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092721 1 (1969-03-14)

handle is hein.gao/gaobacwpk0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTIG OFFICE WASHINGTON, D.C. 20548 CIVIL DIVISION MAR 1 4 1969 Dear Mr. Secretary: BST DOCUMENT AVA R.A The General Accounting Office has examined into the manner in which the Department of Housing and Urban Development (HUD) determined the amounts for which grants were made to public bodies to assist in the con- struction of basic water and/or sewer facilities. The objective of our examination was to determine whether the policies and procedures followed by HUD in determining the amounts for which grants were made resulted in assistance to the maximum practical number of public bodies. In this regard, MUD had reported that it had a backlog of 1,161 requests for financial assistance for water and sewer projects at June 30, 1967. Our examiration was performed at the HUD Regional Office in San Francisco, California (Region VI), and at the MUD Central Office in Washington, D. C. We reviewed pertinentlegislation and applicable HUD policies, procedures and practices. Wesalso interviewed HUD officials at the locations visited and examined pertinent records. Wo found that MUD was making grants to public bodies qualifying for Federal assistance at the maximum percentage allowable under the author- izing legislation, with a maximum limitation of $1.5 million for any one grant. On the basis of our examination, we believe that 1UD could fur- ther the objectives of the program by varying the percentage of Federal assistance. Under such a system, those public bodies contributing most to the objectives of the program, or otherwise determined to be most deserving of financial assistance, could receive grants for a higher percentage of their project costs than the other public bodies. In this regard, the numeric rating system presently used by HUD to select projects which are to receive grants may be an acceptable method for determining the percentage of financial assistance that should be provided. In addi- tion to furthering the objectives of the program, we believe that the use of a system of varying percentages would permit HUD to provide financial assistance to more public bodies. The details follow. Section 702 of the Housing and Urban Development Act of 1965 (42 U.S.C.3101) authorized the Secretary of BUD to make grants to local bodies and agencies to assist in the financing of specific projects for basic water and/or sewer facilities. Subsection (b) of this see- tion provides, in part, that, The amount of any grant made under the authority of this section shall not exceed 50 per centum of the devel- opment cost of the project:, which is defined in section 706(c) as the cost of constructing the facility and of acquiring the land on which it is located, including necessary site improvements, The _7.2

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