House Subcommittee Finds $770 Million in Questionable HUD Spending

Last week, members of the House Financial Services Oversight and Investigations Subcommittee examined more than $770 million in questionable costs from spending programs of the Department of Housing and Urban Development (HUD).

Testifying before the Subcommittee, HUD Inspector General David Montoya provided a report that identified these “questionable” costs and also included recommendations for putting $739.5 million in HUD funds to better use.

The subcommittee found that HUD’s largest programs, including disaster relief programs and the Community Development Block Program (CDBG), lacked proper oversight, making them “especially vulnerable to waste, fraud and abuse.”

“Over the years, HUD has failed to adequately account for how taxpayer funds are being spent in the CDBG program, leading to wasteful spending on frivolous pork barrel projects,” said Subcommittee Chairman Patrick McHenry (R-NC).

The disbursement of program funds were a topic of discussion, as critics have noted that funds—particularly CDBG funds—often end up diverted from communities with the greatest housing needs and are used instead for parks, pools, street signs and community centers.

HUD’s disaster relief programs were also scrutinized by the Subcommittee, as several members expressed concern disaster assistance is not going to the people that need it.

A reason for this concern is the rate at which HUD disburses disaster relief funds.

About 89% of funds for Hurricanes Katrina, Rita and Wilma were disbursed to help those affected by the storms, while 11% of those funds have not been disbursed, according to Rep. Andy Barr (R-KY).

However, these funds that are still outstanding in the Gulf Coast states are translating to needs not yet met by the program, responded Montoya.

In its oversight plan for the 113th Congress, the Financial Services Committee noted its concern about questionable uses of CDBG funds.

“The Committee will consider ways to make the CDBG program more effective and targeted towards extremely low-income communities,” writes the report submitted by Committee Chairman Jeb Hensarling. “In addition, the Committee will review the eligible activities and oversight and administration of the program with the aim of ensuring that funds are used in an appropriate manner.”

Written by Jason Oliva

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