oversight

Homelessness: Status of the Surplus Property Program, the Interagency Council on the Homeless, and FEMA's EFS Program

Published by the Government Accountability Office on 1990-07-19.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United    States General    Accounting   Office
                   Testimony
GAO


For Release         HC@lELFSSNESS:
on Delivery
                    Status    of the Surplus     Property   Program,     the
Expectedat
9:30 a.m. EDT       Interagency     Council    on the Hcmeless,      and FE&IA's
Thursday
                    FFS Program
July 19, 1990




                    Statement of
                    John M. Ols, Jr., Director,     Housing and
                      Ca7nnunity Developent    Issues

                    Before    the Cmmittee on Governmental           Affairs
                    United    States Senate




GAO/T-RCED-90-98
                                                                               GAO Form 180 (12/87)
 Mr. Chairman      and Members of      the   Committee:

         I am pleased to be here today to discuss        our work related             to
the Stewart B. McKinney Homeless Assistance            Act.   Specifically,             I
will     discuss   the use of federal   property    for the homeless,       the
activities       of the Interagency   Council    on the Homeless, and the
Federal     Emergency Management Agency's     (FEMA) Emergency Food and
Shelter     Program (EFS).    We are glad to assist   the Committee in its
deliberations      on the reauthorization   of these three key parts of
the act.       In summary:

      --   Based on our ongoing work, we believe              that several
           improvements    to the title      V federal     property      program are
           needed to make it easier        for assistance         providers      to apply
           for vacant properties.        Most important         is to ensure that
           the government     determine    that no federal         use exists      for
           the properties     before the properties          are publicized        as
           being available     to providers.         Comprehensive       federal
           guidance on how to obtain         federal    properties       also would
           assist  providers.

      --   On a more positive       note, the Interagency     Council     on the
           Homeless (title     II of the McKinney Act),       has made
           significant    changes in its services       and operations.        These
           changes, identified        in our recently   issued report,      include
           the creation    of full-time     regional  coordinators      and
           improved leadership        by the current  Council    Chairman,     the
           Secretary    of Housing and Urban Development          (HUD).'

      --   Finally,    in our May 1989 report,  we noted problems with
           the timeliness    of funding  for FEMA's EFS program (title                      III




lHomelessness:   Changes In the Interagency                  Council    on the   Homeless
Make It More Effective   (GAO/RCED-90-172,                July 11,     1990).
          of the McKinney Act).2        Our follow-up    work shows that FEMA
          has taken positive     steps to correct     this problem and funds
          are reaching  providers     in a more timely     fashion.

         I would first     like   to discuss  the work       we performed    at your
request,      Mr. Chairman,      and at the request     of     the Government
Activities       and Transportation      Subcommittee,       House Committee on
Government Operations           on the title  V federal        property  program,    We
will     be issuing    a report    on this SubJect in        the near future.

FEDERAL PROPERTY PROGRAM
                       --PROBLEMS AND ACTIONS BEING TAKEN

       The Stewart B. McKinney Homeless Assistance         Act (P.L.       100-77,
July 22, 1987) was enacted in response to what the Congress
considered    to be an immediate  and unprecedented       crisis       due to the
lack of shelter     for a growing number of individuals          and families.
A mayor purpose of the act is to use public         resources        and programs
to meet the urgent needs of the nation's         homeless.       Title    V of the
act addresses    this purpose by allowing    organizations        providing
assistance    to the homeless an opportunity      to lease vacant federal
property   for a nominal    fee.  The properties       are used for various
services,    such as emergency shelters    and facilities        for feeding     the
homeless.

         The initial    federal   response to leasing     federal     properties     to
the homeless was inadequate,            and it took a lawsuit      and several
court orders to get federal            agencies  to begin the process of making
federal     property    available    to the homeless.     According      to HUD
officials,       from January to June 1990 HUD reviewed           7,666 properties
for potential        use by the homeless and, using broad criteria               it
developed      with the Department       of Health and Human Services          (HHS)
and the General Services          Administration    (GSA), has found about 52


2Homelessness:  HUD's and FEMA's Progress  in                 Implementing   the
McKinney Act (GAO/RCED-89-50, May 11, 1989).
                                           2
percent  suitable.3    Thirty-nine   properties      have been leased or are
in the process of being leased,as       transitional     housing projects,
emergency shelters,    multi-service    centers,     and facilities   for
feeding  the homeless.

     Our work identified   various    reasons why so few properties                   had
been leased or made available      to the homeless:

      --   Not all properties   identified   as suitable are usable for                     a
           variety of reasons:    for example, they may be too distant
           from homeless populations.

      --   Identifying     federal  properties   in the Federal Register as
           suitable    for the homeless before it is known whether they
           are available      can be misleading.

      --   Publicity    for   available     properties       has been inadequate.

      --   Comprehensive      federal     guidance       on how to obtain    properties
           is lacking.

        In addition,        agency officials     and assistance     providers        told
us that use by the homeless of vacant federal                  property    is limited
because providers           are not able to arrange financing           to renovate
existing    structures         or build   new structures     on leased property.
The McKinney Act only authorizes              leasing,    not donating,      of federal
properties.        Finally,      our review of the leases in use for the title
V program show that they may increase                 the government's     liability
and costs.




3This is not a cumulative      number   because  HUD reviews the
suitability     of federal properties     on a continuous   basis and thus
some properties     may be double-counted.

                                             3
Lawsuit     on Title      V

            In September 1988 advocates             for the homeless           sued the federal
government         because     the agencies     involved       in implementing          title    V of
the McKinney Act were not reviewing                    federal      properties       for their
suitability          for homeless use.         The U.S. District           Court,      District      of
Columbia,         concluded      that the federal        agencies      were not properly
implementing           the act.      The court    issued a preliminary             injunction
against        the federal       government    on September 30, 1988, prohibiting
federal        agencies     from disposing      of any federal          property       not in
active        use before being reviewed           under title        V, section        501.     In
subsequent         court orders,       the court      set forth      specific      steps to be
taken by HUD, HHS, GSA, and other federal                        landholding       agencies       to
fully       comply     with the requirements          of the McKinney Act.

Current     Procedures        Have Hindered         Program     Success

         Despite     the court orders,          problems       still     remain that limit           the
usefulness        of the program.            Most importantly,           the procedure
established         by title       V (and as subsequently             interpreted        by the U.S.
District      Court, District            of Columbia)      to identify         federal
properties        for use in assisting            the homeless does not permit
assistance        providers        to be certain       that the properties             they apply
for are actually            available       for use.      Suitable       properties       are
published       by HUD in the Federal             Register       before     the landholding
agencies,       including        GSA, decide whether there is a federal                      need for
the properties          or if they will         be made available             for use by the
homeless.         Therefore,         assistance     providers        may apply-for        properties
that are not available                for public      use and HHS must           review these
applications          even though the properties               may not become available                to
assistance        providers.

      HUD, HHS, GSA, and Council     officials  agree that availability
of the federal   properties   should be determined    by landholding
agencies  before the property     is publicized  in the Federal      Register
                                                  4
as suitable      for use by the homeless.           Currently,      there is a time
limit    for determining     availability        on certain     classes    of federal
property     but not others.       A reasonable      time limit       should be
established      for all federal       property.     Title     V would have to be
amended to allow such a procedure.

       Another procedural         issue that we believe            is important      is
ensuring     that property       be withheld       from other uses until          HHS acts
on assistance      provider      applications.         The court required         that
property     be withheld      from other uses to allow time for notices                    of
intent     to apply or for HHS to complete                action on the application.
Currently,      according     to officials        of agencies      controlling      most of
the vacant federal         property,      they are following         the holding       period
required     by the court order.            Although      the agencies       could confirm
this procedure       through     regulations       covering     the title      V process,
they have not done so.             Incorporating        this change into title          V
would statutorily         mandate a holding          period.

Assistance      Providers     Dissatisfied        With   Program    Publicity

        Another barrier        to making federal          properties       available    under
title    V has been inadequate            program publicity.            In November 1989,
we conducted        a telephone      survey of those persons and/or groups
interested       in federal      property.      Our survey showed that methods
other than publication            of properties       in the Federal Register            are
needed.       For example,       a representative         of a provider         group told us
that unless the group is on a mailing                   list   or is sent information
by someone who is,          it often does not find out about the properties
listed     in the Federal Register.              Representatives          of the Interagency
Council      on the Homeless,        HUD, HHS, and GSA, also told us that
providers      reported     that the Federal        Register       notices      are not
readily      available.

     To improve this situation,     separate publicity                    efforts  have
been or are being developed     by HUD, GSA, and the                   Interagency
                                              5
Council     on the Homeless.4       HUD has recently    implemented    an outreach
program using its field        offices   to publicize    vacant federal
properties.        GSA is sending notification       of each suitable     excess
and surplus       property to a wide range of interested         persons,   state
and local     officials,   newspapers,     and local   post offices.

       The Interagency         Council     on the Homeless has taken steps to
increase     publicity      of the title       V program.        The Council’s      1989
annual report        states    that to improve the record of making federal
property     available,      the Council       is pursuing       the goal of more
widely    disseminating        information       about  suitable     and available
properties.        It has already        published     and distributed        program
information      on federal       property.

       We have not evaluated    the effectiveness     of any of these
increased   efforts.   However, we believe       these actions    are steps in
the right   direction  and should give assistance       providers     a wider
range of opportunities     to learn about federal      property    for which
they might    apply.

Comprehensive      Guidance     Would Help Agencies         Implement     Title    V

        Three years after         title      V was enacted into law, there is still
no comprehensive         federal       guidance     on how to obtain      federal      vacant
properties.       As a result,           assistance     providers    cannot go to one
source to learn how this program works.                       To improve the
implementation        of title      V, the Council,         GSA, HHS, and HUD are
jointly     developing      a comprehensive          program regulation.          In a
July 13, 1990, meeting,              the Council's        Executive   Director      told us
that a draft       regulation        is currently       being reviewed      by HUD, GSA,
and HHS officials          and efforts         are being made to finalize           it as soon
as possible.        We believe         that    the guidance,      if implemented,       will
help assistance        providers.

4HHS does not       play   a role    in publicizing       federal    properties.
                                             6
Providers      Say Leasing     Limits    Program's      Potential

         Some assistance      providers      told US that the title        V federal
property     program limits         their   ability     to arrange financing     to
rehabilitate       existing      structures       or to build   new structures     because
they are only able to lease federal                  property.     If the property
requires     substantial       investment,        the provider    has two problems:
difficulty      in obtaining        a loan on leased property         and the likely
loss of the investment            when the lease expires          and possession     of the
property     reverts      to the federal       government.

        Some providers        believe      that an outright       gift   of the property
would ease their          problems      in obtaining       the necessary     rehabilitation
financing.        According      to providers,        agency officials,        and
organizations        assisting      the homeless that we spoke to, transfer                 of
title     from the federal         government      would give providers         a better
opportunity       to obtain      loans that could then be used to
rehabilitate        existing     buildings      or to build      new structures.
However, the question            of donating       federal    property     needs to be
balanced      with the monetary           worth of the property         to the federal
government.

Leases      May Expose    the Government       to Liability         and Costs

         During our review of title               V, we also examined the leases now
in use for McKinney Act property                    and found that they may expose the
government        to potential      liability         claims from, among other things,
litigation       by persons harmed because of physical                 defects   of the
properties.         In addition,        local     jurisdictions    may seek compensation
for the additional           costs incurred           (such as emergency services      for
shelter      residents)      associated       with nongovernment       use.    Changes in
the leases could minimize               potential        problems associated    with these
 factors.


                                              7
Conclusions


       In summary, Mr. Chairman,            improvements           are needed in title             V
program procedures.         Specifically,            the most important           procedure
that needs correcting        is that lists             of suitable      federal        properties
should be publicized        only after        it is determined            that the
properties    are available.         This would avoid wasted time and effort
and would not unduly raise expectations                       on the part of assistance
providers    who apply for the properties                  and agency officials             who
review the applications.            In addition,            we believe      that
comprehensive     guidance regarding             title     V should be issued as soon
as possible.       Furthermore,       the question            of whether to lease or to
donate property      needs to be considered                 from the dual viewpoint               of
the benefits     to the homeless and the monetary worth of the property
to the federal      government.         Finally,         actions     should be taken on
McKinney Act leases to ensure that the government's                            liability        and
costs are kept to a minimum.

INTERAGENCY COUNCIL ON THE HOMELESS IMPROVES ITS ACTIVITIES                                 AND
SERVICES

        I would like      to turn now to our work on the Interagency
Council     on the Homeless.          Title     II of the McKinney Act created              the
Interagency      Council     on the Homeless as an independent                 establishment
within    the federal       executive       branch.      Seven different       agencies
administer      18 McKinney Act programs.                The McKinney Act charged the
Council     with reviewing        all federal       activities       and programs to
assist    the homeless and with reducing                 duplication     of effort      among
federal     agencies.       To achieve these goals,             the Council      is further
charged with monitoring,             evaluating,       and recommending        improvements
in programs and activities              to assist      the homeless;       providing
professional       and technical        assistance       to public     and private
organizations       serving     the homeless;        collecting       and disseminating
information;      and reporting         annually     to the President         and the
Congress on activities            dealing      with the homeless.          The Council       is
                                                  8
scheduled     to cease operations            on October       1, 1990,      unless
reauthorized.

         The Council     is composed of the heads (or their
representatives)         of 15 federal        agencies:       headquarters      staff   in
Washington,      D.C.;     10 full-time       regional       coordinators      provided    by
HUD; and part-time          field     coordinators        provided     by the other member
agencies.       The activities         necessary      to carry out policies           and
priorities      established       by the Council          are further     developed     by a
policy     group, assisted        by Council       staff.       From fiscal     years 1988
through      1990 the Council         has been appropriated            a total    of about $3
million.

Council     Operations       Improve

        In March 1989 hearings               before the House Subcommittee                on
Government Activities              and Transportation             and the House Subcommittee
on Employment and Housing,                 we testified         that the Council's         efforts
to meet its statutory              responsibilities           under the McKinney Act were
inadequate      and ineffective.5               We identified        several    matters      that
hindered     the Council's           effectiveness,         including     inadequate       policy
guidance     or direction          from the previous           Chairman and uncertainty
among working-group            members about the Council's                role.     Most
importantly,       we found that the Council                  did not provide       critical
McKinney Act program information                     to state agencies         and local
assistance      providers,         thus possibly        precluding       providers      from
receiving      federal       assistance.          Since our March 1989 testimony,                 we
have reevaluated           the Council        and found that it has made the
following      significant         changes to improve its implementation                     of the
McKinney Act:




5Status of Activities            of the Interagency            Council     on the     Homeless,
(GAO/T-RCED-89-16,           Mar. 15, 1989).
                                                 9
       --   developing       policies     and guidance         to direct      its   activities,

       --   conducting       on-site     visits to assistance  providers to
            determine       how well     the McKinney Act programs were working,

       --   providing      technical   assistance            to providers      through
            briefing      sessions   and regional            workshops,

       --   providing       McKinney Act       information        to over     25,000
            individuals       and groups,        and

       --   developing       an annual report       with recommendations     focused                on
            federal     assistance    efforts     for the homeless,     which we
            believe     will   be useful     to the Congress in its policy
            deliberations.

Council's      Leadership       Has Improved

        In our March 1989 testimony,                    we testified       that the former
Council     Chairman,        the previous           Secretary     of HUD, did not provide
adequate policy          guidance         and management direction             regarding      federal
assistance       efforts        for the homeless.             As noted in our recent
report,     Council      leadership         has improved.           According     to the current
Executive      Director,          the current        Chairman,      the present      Secretary       of
HUD, provides         regular        policy     guidance      and management direction             to
the Council       at the Council's              quarterly      meetings      and through
frequent     meetings         with his Council            representative       and the Executive
Director.        Also, both the current                 Chairman and Vice Chairman,              the
Secretary      of HHS, have visited                 shelters     for the homeless.          These
visits     resulted      in a January 1990 memorandum of understanding
between HUD and HHS pledging                     that the Departments          would develop and
 implement     joint      initiatives          for assisting        homeless families         with
children,      welfare        families       in public       or assisted      housing,     and
homeless individuals                with serious        mental illnesses.           According       to
the Council's         Executive         Director,       since the memorandum was signed,
                                                 10
HUD and HHS have jointly             trained     their    staffs    on   each other’s
homeless programs.

Improvements       In System      Of Regional       Coordinators

         The McKinney Act requires         the Council          to provide      professional
and technical       assistance     on programs for the homeless to states,
localities,      and other public       and private          nonprofit      agencies.         In
our March 1989 testimony,            we stated       that,    although      the Council's
part-time     regional     coordinators      were important           connectors       linking
the Council      with the states,       only about half of the coordinators
were active      in their    outreach     effort.         We also concluded          that the
regional     coordinators      had problems obtaining              information       from the
Council     and suggested during        testimony         that establishment           of full-
time coordinators         would help.       In our recent report              we noted that
the current      Council    has addressed         these problems.

        In May 1989, the Chairman of the Council                  provided      10 HUD
employees to work full-time             as the Council’s        regional      coordinators
in each of HUD's 10 federal             regions.     These full-time          coordinators
work with the 124 field          coordinators,       who assist        the Council       on a
part-time    basis,    having other regular          agency responsibilities.                The
principal    duties    and responsibilities          of the full-time           regional
coordinators       are to provide       technical     assistance       in the field,       to
promote the use and implementation                of the McKinney Act programs by
the public     and private      sector,     and to provide        direction       to the
part-time    field    coordinators.         Assistance      providers       have told us
that the coordinators         have been extremely           helpful.

Improvements        In Council      Services

         In early  1989 we conducted      a telephone  survey of 18 state
officials      and 11 local    assistance   providers  to obtain their  views
of the Council’s      effectiveness.       Almost half of the state officials
we talked      to had not been contacted       by the Council’s, then part-
                                               11
time,   regional    coordinators.        In other instances,    the Council   had
not provided     the information       needed to effectively      implement  and
coordinate     McKinney Act programs at the state level.              Our March
1989 testimony      included      the results   of this survey.

         Our July 1990 report        updated this survey of 24 of the 29 state
officials     and local      assistance      providers         to determine        whether their
perception      of the new Council's            activities        differed      from the
services     provided      by the previous         Council.         Over two-thirds        of the
respondents       who rated the Council            said that the Council              was
"somewhat"      to "very effective"           in monitoring,           evaluating,       and
recommending       improvements       in programs;          providing      professional       and
technical      assistance;      and collecting           and disseminating          information.
 In addition,      approximately        two-thirds         of the respondents          said that
the Council       should be reauthorized             because      it is doing a good job
coordinating       federal    assistance        programs for the homeless.

Conclusions

         Under the leadership          of the current         Chairman and Executive
Director,      the Council      has made substantial             improvements        to correct
past problems.         The creation        of the 10 full-time            regional
coordinators       has strengthened           the Council's       field     coordination
efforts.       In addition,      state      officials      and local       assistance
providers      we contacted      said that         the Council's        activities       and
operations       were somewhat to very effective.                   Also, the Council's
1989 annual       report    focused on federal            assistance       efforts     for the
homeless      and made recommendations               that we believe         will  be useful    to
the Congress in its policy               deliberations.

        Therefore,        in our July 1990 report,      we recommended that the
Congress      reauthorize       the Interagency     Council  on the Homeless.   This
reauthorization           would allow the Council      to coordinate  the McKinney
Act programs and help to ensure that the homeless receive                  the
assistance       the Congress provided         through the McKinney Act.
                                               12
FEMA'S EMERGENCY FOOD AND SHELTER PROGRAM

       I will     now discuss   FEMA's EFS program,   which is an important
source of funds for thousands of homeless shelters            and assistance
providers.        Under title   III of the McKinney Act, the program is
designed      to get funds quickly    into the hands of food and shelter
providers       to alleviate  the most pressing    needs of homeless persons.

       EFS is the single     largest     McKinney Act program.           The EFS
program was established        to provide      supplemental     funds for homeless
shelters    and other service      organizations       for items such as food,
supplies    for shelters,    and rental      and utility      assistance       to
households.      Since passage of the McKinney Act in 1987, funding                    for
the program totaled       $495 million.        All 50 states,       plus Washington,
D.C., and six territories         receive     EFS funding.       In fiscal       year
1989, about 65 percent       of EFS funds was used to supplement                  the need
for emergency food, shelter          and supplies;       the remaining       35 percent
was used for assistance,         such as rent,      mortgage,      and utility
payments,     to prevent   homelessness.

       The EFS funds are distributed                   by a national     board, which is
chaired     by FEMA and administered                by the United Way. The board's
membership,       in addition        to FEMA, includes          six national       charitable
organizations.           The funding        allocation      decisions    are based on
several     factors,       including     current       annual national        unemployment
rates,    local     totals      of unemployed persons,            and total      numbers of
persons below the local poverty                   level.     The fiscal       year 1990
appropriation         was allocated         by the national        board to about 2,200
state and local boards,              which in turn distributed              the funds among
almost 9,000 service             providers.

        Although    we have not evaluated    the effectiveness       of the EFS
program,      in our May 1989 report    we identified     problems with the
timeliness      of FEMA's program funding.       Many service     providers
                                             13
complained       that they did not receive        EFS funds in time for the
beginning       of winter,     when demand for shelter      and food increased
significantly.          In following     up on our earlier    work, we have
learned      that FEMA has shortened        the time it takes to send out the
funds to service          organizations.      For example,   FEMA sent out its
first     checks for the 1989 allocations          in early   November, as
compared with a first            check date of January the year before.




        Mr. Chairman,    this concludes      my statement.       I am also
providing     two attachments:     one listing       the federal    properties
applied    for and/or leased or permitted          for homeless use as of
September 30, 1989, and another          listing     the GAO reports     issued on
homelessness     as of July 1990.       I would be pleased        to respond to any
questions     you or other members of the Committee may have.




                                                                                      i



                                       14
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ATTACHMENT II                                                                   ATTACHMENT II
          GAO REPORTS ON HOMELESSNESS AS OF JULY 19,                            1990




                Homelessness:  Changes in the Interagency     Council                               on
                the Homeless Make it More Effective(GAO/RCED-90-
                172, July 11, 1990).
                Homelessness:    McKinney Act Reports Could                            Improve
                Federal Assistance    Efforts(GAO/RCED-90-121,                           June 4,
                1990).

                Homelessness:       Too Early to Tell What Kinds of
                Prevention    Assistance    Work Best(GAO/RCED-90-89,
                Apr. 24, 1990).
                Homelessness:   McKinney Act Programs and Funding                                 for
                Fiscal  Year 1989(GAO/RCED-90-52,  Feb. 16, 1990).
                Homelessness:    Homeless and Runaway Youth Receivinq
                Services   at Federally  Funded Shelters(GAO/HRD-90-
                45,      Dec.   19,     1989).

                Homelessness:    Additional    Information on the
                Interagency   Council   on the Homeless(GAO/RCED-89-
                208FS, Sept. 22, 1989).
                Children  and Youths:  About 68,000 Homeless                              and
                186,000 in Shared Housing at Any Given
                Time(GAO/PEMD-89-14,  June 15, 1989).
                Homelessness:              HUD's and FEMA's Progress  in
                Implementing            the McKinney Act(GAO/RCED-89-50,                    May
                11, 1989).
                Status of the Activities   of the                    Interagency          Council
                on the Homeless(GAO/T-RCED-89-16,                       Mar. 15,        1989).

                Welfare Hotels:       Uses, Costs,                 and
                Alternatives(GAO/HRD-89-26BR,                      Jan.   31,    1989).
                Homeless        Mentally             Ill:   Problems   and Options         in
                Estimating            Numbers          and Trends(GAO/PEMD-88-24,            Aug.
                3,    1988).




                                                21
ATTACHMENT II                                                   ATTACHMENT II
                Implementation    of Programs      Under Titles   III and IV
                of the Stewart    B. McKinney      Homeless Assistance
                Act(GAO/T-RCED-88-16,     Jan.     26, 1988).
                Homelessness:     Implementation      of Food and Shelter
                Programs Under    the McKinney      Act(GAO/RCED-88-63,
                Dec. 8, 1987).
                Homelessness:   A Complex Problem and the         Federal
                Response(GAO/HRD-85-40,  Apr. 9, 1986).
                Federally Supported Centers Provide   Needed Services
                for Runaway and Homeless Youth(GAO/IPE-83-7,   Sept.
                26,   1983).




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