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092586 1 (1971-09-02)

handle is hein.gao/gaobacwlm0001 and id is 1 raw text is: UNITED STATES GENERAL AccouNTING OFFICE WASHINGTON, D C 20548 CIVIL DIViSION SEP 21971 Dear Mr. Hyde: During our current reviews of community development programs of the Department of Housing and Urban Development (HUD) we noted certain matters relative to the administration of the Water and Sewer Facilities Grant Program which we wish to bring to your attention. These matters concern the need for HUD to establish policies and procedures for with- drawing funds reserved for water and sewer projects when it appears that grantees will not be able to construct such projects within a reasonable tame period. Our work was performed primarily at the HUD central office. During this review we obtained pertinent information from four HUD regional and area offices and also from selected grantees. In addition, we obtained information on specific water and sewer projects from the Environmental Protection Agency (EPA). HUD records showed that as of February 28, 1971, the Department had reserved approximately $62 million in Federal funds for 127 proposed water and sewer projects for periods ranging from 1 to 4 years after grant agreements had been signed. Construction work on these projects had not been initiated by the grantees. HUD records showed also that as of this date, HUD had 222 applications requesting about $111 million in Federal funds for projects that it was unable to approve primarily because of a lack of funds. 6 During this review, we selected 21 projects for which, as of February 28, 1971, funds had been reserved by HUD for about 2 years. In view of the length of time that Federal funds had been reserved, we examined into these projects to ascertain whether construction was expected to begin in the near future. HUD central office officials told us in June 1971 that construction had not been initiated for 15 of these 21 projects. As of June 1971 about $12 million had been reserved by HUD for these 15 projects for periods ranging from 27 to 62 months as shown below. Projects Funds reserved for . . . Amount reserved (millions) 4 27 to 29 months $ 3.7 4 34 to 37 1 3.0 3 40 to 42 1 2.5 2 50 to 54 1.2 2 61 to 62 1.6 2:5 J12.0 5R 50 TH ANNIVERSARY 1921- 1971 -

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