Daily Caller: Millions in HUD funds go out annually with no oversight

The Daily Caller News Foundation has been doing some yeoman’s work in terms of digging through the government’s trash and dredging up the tidbits which the mainstream media misses. This week they have yet another report of government waste and a lack of accountability in handling the public purse. The focus this time falls on an obscure aspect of the Department of Housing and Urban Development (HUD) known as the Section 4 program. Developed under President Clinton, a sizable amount of money is channeled into private hands with “noble intentions” to help the poor. So what happens to that money after it’s handed out and how effective are the recipients in their efforts? Turns out that nobody knows.

More than $429 million worth of noble intentions has been funded with the Section 4 program since its approval as part of the HUD Demonstration Act of 1993. President Bill Clinton and a Democratically-controlled Congress intended for Section 4 to help local groups combat poverty through a bureaucratically pliable process of “capacity building.”

Cato Institute Director of Tax Policy Studies Chris Edwards told TheDCNF, “‘capacity building’ is just Washington-speak for bureaucracy and paper-pushing.”

Throughout its more than two decades in existence, neither HUD nor Congress have systematically monitored how Section 4 funds are spent or what kind of results are obtained. Neither, apparently, has the independent inspector general for HUD.

This is a fairly lengthy report but I hope you take the time to read it because this smells like trouble on a very large scale. This money, adding up to $30M to $40M per year, is being given out to just three independent groups. They are Enterprise Community Partners, Local Initiatives Support Corporation and Habitat for Humanity International. Once disbursed, the money is completely in the hands of those groups and who they distribute the cash to from there is completely up to them. But if we’re talking about tens of millions of dollars, why don’t we know what they’re doing with the money? The Daily Caller got an answer but you’re probably not going to like it.

“The Deputy IG for Audit does not recall the Office of Audit doing an analysis of HUD’s administration of HUD’s Section 4 Capacity Building for Community Development and Affordable Housing Grants since 1993,” said Deputy Counsel to the IG Richard K. Johnson to TheDCNF. “Short answer is that it is a matter of resources.”

“Congress hasn’t the time or incentive to oversee this program, just like it doesn’t for the vast majority of the more than 2,300 federal subsidy programs,” Edwards said. “Most federal subsidy programs get very little oversight. If it stays quiet and out of the news, Congress won’t ask the Government Accountability Office to do a report on it.”

Is there any reason to check into where the money is going? In the case of at least one of the three groups – Enterprise Community Partners – the Daily Caller previously found that more than 40% of the money they got from the taxpayers went to salaries for their executives and staff while only 25.9% went toward grants to the ground level groups who are supposed to be helping the poor. And where do those grants go? That’s pretty hazy as well, but you have to ask yourself the obvious questions here. When there is government money (or “free cash”) showing up year after year and there is absolutely nobody asking any questions about what happens to it, what do you suppose is going to happen? Human nature provides the unfortunate answer in too many cases.

Good reporting work by the Daily Caller. It’s just a shame that the news is so dubious.