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088987 1 (1973-07-27)

handle is hein.gao/gaobacuys0001 and id is 1 raw text is: 


                      UNITED STATES GENERAL ACCOUNTING OFFICE
                               WASHINGTON,  D C 20548


RESOURCES AND ECONOMIC
DEVELOPMENT DIVISION                                       JUL 2 7 1973




       The Honorable Clifford W  Graves
       Acting Assistant Secretary for
         Community Planning and Development
       Department of Housing and Urban
         Development

       Dear Mr  Graves

            The General Accounting Office is reviewing certain areas of the
       New Community Development Program   Our work is currently underway at
       the Department of Housing and Urban Development (HUD) headquarters and
       at four new community sites   Jonathan, Minnesota, Park Forest South,
       Illinois, Flower Mound, Texas, and Riverton, New York. The information
       developed to date and presented in this report relates primarily to the
       Jonathan and Park Forest South projects  At  the completion of our work,
       we plan to report on the four projects reviewed

            Our review is being focused on three pertinent aspects of the
       program

            --determinations by HUD of the economic feasibility of the
              projects,

            --type of security pledged for the federally guaranteed
              obligations, and

            --HUD's monitoring efforts

       Our review showed that weaknesses exist in these areas for both the
       Jonathan and Park Forest South projects

       HUD did not adequately review
       the economic feasibility of
       the approved projects

           We noted  that HUD guaranteed a total of $51 million in bonds for
       the Jonathan and Park Forest South projects without adequately determin-
       ing whether the projects were economically feasible  For example, HUD






                                                 zwW9

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