that meet federal requirements. Federally funded programs often set deadlines for spending awarded funds, especially in temporary streams like the CARES Act and the US Rescue Act of 2021. For example, the HUD and UNHCR funding agreement for CDBG CARES Act funding runs until September 23, 2026, and UNHCR must expend at least 80% of the funds by September 23, 2023.

DiNapoli’s audit found that UNHCR needs to improve its timeliness in committing and disbursing federal funds, especially those specific to COVID-19 relief. For example, the audit found that UNHCR only committed about $98 million of the $127 million in CBDG funds it received through the CARES Act and repaid less than $5 million. of dollars. To meet the HUD deadline, UNHCR, working with local program administrators, must spend $96 million by September 2023, 19 times the amount UNHCR has spent since receiving the funding in September 2020, otherwise he risks losing the money. The remaining $122 million must be spent by September 2026 to avoid potential further loss of funding.

In addition, the audit determined that some local administrators had not applied to UNHCR for COVID-19 relief funds due to agency restrictions. Two of the five local administrators the auditors spoke to said they could not meet UNHCR’s 12-month deadline for project completion due to supply chain issues and contractor availability. . UNHCR offers extensions, but the audit revealed that not all local administrators were aware of this option.

The audit also found that UNHCR needed to strengthen oversight of some of the local administrators who received funds to ensure they were monitoring contractors and sub-recipients to ensure they were complying with federal requirements that govern the use of funds.

Recommendations

Among its recommendations, the DiNapoli audit called on UNHCR to:

  • Work with local program administrators to ensure that funds within COVID relief are committed and expended in a timely manner, improving communication around performance completion requirements and identifying and reducing shortfalls. delays in releasing funds for completed works.
  • Improve internal controls over the administration of CDBG, including better tracking of sub-recipients and contractors used by local program administrators and strengthening controls over confidential information.

Answer

UNHCR generally agreed with the findings of the audit and officials said they had taken steps to improve the allocation and distribution of funds and increase communication with local administrators on the rules governing the completion of projects. The agency’s response is available in the audit.

Audit
Housing and Community Renewal: Housing Trust Fund Corporation: Internal Controls and Maximizing Federal Funding for Community Development Block Grant and HOME Investment Partnership Programs


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