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LMJ0538
UNITED STATES GENERAL ACCOUNTING OFFILE
WASHINGTON. D.C. 2054a
IES IRIC I :- Not to be refted outsde the soeelsI
Account'ng Office except on Ue basis of specific appMava
COMMUNITY ANO CONCMIC by the Office of Cosirou~onal ReaUku..
OEVILMOPMENT DIVISION
B-153449 April 6, 1978
The Honorable Charles H. Percy
---The Honorable-Ad-l-ai--Stevenson
United States Senate
The Honorable Paul Simon
House of Representatives
In response to your November 8, 1977, request, we re-
viewed the loan management procedures used by the Department
of Housing and-Urban Development (HUD) and the Department of
Commerce's Economic Development Administration (EDA) to
monitor tte repayment of loans provided to the Pend Lake
Conservancy District (Benton, Illinois) for construction of
a water transmission system and treatment facility. You
were particularly concerned about the long time that elapsed
before HUD negotiated a new repayment plan for the delinquent
interest and principal on its loan to the district. We found
that:
--HUD and EDA had not managed the district's loans
adequately; contrary to their procedures, they had
not taken timely action when adverse trends were
identified and when the loans became delinquent.
--HUD took an inordinate amount of time to work out a
solution for the repayment of delinquent interest.
--EDA had not approved a plan for the repayment of
delinquent interest as of February 1978.
Our review was made at HUD and EDA central offices in
Washington, D.C. We analyzed HUD and EDA loan management
procedures and documents and data pertinent to the loans made
to the district. We also interviewed HUD and EDA officials
responsible for administering public facility loans.
We are making recommendations to the Secretaries of HUD
and Commerce to improve their management of public facility
loans. (See p. 8.) As you requested, we did not obtain
written agency comments on our findings. However, we did
CED-78-89
(38463)
I
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