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We performed a review of the U.S. Department of Housing and Urban Development’s (HUD) monitoring and tracking of Continuum of Care (CoC) grantees that have been slow to spend their grant funds.  Our objectives were to determine whether HUD was effectively tracking and monitoring CoC grant spending and to determine the impact of COVID-19 on CoC grantee spending.

HUD generally tracked and monitored its grantees; however, it did not prioritize grantees that encountered challenges in spending their CoC grant funds before the grants expired.  This condition occurred because HUD did not have written guidance that detailed how field offices should review grantees for spending issues.  Between 2017 and 2020 HUD recaptured nearly $257 million from CoC grantees that had not fully spent their funds.  While several factors outside of HUD’s control contributed to the spending challenges, improved tracking and monitoring could help ensure that the grantees timely address those factors and mitigate their impact.  Without proactive measures, grantee spending challenges will likely continue, leading to unused funds that could otherwise have gone toward addressing homelessness.  In addition, although the pandemic did impact how CoC grantees carried out their programs and some grants had to be temporarily put on hold, overall nationwide CoC grant fund spending was not significantly impacted in the long term by COVID-19.

We recommend that the Deputy Assistant Secretary for Operations for HUD’s Office of Community Planning and Development (CPD) implement written procedures to ensure consistency among field offices in reviewing spending, potentially preventing up to an estimated $47 million in annual CoC recaptures.  In addition, we recommend that CPD’s Deputy Assistant Secretary of Special Needs Programs design and implement a strategy-intensive training program for grantees.