Shared Pool of Knowledge

There seems to be a perception among Trump supporters that no one has been watching the store in the federal agencies that administer the federal programs that Congress creates. Many of them seem to think that those civil servants have been making off with the money themselves. I plan to write later about the independent oversight that is provided by the Inspectors General, in the Executive branch, and the Government Accountability Office in the legislative branch, created by Congress specifically to investigate allegations of fraud, waste or abuse. I will also discuss non-governmental watchdog groups, and fairly recent transparency improvements that allows anyone to see where tax dollars are going. For example, all the information available at https://fiscaldata.treasury.gov/

All of that for another day. I need to do some research to be able to accurately write about all of that. This post focuses on the oversight work that I regularly performed as a Senior CPD Representative in HUD’s division of Community Planning and Development (CPD).

CPD is in charge of several HUD grant programs. Each program has its specified activities that are eligible to be funded by the program, different activities for each program, but all the grant programs are intended to benefit persons with low income in one way or another. Most of the programs distribute funding through formula grants, which are distributed to cities, counties and states, according to a formula mandated by Congress.

The cities are required to submit five-year plans to HUD each year, along with a one-year action plan for the coming year. These are made publicly available by the cities and HUD requires cities to involve the public in creating these plans. I was responsible for reviewing these plans for my assigned grantees, and determining that their plans contained all the required details and adequately explained their plans for the coming year’s grant. After they submit certain required signed certifications, our office would notify HUD HQ to commit the funds. Committed means those funds are exclusively available to that grantee (city.) It does not mean any money changed hands. Funds are actually disbursed on a re-imbursement basis. The city must submit a request for reimbursement, with documentation, before receiving any money. I was not involved in processing those reimbursement requests. An automated payment system handled those.

My role was to serve as a resource person and the oversight for city staff tasked with administering these grant programs. They would regularly contact me to discuss uses of funds they were considering, asking if that was permissible asking me whatever they wanted. I provided answers and referenced the regulations that controlled the question. My job description included serving as an advocate and a resource for my grantees. Our office would regularly hold trainings for city staff on various aspects of HUD’s programs and requirements.

Our oversight role was centered around conducting annual monitoring visits. I will describe that work, but first I will explain how we decided which grantees to monitor. HUD HQ would dictate the number of monitoring visits required for the coming year, to each field office in the country. This was typically about 30-35% of our grantees. To determine which grantees to monitor each year, we conducted a risk analysis.

Each CPD rep reviewed all their grantees, using an analysis matrix designed by HQ, so every grantee nation-wide goes through the same evaluation. Questions in the evaluation included asking about the size of the grantee’s grants in each program, whether the grantee submits all reports satisfactory and on-time, the number of subrecipients the grantee uses, whether there have been any complaints, or if there are unresolved issues from a previous monitoring. One question asked is “Has it been longer than three years since the last time this grantee was monitored.?” That question is weighted so heavily that it assures every grantee is monitored every three-to-four years. Once every grantee has gone through the risk analysis process, our office would rank them according to score. Then, based on the number of monitoring visits required for the office, grantees would be selected by highest score, down the list until the quota is filled.

What is a monitoring visit?

After reviewing the grantee’s approved plan, active programs, expenditures, reports, and risk analysis, I decided which programs to review as part of my monitoring visit. I select the relative monitoring checklists from the database all CPD reps use in monitoring.

The actual on-site visit lasts a week, starting with travel to the city Monday morning and ending with my report to the city staff then travel home Friday afternoon. The report is in person with city staff responsible for administering the programs and department heads responsible for disbursing the HUD funds. My supervisor attends in person or online (depending on distance).

The work of the monitoring visit is guided by the standardized checklists. The task of completing the checklists requires me to review the staff’s records for the specific program. It requires me to review bookkeeping records of the income and expenditures for the program. Yes, some cities use grants in some programs that generate funds for the federal government. It’s called program income. In my review of expenditures I typically ask for a printout of all expenditures from program funds for a specific six month period. First I review the list for any suspicious activity, unusually large expenditures, etc. In addition, I select 10-20% of the total expenditures at random. Then the city must show me the documentation behind those expenditures – receipts, purchase orders, etc. Proof of payment and documentation of purpose and recipient.

Regulations for the program specify records that must be kept. I review their compliance with those regulations. Almost all of the funds in these formula grants are distributed by the city to private sector companies, nonprofit organizations, or internal city departments. I check samples to be sure the city has followed mandatory procurement policies and procedures.

Typically, one or two days of the week are made up of field trips to subrecipients of the city, mostly NGOs that directly provide the goods and service to person with low income. The cities are responsible to HUD for assuring these organizations keep required records, track all funds through accepted bookkeeping practices, spend the money on eligible activities, and provide required reports on time. My purpose in visiting a sampling of these organizations is to determine if the city is performing adequate oversight of its subrecipients. When I visit, I have standardized checklists guiding my work there – reviewing records, interviewing staff, inspecting apartment units and food banks, etc. We also take trips to HUD-funded housing, sidewalks, parks etc, to assure HUD the things were actually built, incompliance with HUD requirements.

It’s always a busy week. In addition to all the required work, it’s an opportunity to be an in-person resource, to build knowledge of the city’s programs and evaluate (informally) the effectiveness of city staff. It helps us identify a lack of knowledge or understanding of program requirements, which guides the trainings our office provides during the year.

Friday morning is spent writing up my report, completing checklists, last minute discussions with staff. The report consists of my narrative of the results of my visit. The checklists I have completed indicate when findings and concerns must be issued.

A finding reports the violation of regulation or law, and states clearly what the grantee must do to close the finding. Some minor findings require the city to change a practice, policy or procedure, and certify the change has been made. If the finding involved funds that were spent on an ineligible activity or paid to an ineligible subrecipient, the city typically must re-pay those funds, out of non-federal dollars.

Depending on circumstances and total amounts, the city is often allowed to re-pay those funds back into its own grant account. In essence, HUD is saying to the grantee: You spend your own funds to repay your grant then spend it correctly the next time. For large amounts, HUD requires cities to repay them directly to the US Treasury. If fraud is suspected, our office prepares a report to HUD’s Inspector General (IG) for investigation and prosecution, both civil and criminal.

A concern is my judgment that current practices, policies or procedures of the city will likely lead to a finding, if continued. A concern states my recommendation of how to improve in order to avoid future findings. This is HUD’s method of providing training and guidance to grantee staff, assuring they properly administer their programs and oversight.

This reflects HUD’s principle of partnering with grantees to provide the most efficient and effective executing of the programs created by Congress and approved by a President. We are not the gotcha police, we are the subject-matter experts paid with tax dollars to help the city run the best programs possible and to make sure they do it correctly.

During my ten years doing this work, I told one city they had to pay back hundreds of thousands of dollars. For another city, I argued with HQ staff that one city was not required to pay back funds. This related to a commitment deadline, created by Congress – that is, a date by which the city had to have all its grant funds for the year committed to specific projects by a legally binding contract. The city provided their commitment report to me. I reviewed it and approved it. As a secondary oversight, these reports from grantees were also reviewed by program staff in HUD HQ. They flagged one of the documents as not legally binding. After an exchange of emails between HQ staff and me, they checked with HUD Legal Counsel, which agreed with me that the contract was legally binding.

To sum up, I was a diligent watchdog for ten years, upstream and down. Now the current administration has plans to fire 85% of all the CPD reps in field offices throughout the country. The massive and widespread  consequences of such a stupid move is a topic for another day.