Best Practices for Community Block Grant Use

The key to optimizing Community Block Grants is to implement best practices and working with experts in a variety of fields

What Happened?

After 40 years, the federal Community Development Block Grant Program continues to provide valuable funding to meet neighborhood development needs. The key to optimizing the funding opportunity is to implement best practices and working with experts in a variety of fields.

CDBG Disaster Recovery Best Practices

The U.S. Department of Housing and Urban Development created the Community Development Block Grant – Disaster Recovery program to provide funding to local communities trying to recover in the aftermath of a disaster. The goal of these grants is to provide local governments, businesses, homeowners and residents with assistance to rebuild what was lost or damage and regain economic stability.

One specific aspect of this grant program is the homeowner assistance component, which connects private homeowners with HUD funding, rather than going through governmental bodies. Local government agencies, however, are still tasked with distributing the disaster recovery funds as well as report on the results. This requires local agencies to:

  • Design and implement a distribution program
  • Develop and deploy an allocation and reporting system
  • Implement and review procedures and process controls
  • Meet certification requirements
  • Prepare audits
  • Monitor programming

According to research at Solix, there are challenges associated with the three main processes to consider when efficiently providing homeowners with disaster recovery assistance:

  • Program Establishment: Agencies must define requirements so policies and procedures comply with federal standards. Agencies should select a partner with experience in natural disaster recovery assistance programs to simply the process, which is usually inhibited by limited resources. Furthermore, departments must establish guidelines and operating procedures to achieve local objectives that also comply with federal regulations. Develop a communication plan to ensure the application process is clear and simple.
  • Eligibility Determination: To adhere to strict compliance requirements, create standardized applications and forms that have clear instructions, while allowing for flexibility in the processes so alternative forms of documentation can be accepted as well. These forms include proof of damage, personal identification and proof of residence – some of which may have been lost or damaged in the disaster.
  • Award Calculation: To determine who will receive assistance, agencies must evaluate individual damage assessment, income levels and duplication of benefits reviews, among other factors. Errors in the individual damage assessments can result in awardees having to pay HUD back for the funding, and must therefore be conducted with extreme scrutiny. To expedite the verification of benefits, agencies should have a strong relationship with the National Flood Insurance Program through FEMA for an easier review process.

Each process along the way requires input from federal funding experts, as well as experienced professionals project management, design and implementation. To ensure no federal dollars are squandered during the process, the processes must be flexible to adapt to the evolution of needs from the community.

Unspent Funds

While most communities have no problem spending all federal funding on community development projects, some are able to cut costs and have extra money available at the end. Fitchburg, Massachusetts, for example, recently found unspent Community Development Block Grant funding that the city will allocate toward other public services, Sentinel & Enterprise News reported.

Historically, Fitchburg would use some of its Community Development Block Grant funding to pay for the local police department’s domestic violence advocate. This year, the police department received a $23,000 grant from the Executive Office of Public Safety to fund the position, leaving extra CDBG dollars on the table, Sentinel & Enterprise News reported.

Fitchburg City Council members are considering dividing the remaining funds among three community programs:

  • United Neighbors of Fitchburg’s Building Leadership and Inspiring Self-Sufficiency
  • YMCA’s Spartacus intervention for at-risk teens
  • Montachuett Interfaith Hospitality Network housing and self-sufficiency for homeless families

The city council is looking at historical funding levels for each of the programs to determine which has experienced the most cuts when deciding how best to allocate the available funds. All three of the community programs have seen funding levels decline in recent history and would greatly benefit from a boost from the grant funding, Sentinel & Enterprise News reported.

Community Development Block Grants

The U.S. Department of Housing and Urban Development’s Community Development Block Grant Program was first launched in 1974, and has since invested $144 billion in communities across the country working to improve delivery of services, public facilities and affordable housing resources. The CDBG awards are allocated to state and local governments based on population, poverty and other housing variables.

Every year, the CDBG program allocates 95 percent of its available funds in activities specifically designed to assist low- and moderate-income populations. In 2014, the CDBG program helped 28,000 individuals acquire permanent employment or maintain existing jobs, while also rehabilitating 95,000 homes. These improvement projects helped 3.3 million residents gain a sense of stability to support fiscal growth and self-sufficiency.

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