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Detailed Information on the
Rural Housing and Economic Development Assessment

Program Code 10002200
Program Title Rural Housing and Economic Development
Department Name Dept of Housing & Urban Develp
Agency/Bureau Name Department of Housing and Urban Development
Program Type(s) Competitive Grant Program
Assessment Year 2004
Assessment Rating Ineffective
Assessment Section Scores
Section Score
Program Purpose & Design 80%
Strategic Planning 62%
Program Management 30%
Program Results/Accountability 7%
Program Funding Level
(in millions)
FY2007 $17
FY2008 $17
FY2009 $0

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments
2006

Administration proposes to consolidate the program into a reformed Community and Development Block Grant program to better target the neediest communities and to achieve more ambitious results.

Not enacted Legislation not enacted.
2006

Developing an automated system to track and monitor grantee's performance measurement data. This will help provide better efficiency measures and evaluations of grantees. This effort will be aligned with the broader community and economic development reforms.

Pending a new contractor to develop the system.
2006

Continuing to develop program policies and procedures to provide oversight and monitoring of grantee activities and performance. Use this information to improve program. This effort will be aligned with the broader community and economic development reforms.

Action taken, but not completed HUD??s CPD field offices are authorized to carryout oversight and monitoring of grantee activities and performance in terms of collecting output and outcome data. In addition, program policies are improved through the annual Notice of Funding Availability (NOFA).
2007

2007

2007

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments

Program Performance Measures

Term Type  
Long-term/Annual Output

Measure: Number of jobs created


Explanation:This output measure describes the number of jobs created as a result of the grant activity.

Year Target Actual
2001 1475 1908
2002 2035 2035
2003 1908 1475
2004 1800 n/a
2005 1800 3737
2006 n/a n/a
2007 2600 854
2008 2600
2009 214
2010 107
2011 53
2012 27
Long-term/Annual Output

Measure: Number of housing units rehabilitated or constructed


Explanation:This output measure consists of the number of housing units rehabilitated or constructed as a result of the grant activity. Includes assistance to existing homeowners and newly constructed affordable housing units.

Year Target Actual
2001 1047 1047
2002 3928 3928
2003 6065 6065
2004 500 n/a
2005 550 2495
2006 n/a n/a
2007 1000 784
2008 1000
2009 196
2010 98
2011 49
2012 25
Long-term Outcome

Measure: Percentage change in participant earnings as a result of employment.


Explanation:This outcome measure depicts the percent change in the participant's earnings as a result of employment at the conclusion of the 36 month grant period.

Year Target Actual
2005 20% 60%
2006 60% 58%
2007 n/a n/a
2008 n/a
Long-term Outcome

Measure: Percent of participants trained who find a job.


Explanation:This outcome measure provides the percent of the participant's trained who find a job at the conclusion of the 36 month grant period.

Year Target Actual
2005 - 78%
2006 78% 45%
2007 30% n/a
2008 n/a n/a
Long-term Output

Measure: Increase in organizational resources as a result of assistance.


Explanation:Quantifies the degree to which the organization grows and expands due to the program grant. This outcome measure describes the organizational resources, in dollars leveraged, as a result of assistance at the conclusion of the 36 month grant period.

Year Target Actual
2005 n/a n/a
2006 n/a n/a
2007 n/a n/a
2008 n/a n/a
2009 n/a n/a
2010 n/a n/a
2011 n/a n/a
2012 n/a n/a
Annual Efficiency

Measure: Annual increase in the average "blended" RHED investment per unit produced will be no more than 3 percent.


Explanation:The average per-unit level of RHED investment in a project is a function of the overall development cost and the availability of other funds, federal and non-Federal, for the project. If development costs such as labor, land, materials, and fees, rise, or higher subsidy levels are required in order to make units affordable to households, the required RHED investment will rise accordingly. Given the above external factors, HUD estimates that the annual increase in the average RHED investment per unit will be less than 3 percent

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score
1.1

Is the program purpose clear?

Explanation: The purpose of the Rural Housing and Economic Development Program is to develop capacity at the State and local level for developing rural housing and for economic development. HUD awards grants to local rural nonprofits, community development corporations and federally recognized Indian tribes to support capacity building and technical assistance. HUD also awards grants for innovate housing and economic development awards in rural areas to federally recognized Indian tribes, State housing finance agencies, State community and/or economic development agencies, local rural nonprofits, and community development corporations.

Evidence: Public Law 105-276 (October 21, 1998) established the Office of Rural Housing and Economic Development which includes the Rural Housing and Economic Development Program and a clearinghouse of ideas for innovative strategies for rural housing and economic development and revitalization.

YES 20%
1.2

Does the program address a specific and existing problem, interest or need?

Explanation: The Rural Housing and Economic Development Program is designed to address the problems of rural poverty, inadequate housing and lack of economic opportunity. In quantifying the need of the program, applicants provide data on poverty and unemployment rates of the target area compared to the national data on poverty and unemployment rates.

Evidence: Data shows rural areas, especially certain regions, have poverty levels above the national rate that indicate broader economic problems. For example, poverty rates among African Americans in nonmetro areas of the Lower Mississippi Delta is 40 percent compared to 12 percent for the nation as a whole. Nearly one-third of Native Americans living on reservations and tribal lands and non-metro Hispanics in the border/colonias region live in poverty. In Central Appalachia, the poverty rate among white non-Hispanics is twice the poverty of whites nationwide. HAC found that over half of all nonmetro counties with 20% or higher poverty rates since 1960 are located in these high need regions.

YES 20%
1.3

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: There are a variety of Federal programs that fund activities similar to RHED. Specifically, HUD and USDA programs are duplicative. The U.S. Department of Agriculture oversees many of these programs.

Evidence: The USDA Community Facilities Loan and Grants programs construct or improve rural facilities for healthcare, telecommunications, public safety and public services. The Intermediary Relending Program finances business facilities and community development projects in rural areas. The Rural Business Enterprise Grants program allows rural communities to buy and develop land, construct buildings, plants, access roads, and other infrastructure to facilitate the development of small and emerging private businesses. Within HUD, RHED activities are also eligible under the Non-entitlement Community Development Block Grant program, in which States pass funds to rural areas for housing rehabilitation, public facility improvement, economic development, and assistance to nonprofit entities for community development activities.

NO 0%
1.4

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: A competitive grant process is the appropriate design for this type of rural economic development and capacity building program.

Evidence: Applicants are funded directly to carry out specific initiatives, which gives HUD the ability to target resources to rural areas or regions that lack capacity.

YES 20%
1.5

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The Rural Housing and Economic Development Program aims to support the poorest of the poorest communities. There is a specific focus on beneficiaries in underserved areas including rural areas with very small populations (2,500 population or less), federally recognized Indian tribes, Colonias, The Lower Mississippi Delta Region (8 states, 240 counties/parishes), and Appalachia's Distressed Counties.

Evidence: In quantifying the need of the program, applicants provide data on poverty and unemployment rates of the target area. The average poverty rate of funded applicants is 29.4%, compared to the national average of 11.3%. The average unemployment rate of grantees is 17.1%, compared to the average unemployment rate of 5.9 percent.

YES 20%
Section 1 - Program Purpose & Design Score 80%
Section 2 - Strategic Planning
Number Question Answer Score
2.1

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: HUD requires grantees to provide a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program.

Evidence: Long-term oucome measures include: 1) percentage change in earnings as a result of employment for those participants; 2) percent of participants trained who find a job; 3) annual estimated savings for low-income families as a result of energy efficiency improvements; 4) increase in program accomplishments as a result of capacity building assistance (e.g. number of employees hired or retained, efficiency or effectiveness of services provided); and 5) increase in organizational resources as a result of assistance (e.g. dollars leveraged).

YES 12%
2.2

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: HUD is in the process of developing baselines and setting goals for relatively new measures.

Evidence: HUD has included measures in 2003 and 2004 NOFAs and applicants have begun to report targets.

NO 0%
2.3

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Grantees include a limited number of specific annual performance measures that demostrate progress toward achieving the program's long-term goals as part of their NOFA application. While the program does not currently have efficiency measures they will build the collection of this information into their performance tracking system. The measures will show costs per job created, housing unit rehabilitated, and per business assisted.

Evidence: These performance measures are: 1) number of housing units constructed; 2) number of jobs created; 3) number of participants trained; 4) number of new businesses created; and 5) number of existing businesses assisted.

YES 12%
2.4

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The program has baselines for all its measures, but only one goal for number of housing units rehabilitated or constructed. However, the program does not have efficiency measures so they are not able to receive a Yes on this question.

Evidence: The program has baselines and has revised its targets to reflect 10 percent increases for 2005 above 2004 accomplishments. Additionals targets based on the actual data for the output measures include: 1) number of jobs created (1,623); 2) number of participants trained (7,678); 3) number of new businesses created (303); and 4) number of existing businesses assisted (987). While these measures are not included in the Annual Performance Plan, they are tracked and collected through the performance goal of HUD's Management Plan.

YES 12%
2.5

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The Rural Housing and Economic Development Program grant agreement includes a term that requires all grantees to provide data on performance measures in their semi-annual reports.

Evidence: Data is collected on an annual basis through HUD's local field offices. HUD headquarters has also developed a system for tracking and monitoring these goals. In the future, there is a plan to develop an automated system to track and monitor grantee's performance measurement data which will include economic development programs including the Rural Housing and Economic Development Program.

YES 12%
2.6

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Given the small size and low-priority for the Department, there are no plans to dedicate funds for a study of this program.

Evidence: No studies have been or are planned to completed for this program.

NO 0%
2.7

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Budget requests are not explicitly tied to accomplishment of the annual and long-term performance goals.

Evidence: The FY 2002, 2003, 2004, and 2005 Budgets have not proposed funding for the Rural Housing and Economic Development As a result of this proposal,

NO 0%
2.8

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: In the 2003 NOFA, HUD adopted several rigorous outcome measures to measure the change in capacity of grantees as well as the change in persons and families assisted.

Evidence: The Administration also included performance measures for the RHED program in HUD's FY2005 Annual Performance Plan (APP).

YES 12%
Section 2 - Strategic Planning Score 62%
Section 3 - Program Management
Number Question Answer Score
3.1

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Grantees submit performance information in their semi-annual reports. Initially, applicants submit performance goals under Rating Factor 5 (Achieving Results and Program Evaluation) of the NOFA. HUD uses this information is to adjust program priorities, allocate resources, or take other appropriate management actions. These adjustments and allocations are communicated in the NOFA process.

Evidence: The Rural Housing and Economic Development Notices of Funding Availability (NOFA) requires grantees to include projections of the annual performance measures as a part of the NOFA application. Actual data are collected on an annual basis through HUD's local field offices. As a result, RHED used performance information to adjust program priorities in NOFA. For example, the FY2002 RHED NOFA required applicants to project specific performance measures under a reconstructed Rating Factor 5. The focus was converted from coordination, self-sufficiency and sustainability to achieving results and program evaluation.

NO 0%
3.2

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: HUD managers are rated for performance based upon the Performance Accountability and Communication System (PACS) and the Leadership Development and Recognition System (LDRS) and have been for the last several years. Through a delegation of authority, HUD's Community Planning and Development (CPD) Field Office Directors are charged with the monitoring and oversight of the Rural Housing and Economic Development Program grantees.

Evidence: Under this system, the elements used to rate a manager's performance are linked to the Department's GPRA goals. Ratings, promotions and monetary awards are appropriate to the manager's accomplishments, or lack thereof.

YES 10%
3.3

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Award announcements for the Rural Housing and Economic Development Program must be announced by June 1st. This is a congressionally mandated deadline. After the Secretary makes the official announcements to the Congress, the funds are obligated within a 90-day period. The point of obligation for the Rural Housing and Economic Development Program is the executed grant agreement between HUD and the grantee.

Evidence: Unobligated balances carried forward in 2003 totalled $26 million. Public Law 105-276 (October 21, 1998) establishes the Office of Rural Housing and Economic Development which includes the Rural Housing and Economic Development Program.

YES 10%
3.4

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: No system is currently in place to measure efficiencies and cost effectiveness. However, HUD is currently designing a grants management system called 'EdSys' to support the reporting requirement of economic development programs including the Rural Housing and Economic Development Program.

Evidence: EdSys will be used by the grantees, field office staff and headquarters staff. This system will monitor grantees draw-downs of funds and track information including performance measures (outputs and outcomes).

NO 0%
3.5

Does the program collaborate and coordinate effectively with related programs?

Explanation: Although some partnerships do exist. There is not sufficient evidence that the program coordinates its activities with other similar programs.

Evidence: The Office has coordinated with the Southwest and Colonias initiatives; however, there are no examples of how these partnerships have affected the program operations in a signficant way.

NO 0%
3.6

Does the program use strong financial management practices?

Explanation: The program's financial management practices are consistent with the cash management and grants management laws and procedures.

Evidence: The funds are managed in accordance with the Funds Control Plan.

NO 0%
3.7

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The program does not have a system for evaluating program management and correcting for deficiencies, aside from HUD-wide controls.

Evidence: Once in place, the "EdSys" system mentioned above will allow HUD to identify and correct program management deficiencies.

NO 0%
3.CO1

Are grants awarded based on a clear competitive process that includes a qualified assessment of merit?

Explanation: All grants are awarded on a competitive basis and subject to peer review. HUD employees review, rate, and rank applications based on public criteria. While making funding decisions HUD employees are prohibited from providing advance information to any person (other than an authorized employee of HUD) concerning funding decisions or otherwise giving any applicant an unfair competitive advantage.

Evidence: HUD's regulations implementing Section 103 of the Department's Reform Act of 1989 (42 U.S.C. 3537 a), codified at 24 CFR 4.26(c) and 4.28, apply to the funding competition. Each year, as a result of the competition, HUD funds approximately 100 new grantees.

YES 10%
3.CO2

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: The program has no reporting system in place to ensure a high level of understanding of what grantees do with the resources allocated. While grantees submit performance information in the semi-annual reports to HUD field offices, the number of site visits and audits and tracking of actual expenditures is unclear.

Evidence: Currently, HUD headquarters does not have data organized in a way that gives them adequate oversight of grantee activities.

NO 0%
3.CO3

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: Performance informatioin is collected, but not disseminated in a meaningful way. HUD will work to make public planned and actual performance information available for each grantee.

Evidence: Actual data is collected annually, however, it is kept in HUD field offices and not made transparent.

NO 0%
Section 3 - Program Management Score 30%
Section 4 - Program Results/Accountability
Number Question Answer Score
4.1

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program has not collected information on its outcome measures to demonstrate progress.

Evidence: See questions 2.1 and 2.2 and measures tab.

NO 0%
4.2

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program did not establish targets for its output measures. For the first time, the program has set 2005 targets for some of its performance measures. The program can demonstrate some accomplishments for 2001-2003 grant years.

Evidence: See questions 2.3 and 2.4 and measures tab. The program has set targets for future years, but had not set them for prior years.

SMALL EXTENT 7%
4.3

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: While the program collects performance information from grantees, it has no targets for these measues or developed efficiency measures, making it difficult to demonstrate efficiency improvements over time in achieving program goals or targets.

Evidence: The program does not have data on improved effectiveness or efficiencies.

NO 0%
4.4

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: No evaluations or other documents have compared the Rural Housing program to similar programs.

Evidence: Programs in other agencies such as USDA may be better suited to deal with the problems in rural America this program seeks to address.

NO 0%
4.5

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: No evaluations have been done on this program.

Evidence: To a large degree, the lack of evaluations or studies is due to the small size of this program. The program has only been mentioned in a few GAO reports and HUD studies.

NO 0%
Section 4 - Program Results/Accountability Score 7%


Last updated: 09062008.2004SPR