..-__. ..___.-.._.__........ - ._-. -_- llnil.t~d .._._.- - ..I__ .- ..._^__. S1,al.w Gt~ntstxl _______I__-__ At~ttounl,ing Ol’f’iw Report, to the Chairman Subcornrnittee GAC) on Housing and IJrban Af’f’airs, (:ornrnittee on Banking, Housing and lirban Af‘fairs, U.S. Senate ....._.-..-...- -- ..--------- lk(‘t’llltwr ! !l!Ml HOMELESSNESS Access to McKinney Act Programs Improved but Better Oversight Needed 142872 ..- ..~__ - -.- .-.._... -^-..--._.- _...^-I ___^_. __..___..__-_._ I ..“._._.__ I.._..- l_-.l-__._...... -._.- ._-.___.._......._.- ._.. ..^__..-..-_-..-...- United States GAO General Accounting Office Washington, D.C. 20548 Resources, Community, and Economic Development Division B-229004.9 December 28,199O The Honorable Alan Cranston Chairman, Subcommittee on Housing and Urban Affairs Committee on Banking, Housing and Urban Affairs United States Senate Dear Mr. Chairman: As requested, this report discusses actions taken by federal agencies to eliminate or reduce barriers to obtaining and using funds for programs established by the Stewart B. McKinney Homeless Assistance Act (P.L. lOO-77), These barriers were identified by assistance providers, advo- cacy groups, and organizations representing state and local government officials. The programs we reviewed are administered by the Depart- ments of Housing and Urban Development (HUD), Health and Human Services (HHS), Education, and Labor. In addition, this report discusses federal oversight-monitoring and program evaluation-of 14 McKinney Act programs and the status of expenditures by program recipients for some of these programs. (See app. I for a list of the 14 programs.) Although assistance providers and others generally have not recently identified barriers to obtaining and using funds for the Federal Emergency Management Agency’s (FEMA) Emergency Food and Shelter Program (ES), we reviewed FEMA'Smonitoring and evaluation efforts because EFSis the largest McKinney Act program. HUD,HHS,Labor, and Education have eased barriers that assistance prov- Results in Brief iders and others claimed hindered their efforts to assist the homeless through McKinney Act program funds. These barriers included require- ments for matching funds, environmental reviews, and a time limit for program expenditures. While all federal agencies have made it easier to obtain McKinney Act funds, monitoring efforts vary. FEMAand Labor monitor their programs, and HHSmonitors three of its five programs, HHSrelies on states to mon- itor its two programs that receive block grant funds. HUDand Education only recently have taken steps to implement monitoring procedures for their McKinney Act programs by developing monitoring guidelines and increasing the number of project visits. In addition, the five agencies have either completed or started, or plan to evaluate the effectiveness of Page1 GAO/RCED91-29 McKinneyAct prOgrams B22fNO4.9 most of their programs; however, the lack of consistent data on each program’s operations makes these evaluations difficult. In general, these agencies do not know how effective their McKinney Act programs are in assisting the homeless. Although agency officials believe the reduction in barriers will make it easier for grantees to obtain McKinney Act funds, they expressed con- cern about how slowly some grantees are spending the funds for home- less programs. Specifically, for HUD’SEmergency Shelter Grants (ESG) and Supplemental Assistance for Facilities to Assist the Homeless @FAA) programs, HHS’Mental Health Services program, and Education’s Adult Education for the Homeless and Education for Homeless Children and Youth programs, almost $29 million, or about 20 percent, of the fiscal years 1987-88 funds awarded remain unspent by assistance prov- iders. In response to this concern, HUD, HHS,and Education officials have modified their program regulations, issued guidance, and proposed legis- lative changes to ensure that program funds are spent in a more timely manner. The McKinney Act was enacted in response to concerns about both the Background urgency of the homelessness crisis and the diverse needs of the home- less. The McKinney Act programs provide a variety of services, including emergency food and shelter, transitional and permanent housing, primary health care, mental health care, alcohol and drug abuse treatment, education, and job training. The programs are funded through formula grants, block grants, or a competitive process. For fiscal years 1987-90, the Congress authorized about $2.4 billion and appropriated about $1.7 billion. Since passage of the McKinney Act, assistance providers and advocate organizations have cited administrative, legislative, and regulatory bar- riers that they believed impaired service delivery to the homeless. In November 1988, the Congress amended the McKinney Act (P.L. lOO- 628), in part, to address these concerns. However, these groups have continued to cite the need for additional changes to ease access to McKinney Act program funds. . Page2 GAO/RCED-91-29 McKinneyAct Program E22eoo4.e Advocacy groups for the homeless, assistance providers, and other orga- Actions Taken to Ease nizations have criticized matching fund requirements, application dates, Restrictions to and restrictions on allowed uses for program funds. In response, HUD, McKinney Act HHS,Education, and Labor have eased the eligibility and operational requirements of their McKinney Act programs and have taken measures Programs to better coordinate these programs. (See app. II.) HUD’SMcKinney Act programs required the most changes, and HUDoffi- cials recognized the need to improve program operations. In October 1989, HUDconsolidated the management of three of its four McKinney Act programs under the Office of Special Needs Assistance Programs (SNAP) and made additional program changes. For example, with respect to the Supportive Housing Demonstration Program, SNAP offi- cials have l lifted the requirement for environmental reviews for housing projects receiving operational funds only, l allowed transitional housing grant recipients to change their project location from the one specified in their application, and . permitted the use of HUD'SCommunity Development Block Grant and HHS’Community Services Block Grant funds to meet the local matching requirement. HHS’ IG Review Indicates Despite efforts to improve access to funds, some assistance providers SomeProblems May Still believe that problems still exist. In May 1990, the HHSInspector General (IG) completed a review of all 60 states and selected local service organi- Exist zations. The IG found that assistance providers still have concerns regarding program fragmentation, complex application processes, and the uncertainty of program funding. Officials of the Interagency Council on the Homeless, who requested this study, told us they intend to review the final IG report and recommend appropriate corrective actions. HUD and Education are not adequately monitoring their programs. They Better Federal have not established monitoring procedures such as specific guidelines Monitoring of nor required audited financial statements to verify recipient’s expendi- McKinney Act tures. In addition, the two agencies have not consistently performed on- site visits to grantees. Officials from the two agencies told us that little Programs Is Needed monitoring occurs because of limited staff and funds for travel and staff v training. HHSmonitors three of its programs and relies on state moni- toring efforts for two programs that are structured as block grants. Both Page3 GAO/lWED-@l-2@ McKlnneyAct Programs B22BO04.9 and Labor monitor their assistance providers to ensure compliance F+EMA with program rules and regulations. Program Monitoring by HUDpolicy requires its field offices to monitor McKinney Act program HUD and Education Is operations. However, a recent nationwide HUDIG audit of EN+,the Sup- portive Housing Demonstration Program (SHDP),and Section 8 Moderate Inadequate Rehabilitation Program for Single Room Occupancy Dwellings for Home- less Individuals (SRO),found that monitoring was inadequate at most of the 26 HUDfield offices visited. The IG found many instances of unap- proved uses of funds and unsupported expenditures. For example, one emergency shelter expended $16,000 in ESGfunds for staff salaries, which is an ineligible activity. IG officials told us that HUDcannot be assured that McKinney Act funds are being used as intended. HUD has not monitored its remaining McKinney Act prOgI%In-SAFAH. According to a HUDprogram official, prior to September 1989, HUD had not monitored any of the 45 ~AFAHprojects funded in fiscal year 1987. Starting in September 1989, HUDfield offices were responsible for moni- toring the OAF.. projects, but as of September 1990, a HUDofficial did not know whether the field offices were conducting on-site visits to the projects. HUDofficials cite staff shortages- for example, the SAFAHprogram was staffed by one headquarters person- and limited travel and training funds as reasons for the lack of monitoring of HUD’Sfour McKinney Act programs. HUDofficials told us they plan to develop specific monitoring guidelines for three McKinney Act programs and also increase the number of on-site visits, though the lack of staff will continue to hinder the monitoring effort. Education, in a January 1990 report to the President and the Congress, stated that because of cutbacks in personnel and funds, program moni- toring had been curtailed. It further stated that monitoring of its grant programs, including its two McKinney Act programs, was insufficient to ensure that recipients use federal funds in compliance with their grants. Education did not have adequate monitoring practices in place for the Adult Education for the Homeless Program. According to program offi- cials, as of September 1990, Education had made no on-site visits to projects funded with fiscal years 1987-88 appropriations, and agency personnel visited only 5 of 30 fiscal year 1989 funded projects. Educa- tion officials told us they are currently designing monitoring guidelines Page4 GAO/RCED-@l-29 McKinneyAct Program8 sb229304.e for the program that will be ready for use in February 1991. In addition, Education is developing a 2-year compliance review plan that will require program personnel to make on-site visits to all homeless adult education projects funded with fiscal years 1989-90 appropriations. Education expects to implement the review plan in fiscal year 1991; however, this depends on the availability of funds to pay for staff and travel. Similarly, up until May 1990, Education had not monitored the states that received Homeless Children and Youth Program funds since fiscal year 1987. Program officials have developed specific monitoring guide- lines and have started making on-site visits to the states. As of October 1990, program personnel had visited 3 states, and they plan to make on- site visits to an additional 30 to 36 states during fiscal year 1991. How- ever, program officials told us that this number may be lower if staff levels are not increased. FEMA, Labor, and HHS Both FEMAand Labor have implemented monitoring procedures to Have Monitoring ensure compliance with program regulations. FEMA’S EFS program, cre- ated under separate legislation in 1983 and subsequently authorized Procedures in Place under the McKinney Act, has delegated much of the monitoring respon- sibilities to the El% National Board’ and over 2,300 local EFS boards. FEMA,through the National Board, issues detailed monitoring guidelines, tracks administrative expenses, and requires independent audits of assistance providers. According to FEMA officials, desk audits are per- formed for each of the over 9,000 EF’Sassistance providers once every 3 years. This is supplemented annually by about 60 on-site visits con- ducted by FEMA’SEFS and IG personnel, plus staff from the National Board. In addition, the local boards are required to make on-site visits to assistance providers in their jurisdiction, although FEMA officials do not know the extent to which this is being done. Labor has also established monitoring procedures and visited about three-fourths of the projects funded by its two programs in fiscal years 1988-89. Labor personnel made on-site visits to all 16 of its homeless veterans’ assistance providers. As of September 1990, agency personnel had visited 26 of 33 job training assistance providers funded in fiscal year 1988 and 4 of 12 projects funded in fiscal year 1989. According to program officials, they plan to make on-site visits to the remaining 8 IThe Boardconsistsof representativesfrom six national charitableorganizationsresponsiblefor pro- gram funding decisions. Page5 GAO/WED-@l-2@ McKlnneyAct Programs 5229004.9 projects, plus all 19 projects funded in fiscal year 1990 during fiscal year 1991. HHShas implemented monitoring procedures for three of its five McKinney Act programs, but it does not independently monitor its two McKinney Act block grant programs. Rather, consistent with HHS'policy and regulations on the administration of block grants, it relies on state assurances that program funds are being used for purposes consistent with the statute and not for other services, and that the program goals are being met. According to HHSofficials, annual reports are reviewed by program staff to ensure that funds have been expended appropriately. For example, HHSreviews annual reports for the Community Mental Health Services for the Homeless Block Grant Program submitted by grant recipients. However, a report prepared for HHS'National Institute of Mental Health in April 1990 summarized the fiscal years 1987-88 reports and stated that the quality varied tremendously in terms of detail, time periods covered, and data on number of persons served. For five states, it was not clear in their annual reports whether or not their programs were operational. Overall, HUD, Labor, HHS,FEMA,and Education do not know how effec- Effectiveness of tive their programs are in assisting the homeless. Agency officials told McKinney Act us that their main concern since the passage of the McKinney Act has Programs Not Yet been to establish their respective programs and award money to assis- tance providers for delivery of services to the homeless. Currently, Determined efforts are underway by the five agencies to assess most of their pro- grams. However, according to both HUD and HHSIG officials, the agencies generally have not provided guidance to assistance providers on the type of data needed to be collected for evaluation purposes. Thus, the lack of consistent data will make it difficult to determine overall pro- gram effectiveness. Except for a congressionally mandated assessment of the SROprogram, HUDhas not evaluated the effectiveness of its four programs. In a March 1990 report to the Congress on the effectiveness of its first year’s SRO program, HUDconcluded that the program appeared to operate effec- tively. The report also concluded that the ultimate effectiveness of the program must await more data on projects and residents. This conclu- sion was based on data from the 30 projects funded in fiscal year 1988. HUD has not assessed the additional 28 projects funded in fiscal year 1989. In addition, according to a HUDIG official, the IG'S audit of the ESG Page6 GAO/WED-9139M&hey Act Programa B-229094.9 and SHDPprograms indicates that not enough data are currently avail- able to assess the effectiveness of these programs. HUDofficials told us that they plan to contract for evaluations of both the FSGand SHDPpro- grams and expect to receive the results of the evaluations in 1992. Labor contracted for an independent evaluation of its Homeless Vet- erans Reintegration Project’s first year of operation. A May 1990 draft of the evaluation report stated that the program was successful in its mission of veteran reintegration by exceeding the numeric goal for vet- erans served and total placements. However, the contractor was unable to determine the overall effectiveness of the program to deliver services to homeless veterans because uniform data have not been collected at the project level. Labor also has started an evaluation of its Job Training for the Homeless Demonstration Program, but the final results will not be reported until April 1992. Labor did, however, testify in May 1990 before the Congress on the results of the first year’s operation. HHScontracted for an evaluation of 10 of the 109 Health Care for the Homeless Program projects funded in fiscal year 1987. In a March 1989 report, the contractor concluded that several of the projects could be used as models for replication elsewhere in the country. HHSalso has contracted with two firms for national evaluations of its two demonstra- tion projects for alcohol and drug abuse and mental health services. In addition, the two demonstration projects have built-in evaluation com- ponents. According to HHSofficials, one-third of the annual appropria- tions for the alcohol and drug abuse demonstration projects have been used for evaluations. The officials stated that in accordance with HH!3 block grant policy, they do not plan to assess the effectiveness of their two block grant programs. Beyond reviewing the reports prepared annu- ally by the states, it is HHS'policy that the states are responsible for evaluating the effectiveness of block grant programs. Neither FEMAnor Education has evaluated its McKinney Act programs, although both agencies plan to do so in fiscal year 1991. FEMAis cur- rently accumulating program data from the local EFSboards and assis- tance providers that will be used in an evaluation of the Em program. According to Education officials, the agency also is collecting program data and plans to award a contract for an evaluation of the effective- ness of its Adult Education for the Homeless programs operating in 1990. However, according to these officials, it may be difficult to reach an overall assessment because of the inconsistent data collected by the projects. Education has no plan to evaluate its Homeless Children and Youth program, Page7 GAO/RCEB91-29 M&hey Act Programa B-229094.9 Program officials told us they are concerned that funds for some Officials Concerned McKinney Act programs are not being spent in a timely manner by some About Spending Rate recipients, We reviewed expenditure rates for these programs for fiscal for SomeMcKinney years 1987-88 and, given the emergency nature of the McKinney Act, expected that most of these funds would be spent by 1990. Specifically, Act Programs for HUD'SESGand SAFAHprograms, HI-B' Mental Health Services program, and Education’s Adult Education for the Homeless and Education for Homeless Children and Youth programs we found that almost $29 mil- lion, or about 20 percent, of the fiscal years 1987-88 funds awarded remain unspent by assistance providers. (See app. III for the amounts of fiscal years 1987-88 funds that remain unspent.) Although about 93 percent of HUD'SIBG fiscal years 1987-88 funds have been spent, several large recipients have not spent significant portions of their grants according to our analysis of March 26,1990, expenditure data, For example, about 27 percent ($460,000) of California’s ESCgrant is unspent, and over 84 percent ($282,000) of Washington, D.C.‘s fiscal years 1987-88 IBG grant awards remain unspent. To help spend the funds more rapidly, HUDestablished a program policy, effective with the fiscal year 1990 funds, that all IBG funds must be spent within 2 years of receipt. About 33 percent ($4.9 million) of SAFAH’Sfiscal year 1987 funds (this program was not funded in fiscal year 1988) remained unspent as of January 31,199O. A number of ~AFAHrecipients have not spent substantial portions of their funds: for example, Dade County, Florida, has about $310,000 unspent, or 90 percent of the $346,000 it received, while Newark, New Jersey, has about $803,000 unspent, or 91 percent of the $881,000 it received. Several recipients of HIS' mental health block grant program also have large amounts of funds unspent since fiscal years 1987-88. For example, as of March 31, 1990, over 96 percent ($862,000 of nearly $896,000) of Maryland’s fiscal years 1987-88 grant remains unspent, while Florida has about 30 percent, or over $700,000 remaining. Current law allows, but does not require, states to turn in their unspent mental health block grants for redistribution in the state by the Secretary of HHSin the form of categorical grants. HHShas drafted a legislative proposal to require mental health block grant recipients tospend their money within 2 years of receipt. In addition, according to HHSofficials, program staff monitor spending rates to identify those states with large unspent bal- ances, to identify any technical assistance needs to overcome impedi- ments, and to encourage those states to spend their grants more quickly. Page8 5229004.9 Education’s two McKinney Act programs are experiencing similar problems. Officials told us they are concerned about the slow spending rate and have made program changes to expand the allowable uses of the Education for Homeless Children and Youth Program funds. For example, as of December 31, 1989, Florida had not spent 96 percent, or $321,388, of its $337,621. In addition, New York State, as of March 30, 1990, had not spent over 86 percent, or $708,807, of its $828,772 fiscal years 1987-88 funds. According to studies on expenditure rates conducted by HUD and HHSand our discussions with recipients, reasons for nonexpenditure include pro- gram start-up problems, time needed to award contracts for major building renovations, the uncertainty of federal funding for these pro- grams from year to year, and community resistance to the proposed location of homeless projects. HUD,HHS,Education, and Labor have made progress in easing barriers Conclusions identified as impediments to providers obtaining and using McKinney Act funds. HUD and Education have not adequately monitored their McKinney Act programs and therefore cannot be assured that the programs comply with the McKinney Act and federal rules and regulations. Without ade- quate monitoring, we believe the potential for the misuse of funds and inefficient program operations is increased. Further, the lack of federal guidance to assistance providers on the type of data they should be col- lecting for evaluation and the lack of program effectiveness evaluations hinder the government’s ability to know whether the McKinney Act pro- grams are working and what changes might be needed to improve the delivery of services to the homeless. However, at HUD, Education, Labor, and FEMA,efforts are underway to improve monitoring and/or conduct program evaluations, HHSofficials told us that they will continue to rely on states to monitor and evaluate the two McKinney Act block grant programs. In addition, HUD, HHS,and Education officials are aware that some pro- gram recipients have not spent large portions of their fiscal year 1987- 88 funds. We expected that, given the emergency nature of the McKinney Act, most program funds for fiscal years 1987-88 would have been spent by 1990. For some programs, agency officials are taking actions to ensure that funds are being spent in a timely fashion, and we Page9 GAO/RCED9l-29McKi~1eyActPrograma E222004.B believe that HUD,HHS,and Education officials should monitor all pro- gram expenditure rates. We recommend that the Secretaries of HUD and Education develop spe- Recommendationsto cific guidelines, conduct regular on-site visits, and require financial the Secretaries of audits for all their McKinney Act programs. The Secretary of HHSshould HUD, Education, HHS, dforetermine whether it is appropriate to increase the level of monitoring the Department’s two McKinney Act block grant programs. and Labor, and the Director of FEMA We also recommend that the Secretaries of HUD, Education, HHS,and Labor; and the Director of FEMAevaluate the effectiveness of all their McKinney Act programs to assess whether they are working as intended and to identify needed changes, In line with this, the Secretaries and the Director of FEMAshould develop evaluation guidelines to help assistance providers develop, document, and report consistent and comprehensive program data that can be used to evaluate the effectiveness of the programs Our objectives were to determine (1) what actions federal agencies have taken to reduce or eliminate barriers to obtaining and using McKinney Act funds, (2) the adequacy of federal program oversight, and (3) the status of program expenditure rates. We interviewed headquarters offi- cials from the five federal agencies that administer the 14 programs. We reviewed and examined program documentation-including IG reports and reports issued by advocacy groups and public interest organiza- tions-on program implementation and administration. We did not review three of the McKinney Act programs-the federal surplus prop- erty program and two Department of Veterans Affairs programs because we had other ongoing reviews of these programs. For the pro- grams we reviewed, we focused on program changes made by federal agencies since the 1988 reauthorization of the McKinney Act. We also interviewed agency officials and 36 state and local program recipients in 16 states to obtain information on their expenditure rates for specific McKinney Act programs funded in fiscal years 1987-88. We reviewed fiscal year 1987-88 expenditures because we expected that most funds for these program years would have been spent by 1990. We discussed the information presented in this report with agency offi- cials responsible for each of the 14 McKinney Act programs and incorpo- rated their comments where appropriate. As agreed, we did not obtain Page10 GAO/RCED-91-29 McKinneyAct Programa B229004.9 written comments on this report. We conducted our review from Sep- tember 1989 to October 1990 at the responsible agencies’ headquarters in Washington, D.C. and performed our work in accordance with gener- ally accepted government auditing standards. Copies of this report will be sent to the Secretaries of HUD, HHS,Educa- tion, and Labor, the Director of FEMA;the Director, Office of Manage- ment and Budget; and other interested parties upon request. Our work was performed under the direction of John M. Ols, Jr., Director, Housing and Community Development Issues (202) 276-6626. Major contributors are listed in appendix IV. Sincerely yours, fDFQ Assistant Comptroller General Page11 GAO/WED-91-29 McKinneyAct Programs Contents Letter Appendix I 14 McKinney Act Programs Reviewed and Fiscal Year 1990 Funding Levels Appendix II 16 Actions Taken to HUD Programs HHS, Education, and Labor Programs 16 16 ReduceBarriers to McKinney Act Programs Appendix III 18 Status of Fiscal Years 1987-88 Program Expenditures for Five McKinney Act Program Appendix Iv Major Contributors to This Report Page12 GAO/RCED91-29 &Kinney Act Program Abbreviations EFS Emergency Food and Shelter (Program) JB.3 Emergency Shelter Grants (Program) FEMA Federal Emergency Management Agency GAO General Accounting Office HHS Health and Human Services HUD Housing and Urban Development IG Inspector General NIMH National Institute of Mental Health SAFAH Supplemental Assistance for Facilities to Assist the Homeless (Program) SHDP Supportive Housing Demonstration Program SRO Section 8 Moderate Rehabilitation Program for Single-Room Occupancy Dwellings for Homeless Individuals Page 13 GAO/RCEB91-29 McIUnneyAct Programs Appendix I McKinneyAct ProgramsReview4 and Fkxil Year 1990FundingLevels Departmant of Housing and Urban DOVOlOpllOti Dollars in millions Fundina Levels Emergency Shelter Grants Program $73.2 Supportive Housing Demonstration Program 126.8 Section 8 SRO Proaram 73.2 Supplemental Assistance for Facilities to Assist the Homeless 10.8 Federal Emergency Management Agency Emergency Food and Shelter Program 130.1 Deoartment of Health and Human Services Mental Health Services Block Grant 27.7 Demonstration Projects for,Alcohol and Drug Abuse 16.3 Mental Health Services Demonstration Projects 6.0 Emergency Community Services Homeless Grant Program 21.9 Health Care for the Homeless Program 32.4 Deoartment of Education Adult Education for the Homeless 7.4 Education for Homeless Children and Youth 4.9 Deoartment of Labor Homeless Veterans Reintegration Program 1.9 Job Training Demonstration Program 9.4 Page14 GAO/RCEIbBl-99 McKlnney Act Programs Appendix II ActionsTakento ReduceBarriersto MeKinney Act Programs This appendix describes the changes made by HUD, HHS,Education and Labor to their McKinney Act programs to reduce barriers for assistance providers in obtaining and using program funds. In October 1989, HUD consolidated the management of three of its four HUDPrograms McKinney Act programs under one office-the Office of Special Needs Assistance Programs- to better coordinate its efforts and assist prov- iders in the delivery of services to the homeless. Since November 1989, HUDhas made changes to all of its McKinney Act programs to ease problems with access and use of funds for the Supportive Housing Dem- onstration Program (SHDP),Emergency Shelter Grant Program @so), Supplemental Assistance to Facilities to Assist the Homeless (SAFAH), and the Section 8 Moderate Rehabilitation Program for Single-Room Occupancy for Homeless Individuals (SRO). SHDPprovides funds to acquire and renovate properties for transitional housing for the homeless and permanent housing for the handicapped homeless. Because providers had difficulty meeting the SO-percent matching requirement from nonfederal sources, HUDnow allows its Com- munity Development Block Grant and HHS'Community Services Block Grant funds to serve as the nonfederal match for supportive services. In addition, HUDhad required providers to have control of property through lease or ownership when they applied. Faced with neighbor- hood resistance to homeless facilities and other problems, assistance providers had difficulty in obtaining site control within the allowed time. HUDnow allows grantees to substitute a different property than that listed in their application for up to 1 year after the award. HUD also lifted the lo- to 20-year building use restriction that had previously affected landlords whose buildings were leased to SHDPfunding recipi- ents. In addition, comprehensive environmental reviews, which were costly and caused unnecessary delays according to grant recipients, are no longer required if HUDfunds are used solely for operating transitional housing or permanent housing for the handicapped projects. As a result of the changes to the permanent housing for the handicapped program, HUDofficials expect that the entire $15 million allocation for fiscal year 1990 will be awarded to recipients, compared with only about 28 per- cent from fiscal years 1987-89. Finally, HUDis now providing grants of up to 76 percent, the maximum allowed by law, of operating costs for transitional housing for the first 2 years and up to 50 percent for the remaining 3 years. Previously, HUD had funded only up to 50 percent of the operating costs for 5 years. Page16 GAO/RCEDBl-29 McKinneyAct Program8 ActloneTakento ReduceBarrierato lb&Kinney ActmanuJ ESGprovides grants to states, territories, and localities to rehabilitate, renovate and operate shelters and provide essential services involving health, employment, drug abuse, and education. Providers are limited to using 20 percent of their grants for essential services; however, HUDis authorized to grant waivers to allow assistance providers to exceed the 20-percent limit in certain circumstances. According to HUDofficials, the first 17 waivers issued were granted in fiscal year 1990, and these allow shelters to provide more comprehensive services to the homeless, such as employment or educational assistance and homelessness prevention activities. In addition, as with SHDP,HUD also eased the requirement for comprehensive environmental reviews for grants used solely for oper- ating shelters, The changes HUDmade to SHDPand ESGalso apply to the ~AFAHprogram because SAFAHfunds are used to supplement both SHDP and ESGprograms. In addition, HUDeased the eligibility requirement for its SROprogram, which is designed to provide funds for moderate rehabilitation to owners of rehabilitated SROhousing through rental assistance to home- less persons residing in these buildings. HUDnow allows all public housing agencies to apply for SROfunds; previously, only housing agen- cies with experience administering HUD'SSection 8 Moderate Rehabilita- tion Program were eligible. HHSmade one change to its Community Mental Health Services for the HHS, Education, and Homeless Block Grant program. This program provides funding to states Labor Programs and territories for a variety of mental health services, including out- reach, community mental health services, referrals to primary health and substance abuse services, staff training, case management, and sup- port services in residential settings. Starting with the fiscal year 1990 program, HI-B recommended a March 31,1990, due date for applications for its mental health block grant funds. According to HHSofficials, the absence of a due date delayed the use of these funds because states, which apply for funds on behalf of assistance providers, were applying for program funds late in the fiscal year. These late applications delayed getting the funds to the assistance providers. In fiscal year 1989, HHS received only 20 of 66 applications by March 31, compared with 38 out of 66 by that date in 1990. Education’s Education for Homeless Children and Youth Program ini- tially did not allow direct services to the homeless, but rather funded state efforts to plan and organize educational programs for homeless children and youth. An advocacy group complained that the program Page16 GAO/WED-91-29 McKinneyAct Programa AppendixII ActionaTakento ReduceBnrriemto McKlnneyAct Program should directly pay for educational services for homeless children and youth. In June 1989, Education informed states that they could use any prior years unspent funds to start pilot projects for educational pro- grams for homeless children and youth. As of October 1990, according to an Education official, 37 states have started these pilot projects. Labor’s Job Training for the Homeless Demonstration Program provides funds to demonstration projects for such activities as job counseling and training for the homeless. Labor asked the Congress to change the McKinney Act to remove the 2-year limit on the expenditure of program funds. The Congress made this change in November 1989 after Labor supplied information showing as of September 30, 1989,19 of 33 projects had significant amounts of unexpended funds. According to a Labor official, some of the 19 either stopped or curtailed services when the 2-year funding period expired. According to the Labor official, the removal of the 2-year spending limit permitted all 19 projects to con- tinue serving the homeless and be evaluated for possible replication. Page17 GAO/RCED-91-29 McKinneyAct Programa Appendix III Status of l?iscdYears1987-88Program Expendituresfor Five McKinneyAct Program Dollars in millions Funds Funds Funds Percent Agency/Program awarded spent unspent spent Emergency Shelter Grant (as of Mar. 1990) $58.0 $54.0 $4.0 93 Supplemental Assistance for Facilities to Assist the Homeless (as of Jan 1990) 15.0 10.0 5.0 67 HHS Mental Health Services Block Grant (as of Mar. 1990) 43.7 36.0 7.7 82 Education Adult Education for the Homeless (as of Mar. 1990) 14.0 7.3 6.7 52 Education for Homeless Children and Youth las of Dec. 19891 9.0 3.8 5.2 41 Total ’ $139.7 $111.1 --- $28.6 80 Page18 GAO/RCEIbBl-29 McKinneyAct Programs Appendix IV Major Contributorsto This Report Marnie Shaul, Assistant Director Resources, Eugene E. Aloise, Assignment Manager Community, and Michelle A. Gambone, Social Science Analyst Carol Herrnstadt Shulman, Reports Analyst Economic Development Division, Washington, D.C. Margaret Armen, Senior Attorney Office of the General Counsel, Washington, D.C. Robert A. Barbieri, Audit Manager New York Regional Norman A. Krieger, Evaluator-in-Charge Office Erin Beckles-Young, Evaluator William T. Cronin, Evaluator Bryon S. Gordon, Evaluator (YHBISR) Page19 GAO/RCED-91-29 MeKinneyAct Programs _.“l,_,-“l_--_l__l_..~---..-.----.”---. ..-_.__. -- .^_.. -__--.__-_ --____ .-I..”._...._._...... - ^__.._. ..--..- ..-- - ---. ..---.__.-._---_-i--- .._- -____ 0rtl~~rittj.g I ttforttt:tl ion ‘I‘ttc* firs1 five copies of cactt GAO report, art’ fret,. Additional c*opicbs itre $2 c*ac*tt. Ordc~rs should tW sent. to t.ltc I’oltowittg it(l<lr<hsS, ;tccotttptttit~d by a cheek or tttottthy order rndc out. to the Sttpc~rittt.t~ttdthttl of I)ocutttc~ttt.s, wttt~n tltW%sary. Orders for IO0 or mot-c copiths to t)t: mailed t.0 a sittgltb addrt*ss art! tlisc~outtt~t~d 25 pcrccttt.. 1J.S. Gc~ttcrat Accouttt.ittg Offic*c~ I’. 0. hx MJI5 (;;til,trt~rsburg, MI) 2OS77 Orders ttiay also tx pla~cl by calling (202) 2753-634 1.
Homelessness: Access to McKinney Act Programs Improved but Better Oversight Needed
Published by the Government Accountability Office on 1990-12-28.
Below is a raw (and likely hideous) rendition of the original report. (PDF)