Summary: GAO examined the Urban Development Action Grant (UDAG) Program, focusing on: (1) the accuracy of the Department of Housing and Urban Development's (HUD) information on the results of completed projects; (2) the participation of small cities in the program; and (3) the requirements governing monies that recipient cities can generate by loaning action grant funds to private developers.
GAO found that, between January 1978 and November 1983, UDAG funded $3 billion in grants to distressed communities for economic revitalization and neighborhood reclamation projects. The HUD information system, however, did not provide complete information on program results realized from the 12 completed projects reviewed by GAO. GAO also found that many of the most economically distressed small cities did not participate in UDAG because they: (1) were unfamiliar with the program; (2) had insufficient city government capacity to plan a program project; and (3) had difficulty obtaining adequate private sector involvement. In addition, many recipients were repaying UDAG loans by developers before completion of the intended UDAG projects, but there is no clear policy on whether cities can use these early repayments for additional community and economic development activities.
