**CHAPTER 21**

**Environmental Monitoring**

21-1 [Purpose.]{.underline} The purpose of this Chapter is to provide a
consistent methodology for conducting in-depth environmental monitoring
of "Responsible Entities" (REs) under 24 CFR Part 58 (hereinafter
referred to as "Part 58") to assure compliance with the National
Environmental Policy Act (NEPA), other related laws and all applicable
environmental regulations. The regulations at 24 CFR 58.77(d) establish
broad guidelines for monitoring of environmental activities. Basic
instructions for monitoring RE compliance with environmental regulations
found in Parts 50 and 58 are also provided, as they pertain to all HUD
programs and recipients of HUD grant funds.

21-2 [Roles and responsibilities]{.underline}. This Chapter is to be
used primarily by HUD Regional Environmental Officers (REOs) and Field
Environmental Officers (FEOs) and, to a lesser degree, by Community
Planning and Development (CPD) Representatives. REOs/FEOs have primary
responsibility to conduct or assist in monitoring HUD grantees for
environmental compliance and conduct in-depth monitoring. CPD
Representatives, who are responsible for oversight of CPD competitive-
and formula-allocated programs, assist the REOs/FEOs in targeting
Departmental monitoring resources through their assessment of
environmental performance (see Exhibit 21-1). The information obtained
from these reviews will be a primary source of information for REOs/FEOs
in their risk analyses and decision-making about in-depth monitoring and
more intensive assessment of RE performance.

REOs/FEOs are encouraged to consider remote monitoring only as a last
resort when travel resources are inadequate. Remote monitoring cannot
substitute for the need to verify environmental review procedures of REs
on site. Remote monitoring, when done, should seek to gather the
information described in the procedures for remote environmental
monitoring provided below, and the REO/FEO should provide the RE with a
formal assessment of compliance in a letter to that RE's environmental
compliance officer.

### 21-3 [Applicability.]{.underline} This guidance on environmental monitoring applies to all CPD programs using statutory authorities that permit state, local, and tribal governments to assume HUD\'s responsibilities for the administration of the National Environmental Policy Act of 1969 (NEPA) and the related statutes, Executive Orders, and regulations set forth in Section 58.5. Covered programs are listed below with regulatory citations for environmental compliance in parentheses: 

> A. Title I of the Housing and Community Development Act of 1974, in
> accordance with section 104(g) \[42 U.S.C. 5304(g)\]. (Note: The
> states and local governments funded under the Community Development
> Block Grant (CDBG) program serve as Responsible Entities that assume
> environmental review authority for many of HUD\'s programs under the
> provisions of Part 58.). Grants to State and local governments
> include:
>
> 1\. Community Development Block Grants---Entitlement \[24 CFR
> 570.604\],
>
> 2\. Community Development Block Grants for States and Small
> Communities \[24 CFR 570.604\],
>
> 3\. Section 108 Loan Guarantee \[24CFR 570.604 and 24 CFR
> 570.704(d)\],
>
> 4\. Economic Development Initiative (EDI) Grants, and,
>
> 5\. Brownfield Economic Development Initiative (BEDI) Grants.
>
> B. Title IV of the McKinney-Vento Homeless Assistance Act, in
> accordance with section 443 (42 U.S.C. 11402). Grants to States and
> local governments, private nonprofit organizations, and housing
> agencies, including:
>
> 1\. Emergency Shelter Grants \[24 CFR 576.57(e)\],
>
> 2\. Supportive Housing Grants \[24 CFR 583.230\],
>
> 3\. Shelter Plus Care Grants \[24 CFR 582.230\],

4.  Section 8 Moderate Rehabilitation Single Room Occupancy for Homeless
    Individuals \[24 CFR 882.804(c)\].

> C. Title II of the Cranston-Gonzalez National Affordable Housing Act
> (NAHA), in accordance with section 288 (42 U.S.C. 12838). Grants to
> States and local Participating Jurisdictions and insular areas,
> including:
>
> 1\. HOME Investment Partnerships Grants (24 CFR 92.352).
>
> D. Competitive grants beginning with fiscal year 2001 and all formula
> grants, in accordance with section 856(h) of the AIDS Housing
> Opportunity Act \[42 U.S.C. 12905(h)\]; all grants for fiscal year
> 1999 and prior years, in accordance with section 207(c) of the
> Departments of Veterans Affairs and Housing and Urban Development, and
> Independent Agencies Appropriations Act, 1999 (Pub. L. 105-276)
> including:
>
> 1\. Housing Opportunities for Persons with AIDS. Grants to States and
> local governments, private non-profit organizations and housing
> agencies \[24 CFR 574.510\].

21-4 [Environmental Monitoring Objectives]{.underline}. The three broad
objectives in reviewing environmental performance are described in the
following paragraphs.

A.  [Procedural Compliance]{.underline}. One purpose of environmental
    monitoring is to determine whether the RE has complied with the
    procedures and requirements of Part 58, "Environmental Review
    Procedures for Entities Assuming HUD Environmental
    Responsibilities." The RE's Environmental Review Record (ERR) and
    supporting documents shall be verified and reviewed to see that Part
    58 requirements have been met.

B.  [Environmental Quality]{.underline}. To comply fully with NEPA and
    related environmental laws, Executive Orders and regulations, the RE
    is required to consider the environmental impact of the various
    projects subject to review and their surroundings in its
    decision-making. The RE\'s environmental assessments required under
    Part 58 (documented in the ERR) shall be examined to determine
    whether the RE is adequately assessing these projects' impact on the
    environment and the environment\'s impact on the projects being
    reviewed.

C.  [Technical Assistance]{.underline}. The review of procedural
    compliance and environmental quality not only can identify
    strengths, but also may indicate deficiencies in the RE\'s program.
    Although deficiencies require correction, the broader objective is
    to provide technical assistance to the RE in order to remedy the
    problems and to reduce or eliminate incidences of non-compliance in
    the future.

    5.  [state environmental monitoring objectives.]{.underline} This
        Chapter contains one Exhibit (21-13) for assessing environmental
        compliance where the State assumes HUD environmental
        responsibilities. There are four specific objectives for
        monitoring the environmental performance of States:

> A. To verify that the State is meeting its environmental obligations
> and is fully discharging its responsibilities under NEPA and other
> provisions of law in conformance with the environmental regulations in
> 24 CFR Part 58;
>
> B. To assess the effectiveness of the State\'s program for monitoring
> recipients;
>
> C. To determine State compliance in meeting the requirements
> concerning the certification process and Release of Funds; and
>
> D. To provide technical assistance to the State in achieving
> compliance with environmental requirements.

6.  [Use of Risk Analysis and Selecting Grantees for On-site
    Monitoring.]{.underline} REOs/FEOs must be guided by all current
    Departmental guidance on risk analysis as a method to establish
    priorities for monitoring. Risk analysis should determine which RE
    to visit on-site, what CPD program areas pose the greatest concern
    for potential fraud, waste, or mismanagement, and which of the RE's
    projects should be the focus of the monitoring visit. Risk analysis
    should be the primary mechanism for the environmental staff to focus
    available resources, for both remote and on-site monitoring.

> REO/FEO staff shall use the current HUD Notice on "Implementing Risk
> Analysis for Monitoring Responsible Entities for Compliance With 24
> CFR Part 58." (See
> <http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=CPDN&s1=@docn&l=100&SECT1=TXTHLB&SECT5=HEHB&u=./hudclips.cgi&p=1&r=28&f=G>.)
> This Notice provides factors for use in determining risk, provides the
> various components that should be incorporated into risk
> considerations, and weights each factor so that a final determination
> can be made about each Responsible Entity. The HUD Notice requires CPD
> Field Offices to be involved in the risk assessments. Exhibit 21-1 of
> this Chapter provides guidance for CPD Field Office input into the
> Environmental Risk Analysis process.

21-7 [Developing an Environmental Monitoring Strategy]{.underline}. At
the beginning of CPD's fiscal year, each FEO shall consult with the REO
and CPD Field Office Directors in all Field Offices for which the FEO
provides environmental assistance. The purpose is to develop a
monitoring strategy for the upcoming year based on risk analysis. The
strategy will establish a framework for assuring adequate monitoring of
RE compliance consistent with available resources. The monitoring
strategy is the responsibility of the FEO and should be conveyed to the
REO who is responsible for a regional monitoring strategy to be
submitted to the Headquarters Office of Environment and Energy for
review and comment.

A.  [Management Plan]{.underline}. The Monitoring Strategy must be
    consistent with the Department's Management Plan objectives and
    follow any applicable guidance contained in that Plan. Goals for
    in-depth, on-site monitoring contained in the Management Plan shall
    be the responsibility of the FEO.

> B. [Monitoring Schedule]{.underline}. The FEO shall develop an annual
> schedule of all in-depth, on-site environmental monitoring visits
> planned for the fiscal year. It should establish realistic on-site
> monitoring goals for each quarter of the fiscal year to enable the
> REO/FEO to accomplish the overall strategy and goals. The schedule
> should be distributed to the Program Office Directors and the Field
> Office Director.

21-8 [Areas of Review and Levels of Review]{.underline}. Part of the
environmental monitoring strategy should be to determine what areas of
concern exist, if any, and how comprehensive the monitoring of an RE
should be. Risk analysis should provide distinct areas of focus for
monitoring activities and should also be used to make the most effective
and efficient use of time by concentrating available time and staff to
the identified areas of risk. Exhibit 21-1 is for use by CPD field staff
to use when conducting program monitoring, where indicated. Exhibits
21-2 through 21-12 are to be used for environmental monitoring of all
REs, including States when they act as REs. Exhibit 21-13 is to be used
exclusively for monitoring State-administered CPD programs in cases
where the State does not act as an RE. All Exhibits may not be
applicable for a given project reviewed and some Exhibits will have no
bearing on any projects in an RE's ERR.

21-9 [Pre-monitoring Preparation for Environmental Monitoring (In-Depth
and Limited).]{.underline}

> A. [Review of Environmental Data]{.underline}. A wide array of program
> and environmental processing data is available to determine how REs
> conduct environmental review activities. This information includes
> Consolidated Plans, Annual Action Plans, Comprehensive Annual
> Evaluation and Performance Reports (CAPERs) for CPD programs, release
> of fund logs, draw down information, prior monitoring information,
> audit information, and citizen complaints. It is the responsibility of
> the REO/FEO, as part of their preparation, to seek out all pertinent
> data on program performance and environmental performance from all
> sources, including CPD Field Office Program Directors.
>
> B. [Subpart H Pre-Review]{.underline}. The Release of Funds, as
> described in Subpart H of Part 58, should be a particular source of
> review prior to the monitoring visit. The REO/FEO should contact the
> CPD Field Office Director for all CPD programs subject to Part 58. The
> REO/FEO should review CPD program draw down records for projects for
> which the RE should have completed the environmental review. The
> record of draw downs should be compared to the Field Office\'s Request
> For Release of Funds log to ensure that projects subject to Part 58
> successfully and timely completed all necessary compliance actions. If
> there are gaps in coverage, the REO/FEO should follow up any
> discrepancies during the monitoring of the RE and recipient
> organizations. This pre-review analysis should also include questions
> of the CPD Director concerning objections that may have been received
> concerning non-compliance, whether any objections have been forwarded
> for any projects during the fiscal year, and whether the objections
> were forwarded timely.
>
> C. [Pre-Monitoring Preparation for In-Depth Monitoring]{.underline}.
> The results of the REO/FEO risk analysis will indicate the areas of
> risk to be considered and the appropriate Exhibits needed to conduct
> the monitoring. In reviewing the most recent program year\'s projects
> and activities, it may become necessary to monitor previous program
> years to assess accurately the RE\'s performance. The decision to
> monitor more than the current program year is at the discretion of the
> REO/FEO. However, when a project is a continuation of a previously
> commenced activity and no new environmental review is required under
> Sections 58.47 and 58.53, the prior environmental assessment or EIS
> upon which the decision is based shall be reviewed by the REO/FEO.
>
> D. [Communication Between RE and the Public Housing
> Authority]{.underline}. It is important to note that, where
> applicable, when PHAs have received funding under HUD programs listed
> at Section 21-3.B of this Chapter, monitoring may extend to a Public
> Housing Authority (PHA) if pre-visit analysis raises concerns about
> environmental procedures and/or lack of communication between the RE
> and the PHA.
>
> E. [Notification of Visit.]{.underline} The RE should be notified in
> writing of the upcoming monitoring visit or anticipated remote
> monitoring at least two weeks prior to the scheduled visit.
> Notification should be addressed to the Departmental director
> responsible for management of applicable HUD programs and should
> provide an overview of the visit, including the projects, programs,
> and sites that may be involved in the review. If the review will
> include visits to the PHA and/or public housing sites, the RE should
> be informed of the HUD reviewer's intention to include the PHA as part
> of the visit. If the review is to be conducted remotely, the
> procedures described below are to be followed.

21-10 [REMOTE AND On-site Monitoring]{.underline}. Environmental
monitoring includes remote and on-site monitoring. Procedures for these
types of monitoring are described below. The decision to monitor
remotely or on-site will be guided by the risk analysis and described in
the annual management plans submitted by the REOs/FEOs.

> A. [Remote Monitoring.]{.underline}

1.  [Rationale]{.underline}. When circumstances do not require or permit
    an on-site monitoring visit, remote monitoring may be required. The
    purpose of remote monitoring is to obtain sufficient information
    from the RE so that the FEO and CPD Representative can determine if
    further action is necessary.

2.  [Remote Monitoring Procedures]{.underline}. Remote monitoring
    requires that the REO/FEO examine documents from the RE's ERR. The
    REO/FEO must make a written request of materials in the notification
    of remote monitoring and specify a date by which materials should be
    received. The set of documents must be representative of the overall
    program of the RE, its various HUD/CPD programs, and their
    complexity. However, the request for documents should not represent
    an unreasonable burden on the RE. The request should emphasize the
    more complex projects undertaken by the RE where environmental
    concerns are greatest.

3.  [Use of Exhibits]{.underline}. The REO/FEO is expected to document
    the examination of the ERR in much the same manner as an on-site
    visit, using the relevant Exhibits 21-2 through 21-13 and including
    supporting documentation. The REO/FEO should include pre-monitoring
    examinations of the RE's RROF in the remote monitoring file and any
    other preparatory information undertaken as part of the review.

4.  [Remote Monitoring Letters, Findings, and Sanctions]{.underline}. A
    letter to the RE is to be composed by the REO/FEO that summarizes
    the results of the review of documents and should be sent within 30
    days of the receipt of materials from the RE. If the remote
    examination of the RE's ERR indicates a clear violation of statutory
    or regulatory requirements, then the Program Office Director is to
    review and consult on the findings and the tone of the letter as
    well as be the signatory on the letter. If the remote monitoring
    raises questions regarding an identified deficiency, the monitoring
    letter should state that the REO/FEO will make an on-site visit at
    the earliest possible time in order to confirm the violation and, if
    verified, determine the corrective action(s) needed to resolve the
    deficiency.

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B.  [On-Site Environmental Monitoring]{.underline}.

> 1\. [Rationale]{.underline}. The REO/FEO conducts in-depth monitoring
> of all REs under CPD programs to determine procedural compliance with
> Part 58 and related laws, a substantive review to assess whether the
> RE is performing its required responsibilities for relevant
> environmental areas, and other requirements listed in Section 58.6.
>
> 2\. [Sanctions]{.underline}. HUD has the authority as provided in
> Section 58.77(d)(1)(v) to initiate appropriate sanctions for
> non-compliance under Part 58. Sanction authority rests with the HUD
> program office and sanctions are subject to the authorities of the
> individual program. The Headquarters program office that is directly
> impacted by non-compliance with environmental provisions is to be
> consulted when Field Office attempts to correct identified
> deficiencies have not been successful and more progressive sanctions
> may is needed. The REO/FEO plays a consultative role in sanctions
> only.
>
> 3\. [Procedural Review]{.underline}. Use of the Exhibits should
> correspond to the results of the REO/FEO risk analysis which should
> focus the review on specific areas of environmental concern. Special
> attention should be given to ensuring that there has been no
> commitment of funds or commencement of physical development activities
> prior to Release of Funds by the RE environmental staff.
>
> 4\. [Substantive Review]{.underline}. In conjunction with information
> generated during the pre-monitoring analysis, the REO/FEO is to assess
> the environmental processing procedures to determine compliance with
> Part 58, Subpart H, "Release of Funds." This will include an extensive
> follow-up to the REO's/FEO\'s review of the CPD Field Office's draw
> down records. The REO/FEO should determine whether relevant
> environmental areas identified in the statutory and environmental
> assessment areas of the most current Environmental Assessment formats
> issued have been addressed in the environmental review of a project.
>
> 5\. [Technical Area Assessments]{.underline}. After a substantive
> review of processing procedures and environmental review procedures,
> the REO/FEO should review the assessment of each environmental area
> for technical adequacy and completeness, using Exhibits 21-2 through
> 21-12, as applicable to every project reviewed.
>
> 6\. [Documentation]{.underline}. When conducting in-depth monitoring,
> the REO/FEO is to document the degree to which the RE\'s ERR complies
> with the regulatory requirements found at 24 CFR Part 58.
>
> 7\. [Review of Conditions and Mitigating Measures]{.underline}. The
> REO/FEO is to identify all major actions for which the RE\'s
> environmental review required specific conditions (such as purchase of
> flood insurance) or mitigating measures to fulfill requirements of the
> environmental review process. Since the RE is required to use all
> appropriate means to ensure that those conditions or safeguards are
> implemented, such projects should be carefully reviewed by the REO/FEO
> to determine that such conditions and measures were incorporated into
> the project. Site visits to specific projects should be undertaken by
> the REO/FEO if there is any evidence that conditions or measures have
> not been met or maintained.

8.  [File Review and Site Visits]{.underline}. When conducting on-site
    monitoring, the REO/FEO should examine a representative sample of
    the RE's ERR files. The selection of project files to be examined
    should include files of sufficient complexity to determine
    compliance with environmental requirements. Environmental concerns
    about which complaints have been registered and objections raised
    should also be included in the sample of project files.

> The REO/FEO should visit project sites where the environmental
> assessment identified mitigating measures to determine whether the
> mitigating measures were implemented as required. The REO/FEO should
> examine sites where ERRs are unsatisfactory to determine where adverse
> environmental impacts exist. The REO/FEO should also consider the need
> for on-site inspection of PHA records and project sites funded by CPD
> programs using a risk-based approach.
>
> C. [Procedural Review of States]{.underline}. Exhibit 21-13 is the
> primary guide to be used in monitoring States. This Exhibit emphasizes
> compliance with the requirements that the State:
>
> \(a\) approve the Release of Funds and certification on particular
> project(s) of local government recipients (for State-administered CPD
> Programs only); and
>
> \(b\) establish and implement a program for monitoring recipient
> environmental compliance, particularly to ensure that funds are not
> committed prior to the State\'s Release of Funds from environmental
> conditions.

21-11 [Post-Monitoring Actions.]{.underline}

> A. [REO/FEO Environmental Monitoring Letters to REs]{.underline}.
> Monitoring letters covering in-depth monitoring conducted by REOs/FEOs
> shall follow the procedures established in Chapter 2 of this Handbook.
> Such letters are to be drafted by the REO/FEO who has the discretion
> to propose all necessary items in the letter that pertain to
> environmental issues such as the correction or mitigation of existing
> or potential environmental conditions. Where the letter addresses
> minor environmental issues and contains no findings, it may be signed
> by the REO/FEO. However, monitoring letters originated by and signed
> by REOs/FEOs must have the concurrence of all appropriate CPD Field
> Office Program Directors. Monitoring letters that require corrective
> action(s) as a result of identified deficiencies cannot, however, be
> originated and signed by FEOs. Sanction authority rests with the CPD
> Field Office Program Directors.
>
> B. [REO/FEO Concurrence]{.underline}. When the REO/FEO is part of a
> team monitoring or, in the case where environmental findings are made
> independent of the REO/FEO, the REO/FEO shall concur in any
> environmental findings and recommendations originating from the CPD
> Field Office prior to dispatch of the letter.
>
> C. [Headquarters Concurrence]{.underline}. Monitoring letters
> addressing complex environmental issues where Headquarters management
> or specialists have been consulted require the concurrence of the
> Headquarters' Office Environment and Energy (OEE) as well prior to the
> submission to the Field Office Director.
>
> D. [Copies to Headquarters]{.underline}. One copy of the final
> monitoring letter to any RE shall be sent to the Headquarters' OEE.
>
> E. [Tracking Corrective Actions]{.underline}. The REO/FEO shall
> follow-up and track an RE's progress in correcting deficiencies,
> including re-visiting sites as required. All environmental findings
> and concerns shall be entered in the tracking system by the CPD
> Representative assigned to the RE in accordance with the procedures
> for the Grants Management Process/System. The REO/FEO is responsible
> for assessing the adequacy of the RE\'s response to environmental
> findings and recommendations and for ensuring the closeout of
> environmental findings. The REO/FEO shall maintain files on all
> applicable documents for environmental monitoring.
>
> In the event that the RE fails to meet a target date for corrective
> actions, a telephone call is appropriate and shall be documented. If
> the RE has not responded within 30 calendar days after the date the RE
> was advised to take corrective action, a letter shall be sent
> requesting the status of the corrective action and warning the RE of
> the possible consequences of failure to comply as provided under
> applicable program sanction authorities.
>
> When the RE\'s response has been received, the corrective action
> proposed or taken shall be reviewed by the REO/FEO. These reviews
> should be completed within 15 calendar days. If the RE has not taken
> the identified corrective actions, another letter shall be sent to the
> RE, either reaffirming the need to take the identified action(s), or
> specifying additional actions as well as a response due date. Such a
> letter requires the concurrence of the CPD Field Office Director. New
> due dates may be established subject to good faith efforts by the RE
> to resolve a finding. A follow-up visit may be necessary to verify
> corrective action or to provide technical assistance when the RE has
> been unable to resolve or correct the finding.
>
> F. [Closing Environmental Monitoring Findings]{.underline}. When the
> REO's/FEO\'s review indicates the RE has provided satisfactory
> corrective action, the procedures outlined in Chapter 2 of this
> Handbook shall be followed.