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CED-77-2 1 (1976-12-06)

handle is hein.gao/gaobaabxg0001 and id is 1 raw text is: 

DOCUMENT RESUME


00546 - [A05906131

Why the Formula for Allocating Community Development Block Grant
Funds Should Be Improved. CED-77-2; B-171630. December 6, 1976.
50 pp.

Report to the Congress; by Elmer B. Staats, Comptroller General.

Issue Area: Domestic Housing and Community Development:
    Assisting Urban Communities to Prevent and Eliminate Blight
    and Deterioration (2102).
Contact: Community and Economic Development Div.
Budget Function: Community and Regional Development: Community
    Development (451).
Organiz- ion Concerned: Department of Housing and Urban
    Devclopnent; Bureau of the Census; Bureau of Labor
    Statistics.
congressional Relevance: House Committee on Banking, Currency
    and Housing; Senate Committee on Banking, Housing and Urban
    Affairs; Congress.
Authority: Housing and Community Development Act of 1914 (42
    U.S.C. 5301). P.L. 94-521.

         A review of the formula used to allocate Comsunity
Development Block Grant funds by the Department cf Housing and
urban Development (HUD) revealed inequities. In the Block Grants
program, funds for the improvement of urban communities were to
be allocated according to a needs formula based on population,
overcrowded housing, and the extent of poverty.
Findings/onclusions: In determining poverty, which receives a
double weight in the formula, HOD does not recognize regional
differences in cost of living as authorized by legislation.
Proposed allocations by HUD for 1977 are based on 1973 census
population estimates and 1970 data on poverty which would lead
to a shift of funds to wealthier suburban areas. GAO relieves
that funds should be distributed on the basis of the latest
census data. RecommeDdations: HUD should revise the methcdology
used to allocate Community Development Block Grant funds to
recognize regional cost of iiving variations. Congress shculd
amend the Housing and Community Development Act of 1974 to
require use of latest census data for the three variables in the
allocation formula until methods for updating the variables are
developed. (HTW)

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