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093938 1 (1973-01-16)

handle is hein.gao/gaobacxip0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 'WASHINGTON, D C 20548 RESOURCES AND ECONOM IC DEVELOPMENT DIVISON JAN 1973 Dear Mr Hyde The General Accounting Office is currently examining into certain aspects of the Department of Housing and Urban Development's (HUD) administration of the urban renewal program. This review, which is being performed at the HUD head- quarters in Washington, D. C , and the regional and area offices in San Francisco and Los Angeles, California, Boston, Massachusetts and Atlanta, Georgia, showed that there are certain weaknesses in HUD's practices in providing funds to local public agencies (LPAs). Such weaknesses, in our opin- ion, unnecessarily increased the costs of certain urban menewal projects to the Federal Government by about $753,000. Approximately $535,000 of these costs were incurred during the period April 1970 to April 1972 because HUD prematurely made payments to certain LPAs Also, because HUD financed certain projects through direct Federal loans, rather than through LPA loans made on the open market, we estimate that additional costs of about $218,000 were incurred during the period January 1971 to December 1971. BACKGROUND Federal financial assistance for urban renewal projects is provided to LPAs either through HUD's direct loans, advances, or grants In addition, HUD guarantees project notes sold on the open market by the LPAs HUD will provide financial assistance to LPAs for two-thirds to three-fourths of the total project costs. The remaining costs are to be provided from local sources by in-kind or cash contri- butions HUD specifies the amount of loans (direct and open market loans) that it will rake or guarantee to finan- cially support the LPAs' projects. This amount represents a ceiling or limit--usually referred to as the amount of loan availability--Lbat is established on LPAs' borrowing authority The day-to-day working capital needs of LPAs are usually met through open-market sales of federally-guaranteed

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