GAO 

United States Government Accountability Office

Report to the Chairman, Committee on 

Agriculture, House of Representatives 

RURAL WATER 

INFRASTRUCTURE 

Improved 

Coordination and 

Funding Processes 

Could Enhance 

Federal Efforts to 

Meet Needs in the 

U.S.-Mexico Border 

Region

December 2009 

GAO-10-126 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

December 2009

RURAL WATER INFRASTRUCTURE

Improved Coordination and Funding Processes Could 

Enhance Federal Efforts to Meet Needs in the U.S.-

Highlights of GAO-10-126, a report to the Mexico Border Region 

Chairman, Committee on Agriculture, 

House of Representatives. 

A serious problem for U.S. 

communities along the U.S.-Mexico 

border is the lack of access to safe 

drinking water and sanitation 

systems. Inadequate systems can 

pose risks to human health and the 

environment, including the risk of 

waterborne diseases. Numerous 

federal programs provide grants, 

loans, or other assistance to rural 

U.S. communities, including those 

in the border region, for drinking 

water and wastewater projects. 

GAO was asked to determine (1) 

the amount of federal funding 

provided to rural U.S. communities 

in the border region for drinking 

water and wastewater systems and 

(2) the effectiveness of federal 

efforts to meet the water and 

wastewater needs in the region. 

GAO analyzed agency financial 

data; reviewed statutes, 

regulations, policies, and 

procedures; and interviewed 

federal, state, local, and private 

sector officials. 

What GAO Recommends

GAO suggests that Congress 

consider requiring federal agencies 

to develop a coordinated plan to 

improve the effectiveness of 

drinking water and wastewater 

programs in the border region and 

recommends that the agencies take 

steps to comply with statutory and 

regulatory requirements. Because 

USDA and DOD generally believe 

they are in compliance with 

relevant statutory and regulatory 

requirements; they did not fully 

concur with this recommendation. 

GAO believes that its findings and 

recommendations remain valid. 

Seven federal agencies—the Environmental Protection Agency (EPA), the 

Department of Agriculture (USDA), the Department of Housing and Urban 

Development (HUD), the U.S. Army Corps of Engineers (the Corps), 

Economic Development Administration (EDA), the Indian Health Service 

(IHS), and the Bureau of Reclamation (Reclamation)—obligated at least $1.4 

billion for drinking water and wastewater projects to assist communities in 

the U.S.-Mexico border region from fiscal years 2000 through 2008. USDA and 

EPA obligated 78 percent, or about $1.1 billion, of the total $1.4 billion—with 

USDA obligating 37 percent, or $509 million, and EPA obligating 41 percent, or 

$568 million. Agencies provided assistance for a variety of drinking water and 

wastewater activities, such as constructing or improving treatment facilities 

and installing distribution lines. For example, of the $509 million total, USDA 

obligated about $502 million to public utilities or similar entities for 

construction of or improvements to water and wastewater infrastructure. It 

obligated over $7 million to individuals in the border region for household 

projects, such as repairs to indoor plumbing. 

Federal efforts to meet drinking water and wastewater needs in the border 

region have been ineffective because most federal agencies (1) have not 

comprehensively assessed the needs in the region, (2) lack coordinated 

policies and processes, and (3) in some cases have not complied with 

statutory requirements and agency regulations. Although federal agencies 

have assembled some data and conducted limited studies of drinking water 

and wastewater conditions in the border region, the resulting patchwork of 

data does not provide a comprehensive assessment of the region’s needs. 

Without such an assessment, federal agencies cannot target resources toward 

the most urgent needs or provide assistance to communities that do not have 

the technical and financial resources to initiate a proposal for assistance. In 

contrast, IHS has collected data on water and wastewater conditions for each 

tribal reservation. As a result, the agency can select projects that target the 

greatest need. In addition, although some federal agencies recognize the 

importance of a collaborative and coordinated process to increase program 

effectiveness, agencies’ policies and processes are generally incompatible or 

not collaborative with those of other agencies. For example, most federal 

programs require separate documentation to meet the same requirement and 

the agencies do not consistently coordinate in selecting projects. As a result, 

applicants face significant administrative burdens and project completion can 

be delayed. Moreover, GAO found that some agencies do not always meet the 

requirements stipulated in federal statutes and agency regulations concerning 

how they are to determine the eligibility of applicants or projects and how 

they are to prioritize funds. For example, USDA and HUD do not ensure that 

recipients’ use of targeted funds intended for use in the border region 

complies with statutory requirements for establishing project priorities in the 

border region. Finally, the Corps has not established any guidance to ensure 

funds are targeted to those projects with the greatest need. View GAO-10-126 or key components.

For more information, contact Anu K. Mittal at 

(202) 512-9846 or mittala@gao.gov. 
Page i GAO-10-126 

Contents 

Letter 1

Background 3 

Federal Agencies Provided at Least $1.4 Billion over 9 Years for 

Water and Wastewater Infrastructure in the Border Region 11 

Federal Efforts Have Not Been Effective in Meeting the Water and 

Wastewater Needs of the Border Region 17 

Conclusions 30 

Matters for Congressional Consideration 30 

Recommendations for Executive Action 31 

Agency Comments and Our Evaluation 32 

Appendix I Scope and Methodology 36 

Determining How Much Federal Funding was Provided to the 

Border Region 36 

Appendix II Additional Information on Eligibility and 

Prioritization Requirements for USDA, HUD, and 

Corps Programs Targeted to the Border Region 42 

Appendix III Total Obligations and Rural-Urban Categories for 

Water and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 52 

Appendix IV Total USDA Obligations for Water and Wastewater 

Projects in the Border Region, Fiscal Years 

2000-2008, by County 56 

Appendix V Total EPA Obligations and Rural-Urban Categories 

for Water and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 57 

 Rural Water Infrastructure 
Appendix VI Total Obligations from Clean Water and Drinking 

Water State Revolving Funds and Rural-Urban 

Categories for Water and Wastewater Projects in the 

Border Region, Fiscal Years 2000-2008, by County 58 

Appendix VII Total HUD Obligations and Rural-Urban Categories 

for Water and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 61 

Appendix VIII Total Obligations for Water and Wastewater Projects 

in the Border Region, Fiscal Years 2000-2008, by 

Tribal Nation 62 

Appendix IX Comments from the Department of Agriculture 65 

Appendix X Comments from the Department of Housing and 

Urban Development 72 

Appendix XI Comments from the U.S. Army Corps of Engineers 81 

Appendix XII GAO Contact and Staff Acknowledgments 85 

Table 

Table 1: Federal Funds Obligated to the Border Region for Water 

and Wastewater Projects, by Agency and Program, Fiscal 

Years 2000-2008 11 

Page ii GAO-10-126 Rural Water Infrastructure
Figures 

Figure 1: U.S.-Mexico Border Region 4 

Figure 2: Proper and Improper On-site Wastewater Treatment 6 

Figure 3: Federal Funding Obligated from USDA, EPA, HUD, the 

Corps, EDA, and Reclamation for Water and Wastewater 

Projects, Fiscal Years 2000-2008 16 

Figure 4: Federal Funding Obligated from USDA 56 

Figure 5: Federal Funding Obligated from EPA 57 

Figure 6: Federal Funding Obligated from HUD 61 

Abbreviations 

BECC Border Environment Cooperation Commission 

CDBG Community Development Block Grant 

CWTAP Colonias Wastewater Treatment Assistance Program 

CPAP Community Program Application Processing 

EDA Economic Development Administration 

EPA Environmental Protection Agency 

HUD Department of Housing and Urban Development 

IDIS Integrated Disbursement and Information System 

IHS Indian Health Service 

NADB North American Development Bank 

SAAP Special Appropriation Act Projects 

SDS Sanitation Deficiency System 

SFC Sanitation Facilities Construction 

STAG State and Tribal Assistance Grant 

USDA Department of Agriculture 

USGS U.S. Geological Survey 

WRDA Water Resources Development Act 

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Page iii GAO-10-126 Rural Water Infrastructure
Page 1 GAO-10-126 

 

United States Government Accountability Office

Washington, DC 20548 

 

December 18, 2009 

The Honorable Collin C. Peterson 

Chairman 

Committee on Agriculture 

House of Representatives 

Dear Mr. Chairman: 

A serious problem along the U.S.-Mexico border is the lack of access to 

safe drinking water and sanitation systems.1

 U.S. residents who lack safe 

drinking water systems often buy and store water in outdoor tanks or 

barrels for drinking and other domestic uses. This practice represents a 

significant health risk because the water is often transferred or stored in 

open containers and is thereby subject to contamination. In addition, some 

residents rely on substandard septic systems or cesspools to dispose of 

sewage because they do not have access to wastewater treatment systems. 

Leaks from substandard septic systems can contaminate sources of 

drinking water, such as wells, and can also leave sewage on the ground, 

where residents, especially children, may be exposed to bacteria and other 

pathogens. Exposure to contaminated water and wastewater may 

contribute to the increased rate of waterborne diseases in this region. For 

example, according to an EPA report, waterborne diseases such as 

hepatitis A and cholera occur at much higher rates in the Texas border 

region than in other parts of the state. 

Numerous federal programs provide grants, loans, or technical assistance 

to rural communities in the United States, including those in the border 

region, for drinking water and wastewater projects. Seven federal 

agencies—the U.S. Department of Agriculture (USDA), the Environmental 

Protection Agency (EPA), the U.S. Department of Housing and Urban 

Development (HUD), the U.S. Army Corps of Engineers (the Corps), the 

Department of Health and Human Service’s Indian Health Service (IHS), 

the Department of Commerce’s Economic Development Administration 

(EDA), and the Department of the Interior’s Bureau of Reclamation 

(Reclamation)—administer programs that can assist rural communities in 

the border region with acquiring drinking water and wastewater systems. 

1

For the purposes of this report, we identify the border region as the area within 150 miles 

of the U.S.-Mexico border. 

 Rural Water Infrastructure 
 

In addition, four of these seven federal agencies—USDA, EPA, HUD, and 

the Corps—administer programs that are targeted specifically to the 

border region. Agencies provide assistance for a variety of activities, such 

as the planning, design, and construction of treatment facilities; 

installation of distribution lines and pumping stations; and upgrades to 

household plumbing. A combination of assistance from multiple programs 

is used to fund some individual projects. 

In response to your request for information on the status of rural water 

infrastructure along the border region, this report addresses (1) the 

amount of funding federal agencies have provided to rural households and 

communities in the border region for the purposes of obtaining safe 

drinking water and wastewater systems and (2) the effectiveness of 

federal efforts to meet the drinking water and wastewater needs in the 

border region. Our review focused on fiscal years 2000 through 2008. 

To determine the extent of federal funding provided to rural households and 

communities in the border region for drinking water and wastewater projects, 

we collected and analyzed agency data on obligations provided for drinking 

water and wastewater activities from those federal programs that, based on 

our prior work and additional research, were the most likely to provide 

assistance to the region. As stated earlier, these programs are primarily 

administered by USDA, EPA, HUD, the Corps, EDA, IHS, and Reclamation. 

Our review included programs that provide assistance specifically to rural 

areas as well as programs that provide assistance to both rural and urban 

areas. We assessed the reliability of the data we used by reviewing 

information about the underlying database systems, reviewing the data to 

identify outliers and inconsistent or missing values, and discussing the data 

with knowledgeable agency officials. We determined that the data obtained 

from these agencies were sufficiently reliable for the purposes of our review. 

In addition, we electronically mapped the funds provided by the federal 

agencies to identify the geographic distribution of funding. To determine the 

effectiveness of federal efforts to meet the drinking water and wastewater 

needs of the region, we identified and reviewed existing federal assessments 

of drinking water and wastewater conditions; program statutes, regulations, 

policies, and procedures to solicit, accept, and prioritize applications for 

those agencies with programs targeted to the border region (i.e., USDA, HUD, 

EPA, and the Corps); and coordination efforts among these agencies. We also 

interviewed state and local government officials, officials from water and 

wastewater utilities, nonprofit officials from the region, and such private 

sector representatives as urban planners and engineers. In addition, we 

conducted site visits in Texas, New Mexico, and Arizona, in which we 

observed federally funded projects and discussed with state and local officials 

Page 2 GAO-10-126 Rural Water Infrastructure
 

their experiences applying for or receiving assistance from federal agencies. 

Furthermore, we attended two interagency coordination meetings in which 

various federal and state agency officials discussed the status of ongoing 

drinking water and wastewater projects in the border region. A more detailed 

description of our scope and methodology is presented in appendix I. 

We conducted this performance audit from December 2008 to December 

2009 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

The U.S.-Mexico border extends more than 2,000 miles, from the Gulf of 

Mexico to the Pacific Ocean. As can be seen in figure 1, portions of four 

states—Texas, New Mexico, Arizona, and California—encompassing 97 

counties and 44 U.S. federally recognized tribal nations make up the 

border region. 

Background 

Page 3 GAO-10-126 Rural Water Infrastructure
 

Figure 1: U.S.-Mexico Border Region 

The region includes a wide range of community types, from large cities—

such as Los Angeles, California, population 3.8 million—to small, rural 

communities—such as Spofford, Texas, population 75. Of the 44 tribal 

nations in the region, 30 are in California, 8 in Arizona, 1 in New Mexico, 2 

in Texas, and 3 in both California and Arizona. The tribal nations range in 

population from 1 household in the Jamul Indian Village in California to 

Page 4 GAO-10-126 Rural Water Infrastructure
 

3,572 households in the Tohono O’odham tribal nation in Arizona, whose 

tribal land covers an area approximately the size of Connecticut. 

History of Water and 

Wastewater Infrastructure 

in the Border Region 

Throughout the border region, a lack of safe drinking water and adequate 

wastewater treatment has been a continuous problem exacerbated by 

large gains in population associated with rapid industrial growth that has 

occurred over the past three decades. Part of this population increase has 

occurred in communities now commonly referred to as colonias. Initially, 

colonias emerged as developers sold small plots of residential land to 

individuals without providing water or wastewater infrastructure. 

Residents often placed a trailer or similar structure on the land or built 

their homes themselves, many starting with just one room and adding on 

periodically as they were able to afford it. Numerous news articles during 

the 1980s and 1990s described colonias, with one referring to colonias as 

“pockets of poverty” with conditions similar to those generally associated 

with “third-world” conditions.2

 When colonias first began to emerge, they 

were often located in remote areas outside of incorporated cities where 

developers sold land as residential without adhering to the ordinances and 

regulations of the cities; however, more recently many local governments 

have begun to classify entire cities or subdivisions within a city as 

colonias. 

Since water and wastewater infrastructure were lacking when they bought 

their lots and built their homes, many residents in colonias relied on onsite alternatives. For example, to obtain water, some used contaminated 

wells, while others hauled and stored water in barrels or tanks. For 

wastewater disposal, residents used methods such as septic tanks or 

cesspools. Septic systems can treat waste safely, but they can also 

contaminate drinking water with sewage and organic matter if they are not 

installed and maintained properly. Effective septic systems require that the 

type and amount of soil be sufficient to absorb wastewater, and that the 

systems not be located too close to groundwater or surface water. In 

contrast, cesspools can pose a risk of contamination because they do not 

treat wastewater and are merely holes in the ground for the disposal of 

sewage. Problems associated with failing septic systems are not restricted 

to colonias. Rural households throughout the region can experience 

 

2

Peter Applebome, “Along U.S. Border, a Third-World Is Reborn,” New York Times, March 

27, 1988. Ken Flynn, “Lack of Clean Water, Sewers Breed Disease In Border Settlements,” 

Los Angeles Times, March 19, 1989. Brenda Miller, “Senator Sees Colonia Water Woes 

First-hand,” The Monitor, Sept 18, 1994. 

Page 5 GAO-10-126 Rural Water Infrastructure
 

difficulties maintaining proper on-site wastewater treatment. Figure 2 

compares proper septic system function with improper cesspool disposal. 

Figure 2: Proper and Improper On-site Wastewater Treatment 

Soil 

Cesspool

Soil

Septic tank

Drain field

Groundwater

Groundwater

Bedrock

Deep aquifer

Proper septic system process Improper waste disposal process

Shallow well

(hand dug)

Deep well

(bored and

cased)

Source: GAO analysis of EPA data.

In response to public health concerns in the border region caused by a 

lack of clean drinking water and adequate sewage treatment, Congress 

Page 6 GAO-10-126 Rural Water Infrastructure
 

established various programs with dedicated funding.3 For example, in the 

early 1990s, Congress established dedicated funding for water and 

wastewater projects to benefit residents of colonias.4

 These funds have 

been used for a number of projects to provide colonia residents safe 

drinking water and adequate sewage disposal, yet some colonias continue 

to lack these basic services. Appendix II provides additional information 

on the establishment of federal funding to assist colonias. 

Colonias are still found throughout the border region, though their 

characteristics vary widely. Present-day colonias are communities of all 

types and sizes, both incorporated and unincorporated. For example, a 

colonia can be a tribal reservation, a fast-growing retirement community, 

or a high-poverty subdivision. Moreover, not all colonias have the same 

level of need. For example, a town in Arizona that already had water and 

wastewater service was designated a colonia in 2008 because the local 

water utility did not have the funds to address routine repairs, and 

believed that the designation would increase its ability to receive federal 

funds. In contrast, residents of the El Conquistador colonia in Hudspeth 

County, Texas, have lived without access to water and wastewater service 

for over 20 years. 

Agencies That Provide 

Assistance in the Region 

To help communities and households throughout the border region obtain 

safe drinking water and adequate wastewater treatment, seven federal 

agencies provide grants, loans, and technical assistance under separate 

programs and congressional authorizations. These include the following: 

• EPA, which has funding for drinking water and wastewater systems that is 

complementary to its regulatory and enforcement authorities under the 

Safe Drinking Water Act and the Clean Water Act. EPA provides grants for 

water and wastewater infrastructure in the border region through several 

different programs including the 

 

3

In addition to funding dedicated for colonias, the United States and Mexican governments 

established the Border Environment and Cooperation Commission (BECC) and the North 

American Development Bank (NADB) following the 1993 ratification of the North 

American Free Trade Agreement, to help implement a NAFTA provision that recognized 

the need for additional water and wastewater infrastructure in the border region. 

4

Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916 (Nov. 28, 

1990); Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. No. 101-624, § 2327 

(Nov. 28, 1990); Water Resources Development Act of 1992, Pub. L. No. 102-580, § 219 (Oct. 

31, 1992). 

Page 7 GAO-10-126 Rural Water Infrastructure
 

• U.S.-Mexico Border Water Infrastructure Program. EPA’s binational 

program provides grants to water and wastewater facilities within 62 miles 

of the border.5

 EPA allots most of these funds to the Border Environment 

Cooperation Commission (BECC) and the North American Development 

Bank (NADB).6

 These organizations then administer these funds to 

implement project development activities and construction. In addition to 

the funds administered by BECC and NADB, EPA provides grants to tribal 

nations within the border region. 

• Colonias Wastewater Treatment Assistance Program (CWTAP). EPA 

awarded grants to the state of Texas from fiscal years 1993 through 1999 

for the purpose of funding the construction and improvement of water and 

wastewater systems in colonias.7

 The state of Texas obligated this funding, 

along with a state match, to public entities during fiscal years 2000 through 

2008. 

• Drinking Water and Clean Water State Revolving Fund Programs. EPA 

annually provides grants to states to help finance local drinking water and 

wastewater projects nationwide through the Drinking Water and Clean 

Water State Revolving Fund Programs.8

 The states use this funding, along 

with a required 20 percent match, to capitalize their state revolving funds. 

The funds provide low-cost loans or other financial assistance for a wide 

range of water infrastructure projects. In addition, EPA provides funds from 

the Drinking Water and Clean Water Revolving Fund Programs to tribal 

nations throughout the United States for water and wastewater projects. 

• USDA, which provides grants, loans, and technical assistance for rural 

water and wastewater projects through its Water and Environmental 

Program.9

 The department can provide assistance for various activities, 

 

5

According to the La Paz Agreement on cross-border environmental cooperation between 

the United States and Mexico, the U.S.-Mexico border region extends 100 kilometers 

(approximately 62.1 miles) on either side of the border. 

6

BECC and NADB are jointly financed through both the U.S. and Mexican governments. 

7

Congress last appropriated funding for this program in fiscal year 1998; EPA last obligated 

funding in fiscal year 1999. 

8

The Drinking Water State Revolving Fund Program was established to make funds 

available to drinking water systems to finance infrastructure improvements. The Clean 

Water State Revolving Fund Program was established to fund wastewater treatment 

projects. 

9

USDA defines a rural area as a city of 10,000 or fewer residents or any unincorporated 

area. 

Page 8 GAO-10-126 Rural Water Infrastructure
 

such as construction of water treatment and sewage collection facilities, 

connection of single-family homes to water distribution or wastewater 

collection lines, and training for the operation of water and wastewater 

utilities. While the program is available to eligible entities nationwide, 

USDA has been required by annual appropriations acts to set aside a 

portion of this funding—up to $25 million annually—for water and 

wastewater systems that benefit colonia residents (referred to as the 

Section 306C Colonia funds).10

• HUD, which disburses grants to states and local governments through the 

Community Development Block Grant (CDBG) Program to fund housing, 

infrastructure, and other community development activities. The annual 

appropriation for CDBG is split according to HUD formulas so that 70 

percent is allocated among eligible metropolitan cities and counties 

(referred to as entitlement communities) and 30 percent among the states 

to serve cities with populations of fewer than 50,000 and counties with 

populations of fewer than 200,000 (referred to as nonentitlement 

communities). Each border state is required to use up to 10 percent of 

total funds for projects to meet the water, sewage, and housing needs of 

colonia residents (referred to as the Colonia Set-aside).11 According to a 

HUD official, HUD determines each state’s Colonia Set-aside amount 

annually based on input from state officials and other colonia 

stakeholders, such as nonprofit organizations. For fiscal years 2000 

through 2008, HUD established a 10 percent annual set-aside amount for 

Texas, New Mexico, and Arizona and a 5 percent annual set-aside for 

California. Additionally, HUD provides CDBG funds to tribal nations that 

can be used for any eligible CDBG activity, including water or wastewater 

projects. 

• IHS, which constructs water and wastewater projects through its 

Sanitation Facilities Construction (SFC) Program. This assistance is 

available to tribal nations within the United States, and through the 

program, IHS constructs various projects, including distribution and 

collection lines, treatment facilities, and home connections. 

 

10See, e.g., Consolidated Appropriations Act 2008, Pub. L. No. 110–161 (Dec. 26, 2007), 121 

Stat. 1866-67; Agriculture, Rural Development, Food and Drug Administration, and Related 

Agencies Appropriations Act, 2006, Pub. L. No. 109–97 (Nov. 10, 2005) 119 Stat. 2136; 7 

U.S.C. § 1926C (2009). 

11Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916 (Nov. 28, 

1990). 

Page 9 GAO-10-126 Rural Water Infrastructure
 

• EDA, which provides grants to economically distressed areas through its 

Public Works and Economic Development Program.12 The funds are used 

for construction of public facilities, including water and wastewater 

facilities. 

• The Corps, which has provided assistance for water and wastewater 

projects in the border region as directed by Congress. Congress has 

authorized and appropriated funds for the Corps to provide assistance for 

a number of projects, including projects to benefit colonias in need of 

water or wastewater infrastructure. 

• Reclamation, which has been directed to provide assistance for drinking 

water or wastewater treatment projects in response to individual project 

authorizations but does not have an established program for such 

assistance. However, in 2006, Congress passed the Rural Water Supply Act, 

directing Reclamation to develop a rural water supply program. 

Entities that can seek assistance from most of these federal agencies 

include local units of government, tribal nations, water or wastewater 

utilities or similar entities, nonprofit organizations, or individual 

homeowners. Each federal program has its own application process but 

generally involves the following steps: 

• Pre-application meeting. Federal agencies generally require the entity 

seeking assistance to meet with agency officials prior to submitting an 

application. During this meeting, officials and the potential applicant 

discuss program eligibility, the type of assistance needed, and application 

requirements. 

• Submission of application. After the pre-application discussion, the entity 

seeking assistance prepares an application that can include information 

such as financial, engineering, and environmental studies that describe the 

project plan and its costs. Some agencies require additional 

documentation, such as evidence of public support for the project and 

documentation that the entity cannot obtain commercial credit at a 

reasonable rate. 

 

12EDA defines an area as economically distressed if it meets one of the following three 

conditions: (1) an unemployment rate that is at least 1 percent greater than the national 

average, (2) a per capita income that is 80 percent of the national average or less, or (3) the 

area has experienced or is about to experience a special need arising from sudden and 

severe changes in economic conditions. 

Page 10 GAO-10-126 Rural Water Infrastructure
 

• Review and evaluation of application. Once an agency receives an 

application, officials review it for eligibility. After the agency determines 

that an application meets program eligibility requirements, it may be 

further evaluated, depending on whether the assistance being requested is 

from a competitive or a noncompetitive program. For competitive 

programs, agencies generally score each application according to 

established criteria and then rank the applications so that the projects 

with the highest scores will receive priority for available funds. For 

noncompetitive programs, agencies will generally obligate funding as 

applications are deemed eligible until all available funds are depleted. 

We found that seven federal agencies obligated at least $1.4 billion for 

drinking water and wastewater projects in the U.S.-Mexico border region 

from fiscal years 2000 through 2008. USDA and EPA obligated 78 percent, 

or about $1.1 billion, of the total $1.4 billion. The remaining 22 percent, or 

$309 million, came from HUD, the Corps, IHS, EDA, and Reclamation. 

Table 1 provides additional data regarding federal funds obligated to the 

border region for water and wastewater projects by agency and program. 

Table 1: Federal Funds Obligated to the Border Region for Water and Wastewater 

Projects, by Agency and Program, Fiscal Years 2000-2008 

Federal Agencies 

Provided at Least $1.4 

Billion over 9 Years 

for Water and 

Wastewater 

Infrastructure in the 

Border Region 

Agency/ program Grants Loans

EPA 

U.S.-Mexico Border Water Infrastructure Program 

Colonias Wastewater Treatment Assistance 

Program 

Congressionally directed funds 

Indian Clean Water and Tribal Drinking Water 

Revolving Fund Programs 

$298 million

173 million

61 million

36 million 

EPA total 568 million

USDA 

Water and Environmental Program 

Section 306C Colonia Funds 

92 million

208 million

$209 million

USDA total 300 million 209 million

HUD 

CDBG Programs 

Congressionally directed funds 

217 million

925,000

HUD total 218 million

IHS 

Sanitation Facilities Construction Program 45 million

Page 11 GAO-10-126 Rural Water Infrastructure
 

Agency/ program Grants Loans

EDA 

Public Works and Economic Development Program 39 million

Corps 4 million

Reclamation 4 million

Total federal funding $1.2 billion $209 million

Source: GAO analysis of USDA, EPA, HUD, IHS, EDA, Corps, and Reclamation data. 

Notes: Individual program totals may not add to agency totals because of rounding. 

In addition to the funding reported in the table, EPA’s U.S.-Mexico Border Water Infrastructure 

Program obligated funds to support projects in Mexico. 

The $4 million in Corps assistance reported was obligated through technical assistance. 

Details about the funding provided by each of the seven federal agencies 

to the border region from fiscal year 2000 through 2008 include the 

following: 

• EPA obligated at least $568 million in grants, or 41 percent of the total 

federal funding provided to the region.13 Of that, about $471 million was 

obligated through programs targeted to the border region, while just over 

$98 million was obligated through nationwide programs. Of the $471 

million targeted to the border region, EPA obligated $298 million in grant 

funds through the U.S.-Mexico Border Water Infrastructure Program, and 

$173 million in grant funds through the Colonias Wastewater Treatment 

Assistance Program.14 Of the $98 million from nationwide programs, $61 

million was congressionally directed in EPA’s State and Tribal Assistance 

Grant (STAG) account appropriations, according to data provided by EPA. 

The remaining nationwide program funds were obligated to tribal nations 

through the Drinking Water and Clean Water Revolving Fund Programs 

(about $36 million). Appendix V provides additional data on the 

 

13EPA obligations have benefited both urban and rural communities. 

14A 2008 EPA Inspector General report found that nearly 10 years after EPA Region 6 

awarded the last CWTAP grant to the Texas Water Development Board, funding remained 

unspent. The report further states that if Region 6 does not improve its oversight of the 

program, the funds will probably not be fully spent by the current CWTAP grant fund 

drawdown projection of 2010. However, the report acknowledges that EPA has taken some 

positive steps to address unliquidated obligations in the CWTAP, such as working with the 

board to establish a schedule for using the remaining funds. EPA, Millions of Federal 

Dollars Remain for Colonias Projects, 08-P-0184 (Washington, D.C.: 2008). EPA obligated 

the $173 million in Colonias Wastewater Treatment Assistance Program funding prior to 

fiscal year 2000. However, although EPA obligated these funds to the Texas Water 

Development Board prior to fiscal year 2000, the Texas Water Development Board 

continued to obligate the funds to local communities and other entities from fiscal year 

2000 through fiscal year 2008. 

Page 12 GAO-10-126 Rural Water Infrastructure
 

obligations from EPA in the border region. In addition, state-administered 

revolving loan funds partially capitalized by EPA provided approximately 

$3.4 billion in loan financing to water and wastewater projects in the 

border region through the Clean Water and Drinking Water State 

Revolving Fund Programs from fiscal years 2000 through 2008.15 For 

example, the California Department of Health obligated about $1.7 million 

for repairs to the drinking water distribution system in Imperial County, 

California. Appendix VI provides additional data on the obligations from 

the Drinking Water and Clean Water State Revolving Fund programs in the 

border region. 

• USDA obligated about $509 million, or about 37 percent of the total federal 

funding.16 Of the $509 million, it obligated $208 million in grant funds 

through its Section 306C Colonia funds. The remaining $302 million—$209 

million in loan funds and $93 million in grant funds—was obligated 

through its nationwide Water and Environmental Program. Of the $509 

million total, USDA obligated about $502 million (98 percent) to public 

utilities or similar entities for construction or improvements to water and 

wastewater infrastructure. For example, USDA obligated $2.9 million in 

grants and almost $1 million in loans to the city of Truth or Consequences, 

New Mexico, for improvements to the wastewater treatment plant and 

extension of collection lines. It obligated over $7 million to individuals in 

the border region for household projects, such as installing indoor 

plumbing. Appendix IV provides additional data on the obligations from 

USDA funds in the border region. 

• HUD obligated about $218 million, or 16 percent of the total federal 

funding provided to the region.17 Almost all of the funds, $217 million, 

were obligated as grant funds through the Community Development B

Grant Programs. The remainder, $925,000, was obligated from HUD’s 

Economic Development Initiative Special Project account, according to 

lock 

 

15We do not report this sum as part of our total for federal funding to the border region 

because these funds are loans from a nonfederal fund and thus do not represent the same 

kind of outlays as direct federal funding. 

16USDA also provides grants from the Technical Assistance and Training Grant Program to 

national nonprofit organizations, such as the National Rural Water Association and the 

Rural Community Assistance Program, which may have provided technical assistance to 

entities in the border region. 

17In addition, HUD provides funds for a variety of planning activities, some of which are 

used for water and wastewater projects. However, because of data limitations we could not 

accurately determine whether a planning activity was related to water or wastewater 

projects. These activities are not included in the totals presented in the report. 

Page 13 GAO-10-126 Rural Water Infrastructure
 

officials. Of the $217 million in CDBG grants, $51 million of this was 

identified by states in HUD’s database as obligated for water or 

wastewater projects in a colonia.18 For example, New Mexico obligated 

about $265,000 to extend water distribution lines to 20 residents of a 

colonia in Sierra County. Additional funds from the Colonia Set-aside 

Program may have been used in colonias for water and wastewater 

projects, but we were unable to determine the total amount because HUD 

does not comprehensively distinguish in its data system which of the 

CDBG obligated funds are under the Colonia Set-aside. Of the $217 million 

in CDBG grants, HUD obligated $2.6 million through its Indian CDBG 

program to two tribal nations—the Salt River Pima-Maricopa Indian 

Community and the San Pasqual Band of Mission Indians. Appendix VII 

provides additional data on the obligations from HUD in the border region. 

• IHS obligated about $45 million for the construction of sanitation facilities 

on tribal nations in the border region. For example, IHS obligated about $8 

million to provide basic sanitation services to residents of the Tohono 

O’odham tribal nation by participating in a modular bathroom program.19

Through this effort, residents living in traditional adobe structures that 

lack indoor plumbing are able to attach a modular bathroom to the home 

and then connect to a wastewater distribution line. Appendix VIII provides 

additional data on federal obligations made to each tribal nation in the 

border region. 

• EDA obligated about $39 million in grant funds for public infrastructure 

projects that included water or wastewater activities. These funds were 

obligated for 29 projects. For example, EDA obligated $3.2 million in grant 

funds for a water system project in San Bernardino, California. This 

project included land acquisition for new water wells, well drilling, new 

 

18HUD officials reported that $118.8 million was to the Colonia Set-aside Program from 

fiscal years 2000 through 2008. The agency currently does not require states to distinguish 

these funds when reporting on CDBG fund uses in HUD’s data system. States currently 

have the option to identify if a project occurred in a colonia by using a check box in HUD’s 

data system, but HUD acknowledges that states have not been consistent about using this 

check box. HUD officials reported that the agency intends to issue guidance in the future to 

remind states of the importance of using the check box and have requested the agency 

include a new data field specifically to identify states’ use of Colonia Set-aside funds. HUD 

reports that once this change to the data system is made, it will be able to identify all 

projects funded with the set-aside, and could then verify that all such projects are located 

in a colonia.. 

19Along with the cost for the modular bathrooms, this total also includes improvements to 

the water and wastewater systems that serve them. 

Page 14 GAO-10-126 Rural Water Infrastructure
 

pipeline, a booster pump, obtaining water rights, an engineering and 

environmental assessment, and removal of an elevated water tank. 

• The Corps obligated just over $4 million in assistance to projects within 

the border region. The assistance was used for 6 congressionally directed 

projects in New Mexico, and 3 projects to assist colonias in Texas 

conducted under the Water Resources Development Act of 1992, which 

authorized the Corps to assist communities with water and wastewater 

needs.20

• Reclamation obligated almost $4 million in grant funds for 5 water supply 

projects, for which Congress specifically authorized and appropriated 

funds, according to agency documents. Reclamation currently funds 

projects only in response to specific congressional directives, but it was 

authorized in 2006 by the Rural Water Supply Act to establish a rural water 

supply program.21 We reported in 2007 that Reclamation planned to 

develop programmatic criteria to determine eligibility for participation in 

this program and to assess the status of authorized rural water supply 

projects and other federal programs that address rural water supply 

issues, as the act required, by December 2008.22 As of September 2009, 

agency officials told us that the establishment of the program is still a 

priority, but it has been delayed by the change of Administration and by 

efforts to develop a strategy for implementation of the American Recovery 

and Reinvestment Act funds.23 Agency officials stated they hope to have 

the program established by the end of calendar year 2009. 

Of the 97 counties in the border region, 94 received some assistance, and 3 

received no assistance during fiscal years 2000 through 2008. Figure 3 

shows the amounts provided to the 94 counties that received some 

assistance, which ranged from a low of just under $260,000 provided to 

Reagan County, Texas, and to a high of almost $130 million provided to 

Cameron County, Texas. 

 

20Water Resources Development Act of 1992, Pub. L. No. 102-580, § 219 (1992). 

21Rural Water Supply Act of 2006, Pub. L. No. 109-451 § 103 (2006). 

22GAO, Water Resources: Four Federal Agencies Provide Funding for Rural Water Supply 

and Wastewater Projects, GAO-07-1094, (Washington, D.C.: Sept. 7, 2007). 

23American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, p. 23 (2009). 

Page 15 GAO-10-126 Rural Water Infrastructure
 

Figure 3: Federal Funding Obligated from USDA, EPA, HUD, the Corps, EDA, and Reclamation for Water and Wastewater 

Projects, Fiscal Years 2000-2008 

Note: Because tribal nations do not conform to county boundaries, IHS obligations are not included in 

figure 3. 

Appendix III provides further data on each county, including its ruralurban classification and the funding obligated by federal agencies. 

Page 16 GAO-10-126 Rural Water Infrastructure
 

Rural Water Infrastructure

Federal efforts have not effectively addressed the drinking water and 

d 

ver the years, some federal agencies have conducted assessments to 

e of 

the 

• EPA commissioned a study to set a baseline, as of December 2003, for its 

 the 

s 

In addition, EPA has reviewed applications received from both the U.S. 

projects 

 us 

e 

Further, EPA conducts the nationwide Clean Watersheds Needs Survey 

Federal Efforts Have wastewater needs in the border region because agencies (1) have not 

comprehensively assessed the needs of the region, (2) lack coordinate

policies and processes, and (3) in some cases have not complied with 

statutory requirements and agency regulations. 

Not Been Effective in 

Meeting the Water and

Wastewater Needs of 

the Border Region 

Agencies Have Not 

sessed 

O

identify water and wastewater conditions in the border region, but non

these assessments either individually or collectively provides a 

comprehensive picture of the needs of the region. We identified 

following assessments that either have been conducted by federal 

agencies or are ongoing: 

Comprehensively As

Water and Wastewater 

Conditions, Hampering 

Their Ability to Meet the

Needs of the Region 

U.S.-Mexico Border Water Infrastructure Program by estimating the 

number of households without basic water and wastewater service in

area served by the program. While the data collection effort was used by 

the agency to establish performance measures and strategic goals, the 

agency did not establish a process to update the data to reflect current 

conditions. Without such a process, the accuracy and usefulness of the 

data are limited. In addition, the study did not distinguish between home

with appropriate septic systems and homes without them. 

and Mexico sides of the border through its U.S.-Mexico Border Water 

Infrastructure Program in 2004, 2006, and 2008 to determine the total 

amount of funding requested from the border region. The requests for 

assistance ranged from $590 million to over $1 billion in project 

construction costs. During the most recent solicitation, over 130 

on the U.S. side of the border requested assistance representing $800 

million in total project cost, according to EPA officials. While EPA told

this effort provides the agency with a snapshot that reflects the existing 

needs in the region, it acknowledges this snapshot is not a comprehensiv

assessment of need in the region and captures only the need from those 

entities that seek assistance from the U.S.-Mexico Border Water 

Infrastructure Program. 

every 4 years to identify the funds needed to address problems with 

wastewater treatment facilities. Similarly, the agency conducts an 

Page 17 GAO-10-126 
 

assessment every 4 years to identify the funds needed for existing d

water facilities to comply with safe drinking water quality standards. 

However, on the basis of information provided by agency officials, we

not believe that either of these efforts provides the agency with a 

comprehensive assessment of the border region. For example, acc

to officials, these assessments have not traditionally been successful in 

collecting data from small communities. Officials told us that the 2004 

Clean Watersheds Needs Survey had a 36 percent response rate from 

wastewater systems that serve small communities (those with fewer th

10,000 wastewater customers). In addition, officials told us the 2007 

drinking water assessment includes data for all existing utilities servi

over 100,000 customers, but only a sample of small community systems 

are included in the assessment—600 of the approximately 33,000 such 

systems nationwide. Because many of the communities in the border 

region are small, we do not believe that they would be captured by the

survey. 

rinking 

 do 

ording 

an 

ng 

• In 2008, USDA, reported on the amount of funds directed to colonias in 

n 

, but 

e, 

d. 

• HUD has provided funds for local governments to identify colonias and the 

 

each of the four border states and the amount of unfunded applications 

the agency received for the program in fiscal year 2008. This report was i

response to a request from the Senate Agriculture Committee to, among 

other things, provide a report that “identifies where additional resources 

are most needed.”24 According to our review of USDA’s report, the 

department did not identify where additional resources are needed

simply reported its backlog of applications from each state.25 For exampl

the report stated that the department had a pre-application and application 

backlog of approximately $117 million—with pre-applications accounting 

for $108 million and applications accounting for $9 million. As with EPA’s 

assessment of applications submitted to the U.S.-Mexico Border Water 

Infrastructure Program, these figures represent only those entities that 

have contacted USDA for assistance, and therefore do not provide a 

complete assessment of those areas where resources are most neede

water and wastewater conditions within them. From 1992 through 2008, 

HUD-funded assessments were completed for 43 of the 67 Texas counties

24Senate Report 110-134, Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies Appropriations Bill, 2008. 

25USDA, Report on Water and Waste Programs—Resources Provided and Needs of the 

Native Americans, Including Alaskan Natives and the Colonias Populations (November 

2008). 

Page 18 GAO-10-126 Rural Water Infrastructure
 

in the border region. For example, a 2008 assessment for Dimmitt County, 

Texas, found that 113 housing units lacked centralized water service. 

However, as some assessments were conducted more than a decade a

or longer, they may not reflect current conditions. HUD also provided 

funds to the U.S. Geological Survey (USGS) to collect data on 

infrastructure in colonias for 6 counties in Texas. The dataset, 

2007, includes information such as number of households, source of 

potable water, and whether wastewater collection is available. 

go 

released in 

• Since 1989, IHS has collected data on the water and wastewater 

 States. 

rder 

• In 2007, BECC began efforts to identify the water and wastewater 

xico 

 to 

or 

Without a comprehensive assessment of the needs of the region and the 

eral 

and 

 

infrastructure conditions for each tribal reservation in the United

This information is available through its Sanitation Deficiency System and

is updated annually. As a result, IHS can select projects that target the 

greatest need and report on effectiveness to meet the water and 

wastewater needs of tribal nations, including those within the bo

region. 

infrastructure needs within the 62-mile region north of the U.S.-Me

border. The study is expected to compare the number of existing water 

and wastewater connections with the total number of homes and is 

expected to identify gaps in access to centralized services. According

BECC officials, data collection and analysis were completed for New 

Mexico in the first quarter of 2009 and are currently being conducted f

Texas, California, and Arizona. BECC expects to complete all data 

collection and analysis and issue the study by the end of 2010. 

existing condition of water and wastewater systems, federal agencies are

hampered in their ability to identify and provide assistance to those 

communities with the greatest need. Instead, we found that most fed

programs generally provide funds to those communities with the ability to

initiate projects and seek assistance, which may not be the ones with the 

greatest need. According to several state and local officials, it is often the 

communities in the border region that do not have the institutional 

capacity to identify solutions or apply for funding that are in need of

assistance. For example, rural communities, such as unincorporated 

colonias, may not be aware of potential solutions for obtaining water 

wastewater services or how to start the process to seek these services.26

26When we shared this concern with the agencies, EPA officials told us that Clean Water 

Act regulations limit the agency’s ability to provide assistance to unincorporated 

communities without the establishment of a utility or improvement district. 

Page 19 GAO-10-126 Rural Water Infrastructure
 

Rural communities may also lack the financial resources to hire a 

consultant who can help them design a project and prepare the app

materials, including the preliminary engineering and environmental 

documents. According to several officials that we spoke to, engineer

and environmental reports can cost from $30,000 to $100,000. A prior 

federal study has identified this high initial cost as a major obstacle to

providing federal assistance for water and wastewater service in the 

region.

lication 

ing 

for 

ing 

Although few federal agencies have made efforts to build institutional 

e 

ties. 

• serving as liaisons among colonia residents, federal and state agencies, 

• facilitating effective communication among colonia stakeholder groups to 

• mediating among interested groups to resolve situations that prevent the 

provision of water and wastewater service; 

• serving as conduits for information by conducting community outreach 

and facilitating community meetings with colonia residents; and 

 

27 While federal assistance to help offset this high initial cost is

available through some programs, such as EPA’s U.S.-Mexico Border 

Water Infrastructure Program, the overall federal assistance provided 

such activities is minimal—from fiscal years 2000 through 2008, the 

program provided funds to 62 projects in the border region represent

about $15 million in grant funds.28

capacity in border communities, we did find some efforts by state 

programs and nonprofits. For example, the Texas Colonias Initiativ

Program has colonia ombudsmen who assist communities with basic 

infrastructure needs. In 1999, the state of Texas established a Colonias

Initiative Program to advance efforts to connect colonia residents’ homes 

to water and wastewater services. The program’s ombudsmen work in 

counties in the border region with the highest colonia populations—

Hidalgo, El Paso, Starr, Webb, Cameron, Nueces, and Maverick Coun

The role of the ombudsmen includes the following: 

local governments, and utility companies; 

improve living conditions for colonia residents; 

27EPA, How Investment in Water, Wastewater, and Irrigation Infrastructure Has Affected 

the Mexico-Texas Border, EPA-X4-976742-01, Prepared by the University of Texas at 

Austin (Austin, Tex.: 2007). 

28In addition, BECC provides some assistance for these activities through nonfederal funds. 

Page 20 GAO-10-126 Rural Water Infrastructure
 

• monitoring the different phases of projects to ensure progress and project

completion. 

ovided 

valuable information on colonia conditions to state and federal agencies. 

The federal agencies that provide most of the funding for water and 

—have 

and inefficient use of resources. However, the agencies have long 

, 

mall 

de ago, 

ses, 

or 

 depend on 

assistance from more than one agency, these separate and differing 

er 

g to 

 

State and local officials told us that the ombudsmen had helped 

communities overcome obstacles to obtaining service and had pr

wastewater projects in the border region—EPA, USDA, and HUD

not developed comprehensive coordinated policies and procedures, 

resulting in administrative burdens for applicants, duplication of efforts, 

recognized the need for improved coordination, and in 1997 these agencies 

issued a joint memorandum to encourage cooperation among federal

state, and local funding agencies. The memorandum states that the 

agencies will foster coordination efforts by establishing a uniform 

application, standardizing requirements, coordinating funding cycles, and

collaborating in project selection to improve program delivery to s

and rural communities, including those in the border region.29

Despite the fact that this joint memorandum was issued over a deca

we found that most programs still have different application proces

different requirements for engineering and environmental reports, 

different deadlines for submitting applications, and different processes f

selecting projects.30 Since water and wastewater projects often

requirements can increase the burden on applicants and delay project 

completion, according to officials we spoke to.31 For example, an engine

in Texas representing a public utility told us that one applicant tryin

expand water service to colonia residents had to pay $30,000 more in fees 

 

USDA-Rural Utility Service, Department of Housing and Urban Development, and U.S. 

Environmental Protection Agency, Joint Memorandum: Cooperation and Coordination 

on Jointly Financed Water and Wastewater Activities (Washington, D.C.: 1997). 

30For projects that receive technical assistance from EPA’s U.S.-Mexico Border Water 

EPA and USDA officials commented that the numerous instances of jointly funded 

ly 

 completion. 

Agencies Lack 

Coordinated Policies and 

Processes for Providing 

Federal Assistance in the 

Border Region 

29

Infrastructure Program, the agency will tailor engineering and environmental reports to 

meet the standards of the primary funding agency. 

31

projects show that agencies are coordinating. We do not disagree that projects often re

on multiple sources of funding, but we found that the lack of coordinated policies placed

additional burden on applicants and delayed project

Page 21 GAO-10-126 Rural Water Infrastructure
 

because the engineer had to complete two separate sets of engineering 

documentation for EPA and USDA. The applicant could have saved these

funds had EPA and USDA established uniform engineering requirements. 

In addition, because most federal programs have no process by which to

coordinate and share information on projects they have selected for 

funding, we found examples where agencies made inefficient use of 

limited resources.

he 

e 

t 

ing 

he 

e 

. 

id not 

representative of the utility told us that the utility did meet with USDA 

officials and it was discouraged from submitting an application. 

 

32 For example, we found a case where EPA and USDA 

both provided funds to design wastewater projects that would serve t

same communities in Hidalgo County, Texas. EPA provided funds to 

design the project as an expansion of service from an existing utility, whil

USDA provided funds to design the project as a new wastewater treatmen

facility. The community elected to build the new facility, thus eliminat

the need for the EPA design work and resulting in a waste of those federal 

funds. In another example, HUD provided a utility in Hudspeth County, 

Texas, over $860,000 in grant funds from 2004 to 2006 to extend water 

distribution and waste collection lines for residents of a colonia. However, 

as of September 2009, the distribution lines remain unused because the 

utility does not have enough water to serve the additional households. T

utility intended to use funding from USDA to construct a new well, but the 

funding obligated by the agency was not enough to cover project costs.33

The utility has been unable to obtain the additional assistance from federal 

agencies, and no additional water supply has been acquired in the 3 years 

after the HUD funds were provided to construct the distribution lines, 

resulting in a $900,000 investment of federal funds in distribution lines that 

are not usable. We received conflicting reports about this project from 

USDA and utility officials. Specifically, a USDA official in the state offic

told us that the agency could provide loan funds only to complete the 

project and that the agency advised the utility against applying for 

assistance because the utility could not handle any additional loan burden

In contrast, USDA headquarters officials told us that the agency orally 

offered a loan to the utility to complete the project, but the utility d

submit an application to officially request the assistance, and a 

32EPA’s U.S.-Mexico Border Water Infrastructure Program recently adopted a process to 

coordinate with federal agencies that are providing funding for a project the program may 

fund. 

33The funding obligated by the agency was initially intended to cover full project costs, but 

because of cost increases caused by various reasons the funding was insufficient. 

Page 22 GAO-10-126 Rural Water Infrastructure
 

In contrast, federal and tribal officials told us that the collaborative 

relationship between EPA’s tribal programs and IHS is a model that has 

been beneficial for tribal nations. The agencies have created a pr

coordinate project selection and development in which EPA uses data o

the needs of tribal nations from IHS to select projects. According

ocess to 

n 

 to EPA 

data, IHS administers almost all jointly funded projects, and as a result 

amples of 

coordination within the states: 

•

s of 

• California organizes “funding fairs,” where several state and federal 

ide 

federal agencies that conduct meetings throughout the state. According to 

o 

ong 

e and submit to one state office 

through a Web-based portal that then disseminates the application to 

federal officials meets biweekly to review the applications and identify the 

 

applicants need to deal with only one federal point of contact. 

Furthermore, we found examples of states in the border region that have 

made efforts to better coordinate funding for water and wastewater 

projects among federal, state, and local agencies and thereby make the 

application process easier, maximize the use of funds, and reduce 

complications during project development. The following are ex

Texas has developed a coordination group for the state and federal 

agencies that provide funding to colonias, and for representatives from 

regulatory agencies. This group meets quarterly to discuss the statu

ongoing projects in colonias and any impediments to their completion. 

agencies come together in communities throughout the state to prov

information on potential assistance that may be available. 

• Arizona has developed a committee that consists of several state and 

state officials, these meetings provide communities the opportunity t

discuss their needs with the officials and to determine which funding 

agency could best meet their needs. 

• New Mexico, through executive orders, established an initiative to, am

other things, increase collaboration among state agencies that fund water 

infrastructure.34 As a result of the initiative, the state developed a single

application process for entities seeking assistance with water and 

wastewater infrastructure to complet

numerous other state and federal agencies for review. The state has also 

developed a single set of engineering requirements that state and some 

federal agencies agreed to accept. In addition, a workgroup of state and 

34State of New Mexico, Office of the Governor, Executive Orders 2005-031 and 2007-050. 

Page 23 GAO-10-126 Rural Water Infrastructure
 

combination of programs that would best meet the needs of individ

applicants. Federal participation includes the New Mexico USDA Rura

Development office, and state participation includes the New Mexico s

agencies administering the HUD CDBG Program and the Clean Water and

Drinking Water State Revolving Fund Programs. 

Our past work on issues that cut across multiple agencies, such as rural 

water infrastructure, has shown that agencies face numerous challenges

their efforts to improve coordination.

ual 

l 

tate 

 in 

e funds and limit the 

overall effectiveness of the federal effort. In order to overcome significant 

nefits 

•

•

•

 resources; and 

luate, and report on results. 36

 

35 For example, we have found that

agency missions may not be mutually reinforcing or procedures and 

processes may be incompatible. However, we found that without a 

coordinated approach, programs can waste scarc

differences in agency missions, cultures, and established ways of doing 

business, collaborating agencies must have a clear and compelling 

rationale to work together. The compelling rationale for agencies to 

collaborate can be imposed externally through legislation or other 

directives or can come from the agencies’ own perceptions of the be

they can obtain from working together. In either case, among the key 

practices that can help agencies enhance and sustain their collaborative 

efforts, include the following: 

defining and articulating a common outcome; 

agreeing on roles and responsibilities; 

establishing compatible policies, procedures, and other means to operate

across agency boundaries; 

• identifying and addressing needs by leveraging

• developing mechanisms to monitor, eva

35GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005), and 

Managing for Results: Barriers to Interagency Coordination, GAO/GGD-00-106 

GAO-06-15

(Washington, D.C.: Mar. 29, 2000). 

36 . 

Page 24 GAO-10-126 Rural Water Infrastructure
 

Rural Water Infrastructure

We found that USDA, HUD, and the Corps have not always ensured 

compliance with statutory requirements and regulations concerning the 

ligibility of applicants or projects or the prioritization of funds from 

HUD and the Corps are not ensuring compliance with eligibility 

equirements set by Congress when they distribute federal assistance. 

Specifically, we found the following: 

• a, 

ke available, “for activities designed 

to meet the needs of the residents of colonias in the State relating to 

 the 

using. 

at 

s a colonia, has not made such determinations, and has not 

reviewed states’ determinations. Lacking guidance and direction from 

ies 

e 

act. 

HUD officials said that the CDBG Program relies on states to make 

decisions that make the most sense for the particular state, and officials 

 

e

programs targeted at the border region. 

r

HUD. Under the Cranston-Gonzalez Act, the states of Arizona, Californi

New Mexico, and Texas shall each ma

water, sewage, and housing,” a specified percentage of CDBG funds they 

receive.37 Under the act, the term “colonia” means any identifiable 

community that, among other things, is determined to be a colonia on

basis of objective criteria, including lack of potable water supply; lack of 

adequate sewage systems; and lack of decent, safe, and sanitary ho

In short, the act requires grants to be made for projects meeting the needs 

of colonias residents, which must be related to water, sewage, and 

housing. 

We found that HUD has not developed guidance for determining wh

constitute

HUD, states have applied the requirement differently. For example, in 

California and New Mexico most colonias are designated as communit

with substandard housing and a lack of either potable water or adequat

sewage systems. In Arizona, designations use any one of the three 

statutory criteria. In Texas, designations are made for areas with 

substandard housing that lack either adequate water or wastewater 

treatment, and which are unincorporated, criteria not found in the 

Agencies Have Not A

Ensured Compliance with 

lways 

Statutory Requirements in 

Implementing Programs 

for the Border Region 

Agencies Are Not Ensuring 

Compliance with Statutory

Eligibility Requirements 

37Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916 (Nov. 28, 

1990). The act originally required the set-aside only for fiscal years 1991 to 1994. 

Appropriations acts made the set-aside mandatory in fiscal year 1996 and then permanently 

required beginning in fiscal year 1997. Omnibus Consolidated Rescissions and 

Appropriations Act of 1996, Pub. L. 104-134, 110 Stat 1321-272 (Apr. 26, 1996); Departments 

of Veterans Affairs and Housing and Urban Development, and Independent Agencies 

Appropriations Act, 1997 Pub. L. 104-204, 110 Stat 2874, 2887 (Sept. 26, 1996). 

Page 25 GAO-10-126 
 

do not agree that varying interpretations by states suggest that the

guidance is problematic. However, officials stated that in the future, 

will issue guidance that reportedly will include information on the 

documentation needed by states to support that a colonia meets stat

requirements. 

HUD officials also told us that the agency interprets the statute as 

authorizing colonia funds to be spent on any currently eligible CDB

activity. However, the statute expressly limits the Colonia Set-aside to 

activities relati

 lack of 

HUD 

utory 

G 

ng to water, sewage, and housing. As the agency has not 

limited state use of the funds, grants have been obligated for numerous 

t-aside 

as 

•

ited States-Mexico border.38 Although the act does not 

define colonias, the legislative history for the program shows that colonias 

of 

d 

ject 

s 

orps 

s 

 

activities. Arizona obligated only about 32 percent of the Colonia Se

funds for water, wastewater, or housing activities, and the remainder w

used for other activities not consistent with the limitations in the act, 

including about $560,000 for a neighborhood job center and almost 

$180,000 for a garbage collection vehicle. HUD officials did not say 

whether the guidance the agency intends to issue in the future will discuss 

eligible activities. 

Corps. The Water Resources Development Act of 1992, as amended, 

authorizes the Corps to provide assistance for wastewater treatment 

facilities, water systems, and related structures for colonias in the United 

States along the Un

were considered to be rural settlements in the border region that lack

adequate basic water and sewer facilities, specifically stating that most 

these communities rely on outhouses or substandard septic tanks. We foun

that the Corps has not defined “colonia” for the purposes of the act, or 

developed any guidance for use of these funds. The Corps recognizes that 

unlike other Section 219 projects, which have specifically identified pro

locations (e.g., congressionally directed), the colonias Section 219 project i

essentially a programmatic authority. Nonetheless, Corps officials stated the 

program was too small for the agency to develop guidance. While the C

states that it independently verifies that the assistance it provides under thi

provision is going to colonias, Corps officials acknowledged that the agency 

does not have criteria for identifying eligible colonias, and it is unclear by 

what basis the Corps has verified the communities are colonias as meant in 

38Pub.L. No. 102-580, § 219 (Oct. 31, 1992); Water Resources Development Act of 2007, Pub. 

L. No. 110-114 § 5006(a) (Nov. 8, 2007). 

Page 26 GAO-10-126 Rural Water Infrastructure
 

the authorizing statute.39 As a result, the Corps cannot ensure that its 

assistance is going to colonias. 

Appendix II provides additional information on the establishment of

federal funding to assist colonias and GAO’s analysis of legal requirements 

related to eligibility and project priorities. 

 for establishing project 

priorities in the border region. Further, the Corps has not established any 

•

e for water supply and waste 

facilities and services to communities whose residents face significant 

that 

, 

s” to these 

colonias are given preference. Instead, USDA told us it views an entity 

ment 

e 

 

USDA and HUD do not ensure that funds intended for use in the border 

region comply with statutory requirements

Agencies Do Not Ensure Funds 

Intended for Use in the Border 

Region Are Provided to Those 

guidance to ensure funds are targeted to those projects with the greatest

need. Specifically, we found the following: 

USDA. The Consolidated Farm and Rural Development Act, as amended, 

directs USDA to provide financial assistanc

with the Greatest Need 

health risks, because the community’s residents do not have access to 

such facilities. The act states that USDA must give preference to entities 

“that propose to provide water supply or waste disposal services to the 

residents of those rural subdivisions commonly referred to as colonias 

are characterized by substandard housing, inadequate roads and drainage

and a lack of adequate water or waste facilities.”40 Thus, the provision 

requires USDA to give preference to water and waste projects in colonias 

where other infrastructure and housing are also inadequate. 

We found that USDA has no process in place to ensure that entities 

“propos[ing] to provide water supply or waste disposal service

proposing to assist any community the relevant state or local govern

has designated as a colonia as qualifying for the preference.41 USDA does 

not attempt to independently verify whether these entities meet the 

threshold eligibility requirement (proposing to serve communities in which

most residents lack access to adequate water or waste facilities), or that th

39Moreover, the Corps’ field personnel initially told us that they rely on a state agency to 

determine which projects should receive assistance. While the Corps asserted it has 

flexibility in determining whether a community is an eligible colonia, it cannot reasonably 

make a determination without any criteria at all. 

40Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. No. 101-624 § 2327, Nov. 

28, 1990. 

41In addition, USDA said it awards funds to them on a first-come, first-served basis and 

there is no need for ranking and comparing the projects to establish funding priorities. 

Page 27 GAO-10-126 Rural Water Infrastructure
 

areas to be served meet the statutory definition of “colonia.” The age

also has failed to provide any guidance elaborating on the meaning of an 

“adequate” water or waste disposal system, or of “colonia.” Despite the lack 

of guidance, USDA told us that it considers as inadequate a system with a

violation of the Safe Drinking Water Act or Clean Water Act, as appropria

As a result of these issues, we believe that USDA has no assurance that 

entities proposing to serve eligible colonias with the required 

ncy 

ny 

te. 

characteristics have received the required statutory preference.42 For 

d 

y 

to the 

•

 that gives priority to colonias 

having the greatest need for such assistance. To do so would require a state 

t 

 

example, we found that USDA gave an entity proposing a water utility 

improvement project in New Mexico the colonia preference and obligate

$700,000 from the colonia funds. The improvements to the water utilit

included a new well, tank, and related infrastructure. Rather than 

reserving the colonia preference to projects that serve areas living without 

these basic necessities, the agency provided the same preference to this

project, which was intended to serve new development, according 

USDA project summary. By awarding the same preference to projects that 

benefit communities with existing infrastructure, the agency is failing to 

give preference to those entities proposing to “provide water supply or 

waste disposal services” to colonias that have the statutory characteristics 

and live without basic necessities. 

HUD. The Cranston-Gonzalez Act requires Colonia Set-aside grants to be 

made in accordance with a distribution plan

to at a minimum identify colonias, discuss the relative needs of colonias, 

and select projects reflecting the colonias with greatest needs.43 However, 

we found that HUD has failed to ensure that state distribution plans reflect 

that priority is given to the colonias with the greatest need. Instead, HUD 

officials told us that it is up to the states to determine the needs-based gran

priorities and the agency does not believe it has the authority to direct states

on how to distribute the funds as long as it is in accordance with a 

distribution plan. We believe that without direction and oversight from 

42The legislative history of the colonias provision describes them as the poorest areas with 

no infrastructure. Floor statements describe colonias as areas completely lacking water 

supply and wastewater systems, rather than having such systems that are inadequate in the 

sense of needing upgrade; for example, colonias are described as without running water, or 

as having wells inadequately separated from waste disposal. 

43For example, a state might identify the universe of colonias and then prioritize them 

based on need, or identify key characteristics of that category of colonias having the 

greatest need and then identify and prioritize colonias with those characteristics. 

Page 28 GAO-10-126 Rural Water Infrastructure
 

HUD, states may not be meeting the statutory requirements. For example, 

one state does not distinguish between Colonia Set-aside funds and

CDBG funds and does not actually “set aside” the colonias funds to 

distribute based on priority of needs. Instead, the state splits the available 

funds among the regional Councils of Governments, which then determine 

how to distribute the funds to local projects. The distribution proces

vary by region—e.g., one region rotates eligibility among the eligible entities 

in the county, providing each eligible entity an equal distribution of the 

funds. The state later adds up the total of the projects that it considers 

qualifying as colonias to justify the set-aside amount. While HUD officials 

may believe states are identifying the colonias with the greatest needs, w

do not agree that this complies with the act, which requires the agency 

take the necessary steps to ensure that the states are doing so. In a July 20

report, the HUD Inspector General also recommended that HUD address 

this issue, and HUD agreed to issue guidance to assist states to “more 

clearly articulate the priorities” in developing their method of distribution.

 regular 

s can 

e 

to 

08 

r 

e 

e it should, among other things, be well targeted to those with the 

greatest needs and the least capacity to meet those needs.45 However, we 

th 

on to 

 

44

As of November 2009, the agency had not yet issued this guidance, but 

officials told us the agency still intends to issue the guidance in the nea

future. 

• The Corps. We have previously reported that for a federal program to b

effectiv

found that the Corps lacks any guidance specific to the colonias funds and

does not have a process to ensure that assistance authorized for colonias 

is targeted at those with greatest need. Instead we found that the Corps 

selects projects on an ad hoc basis.46 According to a Corps official, when 

funds become available, the Corps notifies state officials and asks these 

officials to notify communities of the available assistance. Then 

communities are required to send a letter to the Corps requesting 

assistance. When the Corps receives a letter for assistance, it consults wi

state officials to discuss the project and primarily bases its decisi

44In July 2008, the HUD Inspector General issued a report auditing the Colonias Set-aside 

program, including HUD actions to ensure compliance and detailed review of uses of funds 

by states. Our findings are consistent with those reported by the Inspector General. HUD, 

HUD’s Community Development Block Grant Set-Aside for Colonias Was Not Used for Its 

Intended Purposes, 2008-FW-0001 (Washington, D.C.: July 29, 2008). 

45GAO, 21st Century Challenges, Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: Feb.1, 2005). 

46Corps officials first told us that they considered the colonias projects as congressional 

directives, but later acknowledged that no specific projects had been identified by 

Congress. 

Page 29 GAO-10-126 Rural Water Infrastructure
 

assist the community on the entity’s readiness to enter into the req

cost-sharing agreement. By using this approach, the Corps is failing to 

ensure limited funds are provided to those with the greatest need. 

Appendix II provides additional information on the establishment of 

federal funding to assist colonias and GAO’s analysis of legal requir

uired 

ements 

related to eligibility and project priorities. 

 needs of the border region is a 

difficult undertaking. Among other things, the remoteness of many 

s on 

 and 

d 

e 

ted an 

e 

may wish to 

consider establishing an interagency mechanism or process, such as a task 

rce on water and wastewater infrastructure in the border region that 

includes the federal agencies that administer programs in the region. 

Congress may wish to direct any task force, in partnership with state and 

local officials, to 

Conclusions Meeting the drinking water and wastewater

communities can make it difficult to identify residents in need of water 

and wastewater services. In addition, the program differences resulting 

from separate mandates and project eligibility requirements for the 

various federal programs add to the complexity of coordinating funding 

needed to complete projects in the region. The ultimate success of 

providing these basic services to residents of the border region hinge

several factors, of which a well-coordinated implementation approach 

based on a comprehensive assessment of the region’s existing water

wastewater needs is key. Federal agencies have obligated more than $1.4 

billion in recent years to fund numerous projects that provided water an

wastewater service to residents in the border region. However, despite th

extensive efforts that have gone into these projects and the agencies’ 

recognition over a decade ago of the benefits from coordinated policies 

and procedures, the lack of (1) an overall needs assessment for the region, 

(2) comprehensive coordinated policies and procedures, and (3) 

compliance with all statutory and program requirements is undermining 

the effectiveness of the federal efforts. We believe that the impact of these 

deficiencies has limited the availability of federal assistance, crea

administrative burden for applicants, delayed project completion, and 

failed to ensure that federal funds are used effectively and directed 

according to the criteria established in federal statutes. In a time of 

constrained resources, continuing to provide an uncoordinated federal 

response is not the most effective use of federal resources to meet th

drinking water and wastewater needs in the border region. 

In order to better address the needs of the region, Congress 

Rural Water Infrastructure

fo

Matters for 

Congressional 

Consideration 

Page 30 GAO-10-126 
 

•

e; 

• eds, establish a framework for compatible and 

coordinated policies and procedures across relevant agencies, such as a 

, to 

• evaluate the degree to which there are gaps in the programs and what 

loping 

Congress may also wish to consider reemphasizing the priorities for use of 

nds 

purposes, 

and by directing HUD to report annually to Congress on the purposes for 

oses. 

• he Secretary of Agriculture direct Rural Development to revise its 

Section 306C colonia funds for projects that benefit colonias, as defined by 

• The Secretary of Housing and Urban Development ensure that state 

fit 

est 

Colonia 

Set-aside funds as a distinct component of CDBG monitoring. 

Recommendations for 

leverage collective resources to identify needs within the border region—

including the identification of the water infrastructure status within 

colonias, and the extent to which the lack of institutional capacity has 

impeded communities within the border region from seeking assistanc

in light of these ne

coordinated process for the selection of projects, and standardized 

applications and environmental review and engineering requirements

the extent possible; 

resources or authority would be needed to address them; and 

• provide periodic status reports regarding the progress made in deve

this strategic and coordinated approach. 

Colonia Set-aside funds by specifically requiring HUD to make these fu

available only for grants related to the three existing statutory 

which such funds were used and the steps it is taking to ensure that the 

funds are being used for the required purp

We are making the following three recommendations for executive action. 

To ensure that funding established to meet the needs of colonias is used in

ways that are consistent with statutory and regulatory requirements, we 

recommend that 

Executive Action 

T

process of determining eligibility to ensure that the agency only provides 

federal statute, and to revise its priority process to better target limited 

funds to those projects meeting the statutory preference criteria. 

agencies provide Colonia Set-aside funds only for projects that bene

colonias, as defined by federal statute, and to promptly establish guidance

to ensure states follow a method of distribution that results in the 

prioritization of Colonia Set-aside funds to those colonias with the great

need. Further, the Secretary should monitor the states’ uses of all 

Page 31 GAO-10-126 Rural Water Infrastructure
 

• If the Corps continues to assist communities with water and wastewa

related activities through the colonia program, the Secretary of Defense

direct the Chief of Engineers and Commanding General of the U.S. Army 

Corps of Engineers to develop eligibility criteria and a standard pro

review and select activities for funding that targets the assistance to those 

with the greatest need. The process should comply with all applicable 

regulations and include verification of eligibility. 

ter 

cess to 

rtment of Health and 

Human Service’s Indian Health Service, and the Department of the 

 no 

systems. However, USDA questioned whether a federal level 

em 

hile we 

can 

esources. 

g, we 

ing 

s; 

Agency Comments We provided the U.S. Department of Agriculture (USDA), the 

Environmental Protection Agency (EPA), the Department of Housing and

Urban Development (HUD), and the U.S. Army Corps of Engineers (Corps) 

with a draft of this report for their review and comment. In addition, we 

sent relevant portions of the report to the Department of Commerce’s 

Economic Development Administration, the Depa

In

and Our Evaluation 

terior’s Bureau of Reclamation for their review and technical comment. 

In its written comments, USDA provided several observations on the 

report’s findings but disagreed with the report’s recommendation. 

Specifically, USDA agreed that our report accurately reflects the 

assistance that has been provided in the border region and stated that 

more work and additional funding are needed to continue the progress 

being made. USDA also agreed with our report’s finding that there is

comprehensive federal assessment of the region’s water and wastewater 

comprehensive assessment is needed to effectively address water syst

inadequacies or whether a locally based federal presence that leverages 

local knowledge of local conditions might not be more effective. W

agree that local knowledge of local needs is an important element that 

help inform decision makers, we continue to believe that without a 

comprehensive assessment of the region, federal agencies providing 

assistance to the region lack necessary information on the magnitude of 

the problem and on how best to prioritize and target limited r

Additionally, USDA stated that it believes the examples presented in our 

report where coordination would have improved the project outcome are

rare instances and that the examples of state level coordination in our 

report demonstrate that effective coordination is occurring amongst the 

programs. While we agree that some level of coordination is occurrin

disagree that the examples cited in our report are rare instances. Dur

our review, we contacted numerous officials in the border region—

including local, state, and tribal officials; engineers and other consultant

nonprofit representatives; water and wastewater utility representatives; 

and residents—and these officials consistently provided us with numerous 

Page 32 GAO-10-126 Rural Water Infrastructure
 

examples of the type of concerns they have experienced due to ineffect

coordination among the federal agencies. Moreover, while state efforts to

coordinate funding for water and wastewater projects are beneficial; we 

found that these efforts are not consistent throughout the region and can

not replace the need for coordination of policies and procedures am

federal agencies. We therefore continue to believe that without a 

coordinated approach federal programs continue to place additional 

burden on applicants, waste scarce funds, and limit the overall 

effectiveness of the federal effort. Finally, in its comments, USDA 

disagreed with our recommendation that it should revise its process of 

determining eligibility to ensure that Section 306C colonia funds are only 

provided to those projects that benefit colonias, as defined by federal 

statute, and to revise its priority process to better target limited funds to 

those projects meeting the statutory preference criteria. Specifica

USDA stated that its current process complies with statutory requirem

and that preference is given to entities that propose to provide w

waste disposal services to colonias. In explaining its position, USD

that the characteristics of a colonia to be given preference per the statut

do not constitute a definition. We disagree with USDA’s interpretation of 

the statute and continue to believe that USDA must determine that an area 

proposed for assistance has these characteristics before the agency 

provides preference to an entity for funding decisions. Our 

recommendation would allow entities that propose to provide water and 

wastewater disposal services to colonias that match the statutory 

characteristics to receive preference for limited federal funds and ensure 

that the agency is providing federal funds to those with the greatest need. 

USDA’s letter can be found in appendix IX. 

In its written comments on the draft report, HUD provided several 

clarifications about its disagreement with our interpretation

statutory requirements for the CDBG program and also commented on ou

recommendations, although it did not state whether it agreed or di

with them. For example, with regard to our recommendations that state 

agencies only provide colonia set-aside funds for projects that benefit 

colonias, as defined by federal statute, and th

ive 

ong 

lly, 

ents 

ater or 

A stated 

e 

 of the 

r 

sagreed 

at HUD establish guidance to 

ensure that states follow a method of distribution that results in the 

reatest 

dress 

prioritization of Colonia Set-aside funds to those colonias with the g

need, HUD stated that it will issue guidance to the states that will ad

the proper administration of the Colonia Set-aside funds. HUD stated that 

this guidance is currently being finalized, but did not provide a timetable 

for its release or specify how the guidance would address the issues GAO

identified. With regard to our recommendation that HUD should take 

additional actions to monitor the states’ use of Colonia Set-aside funds, 

HUD stated that it already monitors distinct components of the state

Page 33 GAO-10-126 Rural Water Infrastructure
 

CDBG program and as part of this process also monitors a portion of the 

Colonia Set-aside funds. HUD stated that it has recently developed a new 

monitoring exhibit specifically to assist in the review of Colonia Set-aside 

funds. Because HUD has not finalized its guidance we believe that our 

recommendation remains valid. The Department of Housing and Urban 

Development’s letter can be found in appendix X. 

In its comments on the draft report, DOD stated that it believes that th

Corps’ current method of determining which communities receive 

assistance under its Section 219 program is appropriate; however, DOD 

partially concurred with our recommendation, and stated that should 

Congress direct additional funds to the colonias Section 219 program, t

Corps will develop written guidance on eligibility criteria and the process

for selection of activities. While we appreciate DOD

e 

he 

’s agreement with the 

need for a formal process and written guidance, we continue to be 

 to 

t 

 of 

concerned about the Corps ad hoc selection process for these colonias 

water and wastewater projects. This is because such a process fails

ensure that limited funds are provided to those colonias with the greates

need—which GAO has found to be a key factor in federal program 

effectiveness. The Department of Defense’s letter can be found in 

appendix XI. 

The U.S. Environmental Protection Agency, the Department of 

Commerce’s Economic Development Administration, the Department of

Health and Human Service’s Indian Health Service, and the Department

the Interior’s Bureau of Reclamation provided technical comments, which 

we incorporated throughout the report as appropriate. 

Page 34 GAO-10-126 Rural Water Infrastructure
 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of it until 30 days from 

e date of this report. At that time, we will then provide copies of this 

report to the appropriate congressional committees and other interested 

arties. We will also send copies to the Secretaries of Agriculture, Housing 

and Urban Development, and Defense, and the Administrator of the 

nvironmental Protection Agency. In addition, this report will be available 

at no charge on GAO’s Web site at http://www.gao.gov. If you or your staff 

t. 

Director, Natural Resources and Environment 

th

p

E

have questions about this report, please contact me at (202) 512-3841 or 

mittala@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this repor

Key contributors to this report are listed in appendix XII. 

Sincerely Yours, 

Anu K. Mittal 

Page 35 GAO-10-126 Rural Water Infrastructure
Appendix I: Scope and Methodology 

Page 36 GAO-10-126 

Appendix I: Scope and Methodology 

To determine how much federal funding was obligated to rural households 

and communities in the border region for water and wastewater projects, 

we identified seven agencies with programs that may have provided 

assistance to these areas. We then collected and analyzed obligation and 

project location data from each of the seven agencies—the U.S. 

Department of Agriculture (USDA), the Environmental Protection Agency 

(EPA), the Department of Housing and Urban Development (HUD), the 

U.S. Army Corps of Engineers (the Corps), the Department of Health and 

Human Service’s Indian Health Service (IHS), the Department of 

Commerce’s Economic Development Administration (EDA), and the 

Department of the Interior’s Bureau of Reclamation (Reclamation)—from 

fiscal years 2000 through 2008. We collected data from each agency for the 

97 counties that are within 150 miles of the border region. We 

geographically located the data using MapInfo. We assessed the reliability 

of the data we used by reviewing information about the underlying 

database systems, reviewing the data to identify outliers and inconsistent 

or missing values, and discussing the data with knowledgeable agency 

officials. We present more details about the data, their limitations, and 

how we addressed these limitations below. On the basis of these efforts, 

we determined that the data were sufficiently reliable for the purposes of 

this report. 

Determining How 

Much Federal 

Funding Was 

Provided to the 

Border Region 

Environmental Protection 

Agency 

The Border Environmental Cooperation Commission and the North 

American Development Bank provided grant and loan obligation data for 

all projects that received funds from EPA’s U.S.-Mexico Border Water 

Infrastructure Program. The reports are based on data tracked by the 

agency’s financial systems and program management data. As U.S.-Mexico 

Border Water Infrastructure Program grant funds are obligated to entities 

in both the United States and Mexico, we filtered the data to include only 

projects that were located in the United States. Additionally, we included 

only water and wastewater projects in our review. 

EPA provided grant obligation data for congressionally designated 

projects from the Special Appropriation Act Projects (SAAP) database. We 

filtered these data to include only projects whose primary purpose was 

designated as drinking water or wastewater. The SAAP database does not 

include county-level data, so we identified the county for each project 

based on location data EPA was able to provide. After the county was 

identified for each project, we filtered the data to include only projects in 

counties within 150 miles of the border. 

 Rural Water Infrastructure 
Appendix I: Scope and Methodology 

EPA provided grant obligation data on tribal programs from spreadsheets 

used to track projects. EPA provided data for those tribal nations it 

determined to be within 150 miles of the border region. 

State agencies from Arizona, California, New Mexico, and Texas provided 

loan obligation data for the Drinking Water State Revolving Fund and 

Clean Water State Revolving Fund programs. 

U.S. Department of 

Agriculture 

USDA provided grant and loan obligation data for all water and 

wastewater utility programs from its Community Program Application 

Processing (CPAP) system. For some projects that were within the areas 

of our site visits, we obtained additional information, such as copies of the 

original applications and project summary data. USDA provided grant 

obligation data for the single-family programs from the Rural Development 

Data Warehouse. A number of records in the dataset did not include 

physical addresses. However, all records did include at least county and 

state data. 

We did not include one of USDA’s Section 504 single-family programs in 

our review. The Section 504 program provides funds to individual 

households for numerous activities, including water and wastewater 

projects—such as repairs to septic systems or water wells—but the funds 

can also be used for other household repairs not related to water or 

wastewater. USDA does not centrally track how the funds were utilized, 

and we could not determine what portion of the funds was relevant for our 

review. 

Department of Housing 

and Urban Development 

HUD provided grant obligation data from its Integrated Disbursement and 

Information System (IDIS). HUD was not able to extract data by county, 

but rather provided data for all water and wastewater activities in counties 

eligible to receive Community Development Block Grant funding in Texas, 

New Mexico, Arizona, and California. We then reviewed the project 

location data and determined the county in which each project was 

located, and we imported the data into a geographic information system 

and extracted only those activities conducted in the 97 counties included 

in our review. 

Within the IDIS, HUD tracks project activities through matrix codes. We 

obtained data for matrix code 03J—water and sewer improvements, and 

matrix code 14A—rehab, single-family residential units. HUD also provides 

funds for planning purposes—matrix code 20—some of which may have 

Page 37 GAO-10-126 Rural Water Infrastructure
Appendix I: Scope and Methodology 

been used for water and wastewater activities. However, we found the 

data for matrix code 20 often did not include enough information to 

determine whether the project included a water or wastewater 

component. We did not include these projects in our review. 

Furthermore, although we requested data from fiscal years 2000 through 

2008, HUD could not ensure that all funds for fiscal year 2008 were 

included in our data. At the time HUD extracted the data, the agency had 

not verified that all states had finished inputting data into the database. 

However, officials stated that they believe most, if not all, of the data were 

included. 

Indian Health Service IHS provided grant obligation data from its Project Data System. We 

obtained data for all water and wastewater projects in Arizona, California, 

New Mexico, and Texas. We then reviewed and filtered the data by tribal 

name and included only the funds obligated to tribal nations located 

within 150 miles of the U.S.-Mexico border. We determined the tribal 

nations located in the border region using data provided by EPA, IHS, and 

the Bureau of Indian Affairs. IHS also provided needs data from the 

Sanitation Deficiency System. 

Economic Development 

Administration 

EDA provided grant obligation data from its Operations Planning and 

Control System. Agency officials identified and provided data for those 

projects with a water or wastewater component. We reviewed the data and 

excluded several projects from our review as they were not directly 

related to the provision or improvement of water or wastewater systems, 

and thus outside the scope of our review. 

U.S. Army Corps of 

Engineers 

The Corps provided data from its P2 Project Management System. Corps 

officials identified and provided data for drinking water and wastewater 

projects that received assistance in the border region. We did not collect 

data for regulatory permits or projects conducted on military installations 

in the region. 

Bureau of Reclamation Reclamation identified and provided data for water and wastewater 

projects. We determined that several projects were not directly related to 

the provision or improvement of drinking water or sewage treatment 

systems, and were thus outside the scope of our review. Specifically, we 

Page 38 GAO-10-126 Rural Water Infrastructure
Appendix I: Scope and Methodology 

did not include obligations for activities related to storm water runoff, 

water recycling, or desalination studies. 

Rural Areas Identified 

Using a System Based on 

Population and 

Commuting Patterns with 

Census Tracts 

The federal government has not established a formal or consistent 

definition of what constitutes a rural area. The term “rural” is defined 

differently by Congress and each federal agency according to agency 

guidelines and individual project or program authorizations. Depending on 

the agency, rural areas may be defined as ranging from fewer than 2,500 to 

fewer than 50,000 persons. Some agencies and programs that fund water 

and wastewater projects in the border region do not focus on serving rural 

or urban areas but instead provide funds to eligible applicants from any 

location. 

We determined that, for purposes of this report, the best system for 

differentiating rural from urban areas would be based on ZIP codes rather 

than on counties. Because the number of ZIP codes in the nation is so 

much larger than the number of counties, classification systems based on 

ZIP code measures offer a more precise means of identifying rural areas 

than county-based systems. However, because of data limitations and the 

multiple ZIP codes often served by projects, we could not reliably track 

funding to the ZIP code level; we chose to use the dominant Rural Urban 

Commuting Area (RUCA) system, developed by the Washington State 

Office of Community and Rural Health in 2001. The system relies on both 

population and commuting patterns of census tracts to classify each 

county as rural or urban based on the counties’ dominant commuting 

patterns.1

 The dominant RUCA system is based on the 10-tiered subcounty 

RUCA system developed by ERS in conjunction with the Department of 

Health and Human Services in the late 1990s. The rural-urban continuum 

system does not explicitly define “rural.” However, the rural-urban 

continuum codes can be combined to create rural and urban designations 

for counties. 

 

1

Washington State Department of Health, “Guidelines for Using Rural-Urban Classification 

Systems for Public Health Assessment,” 2001. 

Page 39 GAO-10-126 Rural Water Infrastructure
Appendix I: Scope and Methodology 

To assess the effectiveness of federal efforts, we based our review on key 

evaluation criteria identified in previously published GAO reports.2

 Our 

review did not assess the benefits of individual projects; rather, we 

determined the effectiveness of the collective federal effort of the 

programs. Specifically, to determine the effectiveness of the federal effort, 

we identified whether the agencies with programs targeted to the border 

region had (1) comprehensively assessed the needs they seek to address; 

(2) developed cooperative policies, procedures, and requirements; and (3) 

adhered to all statutory and regulatory requirements, including those that 

ensure assistance is targeted to those with the greatest need. 

Effectiveness of Federal 

Efforts 

In order to determine whether federal agencies have comprehensively 

identified the drinking water and wastewater needs of the region, we 

reviewed existing assessments and interviewed federal officials regarding 

their assessment efforts. To determine agencies’ efforts to enhance and 

sustain collaboration with other agencies, we reviewed coordination 

documentation, such as memorandums of agreement; reviewed program 

requirements; and interviewed federal officials. To determine if agencies’ 

programs comply with statutory requirements, we reviewed applicable 

authorizing statutes, appropriations acts, regulations, and agency policies 

and guidance. We also reviewed program policies and procedures to solicit 

and accept applications, and interviewed federal officials regarding their 

practices. In addition, we reviewed key legislative history for key statutes 

and any relevant case law. Furthermore, we asked agency attorneys and 

program officials for explanations where we found noncompliant 

practices. 

We conducted site visits to colonias, tribal nations, and other communities 

in Texas, New Mexico, and Arizona. During the site visits, we observed 

water and wastewater conditions in the border region and federally 

funded projects. We also interviewed local, state, tribal, and federal 

officials; engineering consultants; nonprofit representatives; urban 

planners; water and wastewater utility representatives; and residents 

regarding their experiences applying for or receiving assistance from 

federal agencies. In selecting our site visit locations, we considered a 

number of factors, including (1) geographic location, (2) proximity to 

 

2

GAO, 21st Century Challenges, Reexamining the Base of the Federal Government, 

GAO-05-325SP (Washington, D.C.: Feb.1, 2005), GAO, Effectively Implementing the 

Government Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1, 

1996); and Practices That Can Help Enhance and Sustain Collaboration Among Federal 

Agencies, GAO-06-15 (Washington, D.C.: Oct.21, 2006). 

Page 40 GAO-10-126 Rural Water Infrastructure
Appendix I: Scope and Methodology 

identified colonias, (3) proximity to tribal nations, (4) location of federally 

funded water and wastewater projects, (4) location of federal agency field 

offices, and (5) recommendations from state and local officials of areas 

that either lacked basic services or have received the services as a result 

of receiving federal funds. While the results of the site visits cannot be 

generalized to all sites or projects, the results do reflect a range of 

geographic diversity and water and wastewater needs. In addition to the 

site visits, we conducted telephone interviews with local, state, tribal, and 

federal officials, and nonprofit representatives in Texas, New Mexico, 

Arizona, and California not located within the areas where we conducted 

site visits to obtain additional information on water and wastewater 

conditions in their communities and their experiences with federal 

assistance. 

Furthermore, we attended two interagency coordination meetings in 

which various federal and state agency representatives discussed the 

status of ongoing drinking water and wastewater projects in the border 

region and the challenges they face completing them. 

Page 41 GAO-10-126 Rural Water Infrastructure
dditional Information on 

gibility and Prioritization Requirements 

d Corps Programs Targeted

ion

Page 42 GAO-10-126 

Appendix II: A

Eli

for USDA, HUD, an

to the Border Reg 

Appendix II: Additional Information on Eligibility 

and Prioritization Requirements for USDA, HUD, 

and Corps Programs Targeted to the Border Region

This appendix provides additional information on GAO’s analysis of legal 

requirements related to eligibility and project priorities for targeted USDA, 

HUD, and Corps programs. This information includes relevant history of 

the program’s original authorizing legislation, and additional details and 

citations. 

Legislative History of the 

USDA, HUD, and Corps 

Colonias Programs 

The federal government’s role in assisting colonias was primarily 

established when the 101st and 102nd Congresses established dedicated 

funding—in programs administered by USDA, HUD, and the Corps—to 

address the needs of colonias.1

 These agencies were directed to establish 

programs dedicated to assisting these communities. The legislative 

histories of the program authorizations emphasize that the key concern 

over colonias was public health impacts stemming from the lack of clean 

drinking water and the inadequate disposal of sewage; for example, one 

particular concern was that the inadequate systems in use, combined with 

flooding conditions, would result in human waste in the roads.2

Statements throughout the Congresses consistently depict colonias as 

areas that lack safe drinking water and sewage disposal facilities, and the 

 

1

Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916 (Nov. 28, 

1990); Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. No. 101-624, § 2327 

(Nov. 28, 1990) (amending the Consolidated Farm and Rural Development Act); Water 

Resources Development Act (WRDA) of 1992, Pub. L. No. 102-580, § 219 (Oct. 31, 1992). 

2

See, e.g., S. Rep. 102-283 (May 15, 1992) at 10 (“Colonias are rural, often remote 

communities along the U.S.-Mexico border. It is estimated that some 350,000 people live in 

colonias and most generally lack sewage treatment facilities and safe drinking water . . . . 

[P]rovision of adequate water and sewer facilities to colonias . . . . is especially important in 

light of the risk of cholera spreading to these communities from Central America.”). The 

history also includes several recitations of statistics of increased incidence of hepatitis and 

other diseases in the colonias. 

 Rural Water Infrastructure 
Appendix II: Additional Information on 

Eligibility and Prioritization Requirements 

for USDA, HUD, and Corps Programs Targeted 

to the Border Region 

colonias were sometimes likened to areas with “third world” conditions.3

ewer 

 HUD-

 

Substandard housing is also mentioned,4

 but the lack of water and s

are the predominant characteristics. For example, the sponsor of the

administered Colonia Set-aside explained, “These citizens do not have 

sewer, they do not have sewage systems, they do not have running water, 

and I think that is a travesty in America, that American citizens do not 

have the basic necessities of life.”5

 Another representative, when 

introducing amendments to the USDA program legislation, stated “[t]here 

are hundreds of individuals that live in the colonias that will suffer from a 

lack of adequate water and sanitation facilities. This situation is truly 

dangerous in terms of sanitation and health hazards from the lack of 

proper water and sewer systems.”6

 Finally, when the provision authorizing 

the Corps’ colonias assistance was added to the Water Resource and 

Development Act bill, a representative explained: “Colonias are rural 

settlements along the United States-Mexico border which lack or have 

inadequate basic water and sewer facilities. All of the colonias to receive 

funding under this amendment are located in the United States . . . . Most 

of the inhabitants of these communities use outhouses or substandard 

3

See, e.g., 136 Cong. Rec. H6122 (daily ed. July 31, 1990) (Statement of Mr. Ortiz speaking 

on the amendment adding the provision for the CDBG set-aside) (“For those of our 

colleagues who are still unfamiliar with the plight of the impoverished men, women and 

children living in colonias, let me make a comparison with which you can identity. The 

colonias are America’s version of the Third World. These people have never known clean 

drinking water, simply because they have no access to an adequate water supply. 

Additionally, they lack any sort of wastewater disposal system, exposing them to serious 

health risks. These people are the most vulnerable citizens in our society, making it 

incumbent on us to make life as safe for them as possible.”); 134 Cong. Rec. H10161 (daily 

ed. Oct. 13, 1988) (Statement of Mr. Bartlett on a predecessor bill) (“Mr. Speaker, today 

literally tens of thousands of individuals along the borders live in circumstances of the 

worst and most unsupportable kinds of living conditions, unsupportable and comparable in 

many areas with conditions found in Third World countries. The reason for that is they live 

in these areas called colonias, which are small plots of land side by side, sold and 

subdivided as plots of land, but without the basic urban infrastructure put into those 

colonias. They are sold without sewer and water and other items of infrastructure.”). 

4

See, e.g., H. Rep. No. 100-1101 (1988) at 3 (concerning a predecessor bill of the Community 

Development Block Grant set-aside) (“According to estimates by Congressional Research 

Service, over 180,000 persons live in the subdivision areas, known as ‘colonias.’ Most of 

these subdivisions are located in unincorporated areas of poor, essential rural counties of 

these states. The inhabitants of these areas lack such basic facilities, as waste and sewage 

systems, as well as safe and sanitary housing.”). 

5

136 Cong. Rec. H6122 (daily ed. July 31, 1990) (Statement of Mr. Coleman). 

6

138 Cong. Rec. S17233 (Oct 7, 1992) (Statement of Mr. Ford regarding HR 6138, which 

became Pub. L. 102-554 and allowed an exception to one of the eligibility requirements for 

recognized colonias). 

Page 43 GAO-10-126 Rural Water Infrastructure
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to the Border Region 

septic tanks for their waste disposal. A set-aside for these areas is 

particularly crucial from a health standpoint. Because of substandard 

water resources, contagious diseases pose a particular threat to people 

living in colonias.”7

The Consolidated Farm and Rural Development Act, as amended, directs 

USDA to provide financial assistance for water supply and waste facilities 

and services to communities whose residents face significant health risks, 

because the communities’ residents do not have access to such facilities.8

The act states that USDA must give preference to entities “that propose to 

provide water supply or waste disposal services to the residents of those 

rural subdivisions commonly referred to as colonias that are characterized 

by substandard housing, inadequate roads and drainage, and a lack of 

adequate water or waste facilities.”9

 Thus, the provision requires USDA to 

give preference to water and waste projects in colonias where other 

infrastructure and housing are also inadequate. 

USDA 

We found that USDA has no process in place to ensure that entities 

“propos[ing] to provide water supply or waste disposal services” to these 

colonias are given preference. USDA officials explained that the agency 

considers the funding for colonias to be a set-aside, and therefore only 

 

7

138 Cong. Rec. H9239 (Sept. 23, 1992). 

8

Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. No. 101-624, § 2327, Nov. 

28, 1990 (emphasis added) (amending the Consolidated Farm and Rural Development Act, 

§ 306c), codified at 7 U.S.C. § 1926c (2009). The act also requires funds to be available only 

if they will be used primarily to provide services to residents of a county meeting certain 

per capita income and unemployment criteria; as an exception, this requirement may be 

satisfied if a rural area was recognized as a colonia as of Oct. 1, 1989. 7 U.S.C. § 1926c(2) 

(2009). 

9

In addition to these statutory eligibility requirements, appropriations acts have limited 

funds for the 306C colonias program to those colonias along the United States/Mexico 

border, which USDA has interpreted to mean within 150 miles of the border. See, e.g., 

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies 

Appropriations Act, 2000, Pub. L. No. 106–78 (Oct.. 22, 1999), 113 Stat. 1150-51; Agriculture, 

Rural Development, Food and Drug Administration, and Related Agencies Appropriations 

Act, 2006, Pub. L. No. 109–97 (Nov. 10, 2005), 119 Stat. 2136. 

Page 44 GAO-10-126 Rural Water Infrastructure
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for USDA, HUD, and Corps Programs Targeted 

to the Border Region 

considers entities proposing to assist colonias for this funding.10 However, 

in implementing the program, USDA told us it views any entity proposing 

to assist an area that the relevant state or local government has designated 

as a colonia as qualifying for the preference,11 and awards funds to them 

on a first-come, first-served basis.12 USDA does not attempt to 

independently verify whether these entities meet the threshold eligibility 

requirement (that they propose to provide service to areas where most 

residents lack access to adequate water or waste facilities), or that the 

areas to be served meet the statutory definition of “colonia.” While agency 

regulations repeat the statutory requirement for threshold eligibility13 and 

 

10Recent appropriations acts have provided either an upper limit or a fixed amount, within 

the Rural Community Advancement Program funds, to be used in colonias for water and 

wastewater improvements. See, e.g., Agriculture, Rural Development, Food and Drug 

Administration, and Related Agencies Appropriations Act, 2006, Pub. L. No. 109–97 (Nov. 

10, 2005), 119 Stat. 2136 (stating that “not to exceed $25,000,000 shall be for water and 

waste disposal systems to benefit the Colonias . . . . including grants pursuant to section 

306C”), Consolidated Appropriations Act, 2008 Pub. L. No. 110–161 (Dec. 26, 2007) 

(providing $65 million for colonias, Alaskan villages, and Native Americans, to be allocated 

consistent with the historical allocation). USDA has a similar set-aside program for Native 

American tribes. 

11While an amended provision of the statute refers to areas “recognized as” colonias, this 

provision serves only as an exception to threshold income and unemployment criteria, and 

does not apply to the preference provision. See Agricultural Credit Improvement Act of 

1992, Pub. L. No. 102-554 § 24 (October 28, 1992); 7 U.S.C. §§ 1926c(a)(2), (c)(1) (2009). 

12USDA regulations provide for a numerical score to be assigned to each application. 7 

C.F.R. § 1777.13(d) (2009). The scores include points for a “colonia” but do not reflect 

whether a colonia meets the statutory preference criteria. 7 C.F.R. 1777.13(d)(4) (2009). 

USDA officials initially confirmed the regulation does not include priority points for the 

specified group in the statute (explaining its position that “the preference group listed is 

equal to the eligible applicants”). USDA officials later stated that the regulation sets up a 

scoring system whereby statutory preference characteristics are identified and points are 

awarded based on the preference. However, the regulation merely awards points to 

colonias, and does not provide for identification of the individual characteristics. 7 C.F.R. § 

1777.13(d)(4) (2009). In addition, USDA generally does not use the scores, but awards 

funds on a rolling basis. While the regulations provide that scores are to be used when 

requests exceed available funds, 7 C.F.R. § 1777.13(c), this condition does not occur, since 

instead of having periodic deadlines at which points USDA could determine whether 

requested amounts exceed those available, USDA awards funds until they are gone. Thus, 

even if USDA changes its practice and develops scores to identify projects qualifying for 

the preference as a subset of colonias, its practice of awarding funds on a rolling basis 

would fail to give effect to the scores. 

137 C.F.R. § 1777.12 (b) (2009). 

Page 45 GAO-10-126 Rural Water Infrastructure
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for USDA, HUD, and Corps Programs Targeted 

to the Border Region 

define “colonia”,14 the agency has failed to provide any guidance 

elaborating on the meaning of an “adequate” water or waste disposal 

system, or how to identify those colonias with the statutory preference 

characteristics. Despite the lack of guidance, USDA told us that it 

considers as inadequate a system with any violation of the Safe Drinking 

Water Act or Clean Water Act, as appropriate. Furthermore, the agency 

simply accepts local designations of colonias to satisfy the regulation and 

the statute. 

As a result, USDA has no assurance that entities proposing to serve 

colonias with the required characteristics have received the required 

preference.15 By allowing colonia funds to be used for projects that benefit 

communities with existing infrastructure, the agency is failing to give 

preference to those colonias that have the statutory characteristics and 

live without basic necessities. 

 

147 C.F.R. § 1777.4 (2009) (The regulatory definition differs from the statute’s articulation of 

colonias in the context of preference. Compare the regulation’s “Any identifiable 

community designated in writing by the State or county in which it is located; determined 

to be a colonia on the basis of objective criteria including lack of potable water supply, lack 

of adequate sewage systems, and lack of decent, safe, and sanitary housing, inadequate 

roads and drainage; and existed and was generally recognized as a colonia before October 

1, 1989” to the statute’s preference to entities proposing to serve residents of rural 

subdivisions “commonly referred to as colonias, that are characterized by substandard 

housing, inadequate roads and drainage, and a lack of adequate water or waste facilities.”). 

USDA acknowledged the two are not identical, but stated its position that they are 

substantially similar. 

15The legislative history of the colonias provision describes them as the poorest areas with 

no infrastructure. A committee report on a predecessor bill describes colonias as follows: 

“It is not uncommon for colonia residents to rely on water from irrigation ditches or from 

shallow wells drilled on the lot where their home is located, in some cases dangerously 

close to outhouses or pit latrines. In other areas, colonia residents are forced to transport 

and store water from many miles away, often in used, 55-gallon chemical drums. The water 

from such sources is often dangerously contaminated. In colonias without adequate 

wastewater systems, heavy rains can cause raw sewage overflows or seepage to the soil’s 

surface. Residents are sometimes forced to wade through the overflow to get to school or 

work.” H.R. Rep. 101-415 (1990). Floor statements describe colonias as areas completely 

lacking water supply and wastewater systems, rather than having such systems that are 

inadequate in the sense of needing upgrade; for example, colonias are described as without 

running water, or as having wells inadequately separated from waste disposal. See, e.g., 136 

Cong. Rec. H796-97 (Statement of Mr. De La Garza, “This title seeks to provide assistance 

to all identified colonias which have substandard housing, inadequate roads and drainage, 

and a lack of adequate water or wastewater facilities;” statement of Mr. Coleman, “These 

residents live in homes without running water or sewage collection facilities.”). 

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for USDA, HUD, and Corps Programs Targeted 

to the Border Region 

Under section 916 of the Cranston-Gonzalez National Affordable Housing 

Act, the states of Arizona, California, New Mexico, and Texas shall each 

make available, “for activities designed to meet the needs of the residents 

of colonias in the State relating to water, sewage, and housing,” a 

specified percentage of CDBG funds they receive.16 Under the act, the term 

“colonia” means any identifiable community that, among other things, is 

determined to be a colonia on the basis of objective criteria, including lack 

of potable water supply, lack of adequate sewage systems, and lack of 

decent, safe, and sanitary housing.17 The act requires grants to be made in 

accordance with a distribution plan that gives priority to colonias having 

the greatest need for such assistance. In short, the act requires grants to be 

made for projects meeting the needs of colonias residents, which must be 

related to water, sewage, and housing, and which give priority to the 

colonias with greatest need. 

HUD 

With respect to the meaning of “colonia,” HUD told us the agency has not 

developed guidance regarding interpretation of the definition or 

determination of eligible entities.18 HUD’s sole written interpretation of the 

 

16Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916 (Nov. 28, 

1990), as amended by Housing and Community Development Act of 1992, Pub. L. No. 102-

550, § 810 (Oct. 28, 1992); 42 U.S.C. § 5306 Note (2009) the act originally required the setaside only for fiscal years 1991 to 1994 (emphasis added). Appropriations acts made the 

set-aside mandatory in fiscal year 1996 and then permanently required beginning in fiscal 

year 1997. Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. 104-

134, 110 Stat 1321-272 (April 26, 1996); Departments of Veterans Affairs and Housing and 

Urban Development, and Independent Agencies Appropriations Act, 1997 Pub. L. 104-204, 

110 Stat 2874, 2887 (Sept. 26, 1996). 

17Statements throughout the legislative history of the act consistently depict colonias as 

lacking in drinking water and sewer facilities. Conversely, there are no statements in the 

history suggesting a colonia could be a community merely featuring substandard housing, 

but having adequate water and wastewater. See, e.g., 134 Cong. Rec. H10161 (daily ed. Oct. 

13, 1988) (Statement of Mr. Bartlett) (“Mr. Speaker, today literally tens of thousands of 

individuals along the borders live in circumstances of the worst and most unsupportable 

kinds of living conditions, unsupportable and comparable in many areas with conditions 

found in Third World countries. The reason for that is they live in these areas called 

colonias, which are small plots of land side by side, sold and subdivided as plots of land, 

but without the basic urban infrastructure put into those colonias. They are sold without 

sewer and water and other items of infrastructure.”). 

18E.g., HUD OGC-CD Div., interview. HUD’s Web site describes colonias: “Colonias are rural 

communities located within 150 miles of the US-Mexican Border. They often lack the basic 

necessities most Americans take for granted—running water, electricity, and paved 

roads... Without safe, sanitary and affordable housing, drinkable water, sewer and drainage 

systems, colonias struggle with issues often associated with ‘Third World’ countries.” 

Http://www.hud.gov/groups/farmwkercolonia.cfm (last visited Oct. 22, 2009). 

Page 47 GAO-10-126 Rural Water Infrastructure
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definition, issued in a 2003 notice,19 asserts that all three criteria must be 

met; nonetheless, HUD officials also stated that the agency allows states to 

interpret the definition as requiring only one of the three criteria to be 

met.20 Finally, HUD officials told us that as they give grants to the states 

for distribution to colonias, the states are ultimately responsible f

determining eligible entities; to do so, the states rely on formal 

“designation” of colonias. Without guidance from HUD, states have applied 

the requirement differently. For example, in California and New Mexico, 

most colonias are designated as communities with substandard housing 

and a lack of either potable water or adequate sewage systems. In Arizona 

designations use any one of the three statutory criteria. In Texas, 

designations are made for areas with substandard housing that lack either 

adequate water or wastewater treatment, and which are unincorporated, a 

criterion not found in the act. While interpreting colonias as those 

designated by states may have been the correct interpretation of the 

Cranston-Gonzalez Act until 1992, in that year Congress repealed a 

provision requiring that a colonia must be designated as such by the state 

to be eligible for funds.

or 

requirements. 

 

21 A committee report explains that the designation 

process was changed so that a colonia can be qualified for this program 

without regard to a state or county action.22 We believe that HUD’s 

reliance on the states in carrying out section 916 fails to give effect to this

change in law. HUD officials said that the CDBG Program relies on states 

to make decisions that make the most sense for the particular state, and 

officials do not agree that varying interpretations by states suggest that the

lack of guidance is problematic. However, officials stated that HUD will be 

issuing guidance, which they say will include information on the 

documentation states need to support that a colonia meets statutory

19HUD Office of Community Planning & Development, Notice CPD-03-10: Use of HUD 

Resources to Assist Colonias (Oct. 8, 2003). The notice expired in 2004. However, in its 

response to the IG report, HUD stated it would reissue the notice. HUD Office of Inspector 

General, Audit Report 2008-FW-0001, p. 26 (July 29, 2008). 

20E.g., HUD OGC-CD Div., interview. 

21 Housing and Community Development Act of 1992, Pub. L. No. 102-550, § 810 (Oct. 28, 

1992). 

22According to a relevant committee report, the state designation requirement had 

frustrated the purposes of the colonias grant program because some states and counties 

had designated few, if any, recipients. H.R. Rep. No. 102-760 at 146, 152-53. (1992) 

(accompanying H.R. 5334). 

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HUD officials also told us that it is up to the states to determine the needsbased grant priorities. However, under the act, states must distribute the 

colonia funds according to distribution plans that give priority to the 

colonias in the greatest need of assistance.23 To do so would require a state 

to at a minimum identify colonias, discuss the relative needs of colonias, 

and select projects reflecting the colonias with the greatest needs.24

However, we found that HUD has failed to ensure that state distribution 

plans reflect priority given to the colonias with greatest need. Instead, 

HUD officials do not believe the agency has the authority to direct states 

on how to distribute the funds as long as it is in accordance with a 

distribution plan. Without direction and oversight from HUD, states may 

not be meeting the statutory requirements. While HUD officials may 

believe states are identifying the colonias with the greatest needs, section 

916 requires the agency to not just rely on mere belief, but take such steps 

as required to ensure it is doing so. 

HUD officials also told us that the agency interprets the statute as 

authorizing colonia funds to be spent on any currently eligible CDBG 

activity. However, the statute expressly limits the set-aside to activities 

relating to water, sewage, and housing.25 Lacking guidance and direction 

from HUD, states have applied the requirement differently. 

Finally, HUD officials said they are required to give states “maximum 

feasible deference” in interpreting statutory requirements related to the 

Colonia Set-aside. HUD regulations establish the maximum feasible 

deference policy; however, the regulations provide for deference only to 

states’ interpretations of CDBG requirements under the Housing and 

Community Development Act of 1974 and certain HUD regulations.26 The 

 

23Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916(c) 

(November 28, 1990); 42 U.S.C. § 5306 Note (2009). 

24For example, a state might identify the universe of colonias and then prioritize them 

based on need, or identify key characteristics of that category of colonias having the 

greatest need, and then identify and prioritize colonias with those characteristics. 

25Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916(a) (Nov. 

28, 1990); 42 U.S.C. § 5306 Note (2009). HUD officials stated that the agency considers the 

separate provision itemizing activities, section (b), to conflict with and supersede the 

limitation of section (a) for funds to be set-aside for activities relating to water, sewage, 

and housing. However, the provisions are harmonious, as the limitation in section (a) acts 

to modify the activities listed in (b). Thus, the statute indicates that set-aside funds are to 

be used for those activities in (b) that relate to water, sewage, and housing. 

2624 C.F.R. §§ 570.480(c), 570.3 (2009). 

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Colonia Set-aside requirement, however, was established by section 916 of 

the Cranston-Gonzalez National Affordable Housing Act,27 which stands 

alone and is not an amendment to the Housing and Community 

Development Act of 1974. Thus, HUD’s maximum feasible deference 

regulation by its terms does not encompass state interpretations related to 

the set-aside.28 Even if it were applicable, the regulation limits deference to 

state interpretations that “are not plainly inconsistent with the Act and the 

Secretary’s obligation to enforce compliance with the intent of the 

Congress as declared in the Act.”29 As outlined above, HUD has not taken 

steps to ensure state interpretations related to funding of set-aside 

projects, such as which activities are eligible, are in accordance with law. 

The Water Resources Development Act of 1992 authorized the Corps to 

provide assistance to colonias.30 The colonias authorization is unique 

among WRDA section 219 projects, which are otherwise specific 

earmarked projects; that is, Congress has not directed the funds to 

particular colonias projects.31 The authorization limits grants to “colonias 

in the United States along the United States-Mexico border,” but does not 

define colonias. While limited, the legislative history shows that colonias 

were understood to be “rural settlements along the United States-Mexico 

border which lack or have inadequate basic water and sewer facilities,” 

and that “[m]ost of the Inhabitants of these communities use outhouses or 

The Corps 

 

27Pub. L. No. 101-625, § 916 (Nov. 28, 1990). 

28In the 2003 notice, HUD, by contrasting the colonia set-aside requirement with the general 

policy of maximum feasible deference, recognized the set-aside as an exception to that 

policy (“Although States are afforded maximum feasible deference in choosing which 

projects and grantees to fund with CDBG dollars, the Cranston-Gonzalez National 

Affordable Housing Act (NAHA) established the Colonia Set-Aside, which mandated that 

Texas, New Mexico, California and Arizona spend up to 10% of their FY 1991 CDBG grant 

on projects that benefit colonias.”). HUD Office of Community Planning & Development, 

Notice CPD-03-10: Use of HUD Resources to Assist Colonias (Oct. 8, 2003). 

2924 C.F.R. §§ 570.480(c), 570.3 (2009). 

30Pub.L. No. 102-580 § 219 (Oct. 31, 1991); Pub.L. No. 110-114 § 5006(a)(3) (Nov. 8, 2007), 

121 Stat 1192 (authorizing appropriation of $35 million “for providing construction 

assistance” to the colonias project). 

31The Corps considers the colonias funds to be a congressional add. In the absence of 

specific projects identified by Congress, the Corps has exclusively awarded assistance to 

projects recommended by a Texas state agency. The Corps implements the assistance, as 

with all other section 219 projects, using cost-share agreements, a form of cooperative 

agreement. 

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substandard septic tanks for their waste disposal.”32 In addition, Congress 

has elsewhere defined colonias as “based on objective criteria, including 

lack of potable water supply, lack of adequate sewage systems, and lack of 

decent, safe, and sanitary housing.”33 Nonetheless, the Corps has never 

developed a definition, an interpretation, or guidance for staff to use in 

determining whether an assistance recipient is a colonia eligible for the 

program. Although the Corps recognizes that the colonias section 219 

project is essentially a programmatic authority, nonetheless, Corps 

officials stated the program was too small for the agency to develop 

guidance. The Corps claimed to independently verify in letter reports, 

which are brief project reports that the Corps prepares before providing 

assistance to an entity, that the assistance it provides under this provision 

is going to colonias; however, the Corps acknowledged that it does not 

have criteria for identifying eligible colonias. Thus, while these letter 

reports describe the areas, it is unclear by what basis the Corps has 

verified they are colonias as meant in the authorizing statute.34 As a result, 

the Corps cannot ensure that its assistance is going to colonias. 

 

32138 Cong. Rec. H9239 (daily ed. Sept. 23, 1992) (statement of Mr. Laughlin, offering 

colonias amendment on predecessor bill to WRDA 1992). See also id. at H9240 (statement 

of Mr. Coleman describing “these communities, in which people live without running water 

or safe sewage disposal . . . . In the colonias, residents live with the ever present threat of 

cholera—a Third World disease that menaces only where people live, in the most 

unsanitary conditions. This disease threatens because many of the people must draw their 

water from wells that are dangerously close to substandard septic systems and, therefore, 

contaminated with human waste.”). 

33Cranston-Gonzalez National Affordable Housing Act, Pub. L. No. 101-625, § 916(e)(1) 

(November 28, 1990), 42 USC § 5306 note (2009). 

34Moreover, the Corps’ field personnel initially told us that they rely on a state agency to 

determine which projects should receive assistance. While the Corps asserted it has 

flexibility in determining whether a community is an eligible colonia, it cannot reasonably 

make a determination without any criteria at all. 

Page 51 GAO-10-126 Rural Water Infrastructure
Page 52 GAO-10-126 

State County 

Rural-urban continuum code 

USDA Water and 

Environmental 

Program grants

USDA Water 

and 

Environmental 

Program loans

EPA U.S.-

Mexico Border 

Water 

Infrastructure 

Program and 

CWTAP

Congressionally 

directed in EPA 

STAG account HUD CDBG Corps E

AZ Cochise Urban (4) $5,983,185 $6,924,160 $15,246,570 0 $707,968 0 AZ Gila Urban (4) 540,190 0 0 748,400 480,335 0 AZ Graham Rural (6) 2,208,290 1,195,000 0 6,768,447 173,340 0 AZ Greenlee Rural (7) 555,150 $75,000 0 0 943,034 0 AZ La Paz Rural (6) 8,665,890 5,880,110 0 0 0 0 1,400,AZ Maricopa Urban (1) 1,969,649 742,000 0 3,265,300 3,889,833 0 AZ Mohave Urban (4) 2,165,900 2,964,000 0 1,433,600 1,855,922 0 AZ Pima Urban (2) 8,536,740 4,280,000 68,691 2,494,700 3,379,667 0 AZ Pinal Urban (1) 12,736,276 6,632,605 0 0 1,305,186 0 AZ Santa Cruz Urban (4) 280,720 881,000 61,451,177 2,993,554 365,813 0 AZ Yavapai Urban (3) 5,895,470 5,649,479 0 0 733,750 0 AZ Yuma Urban (3) 7,285,064 7,018,340 7,359,501 0 953,514 0 CA Imperial Urban (3) 11,774,134 11,540,700 2,592,244 0 5,170,391 0 1,446,CA Los Angeles Urban (1) 0 446,500 0 0 Not Collected 0 CA Orange Urban (1) 0 0 0 0 Not Collected 0 CA Riverside Urban (1) 8,150,985 15,219,000 37,786 2,083,149 1,928,333 0 8,931,CA San 

Bernardino 

Urban (1) 4,772,902 4,148,334 0 12,342,667 1,928,333 0 7,125,

CA San Diego Urban (1) 7,716,441 1,700,000 0 12,735,333 425,354 0 NM Catron Rural (9) 5,377,046 49,600 0 0 1,031,634 0 NM Chaves Urban (5) 0 0 0 0 1,798,773 0 NM Dona Ana Urban (3) 31,428,830 6,882,900 21,859,544 2,890,100 1,747,693 130,494 850,NM Eddy Urban (5) 6,566,721 1,437,700 0 0 2,564,698 0 NM Grant Rural (7) 15,939,245 815,000 0 2,373,600 1,474,258 0 NM Hidalgo Rural (7) 4,866,148 104,000 725,700 96,200 1,206,225 0 NM Lea Urban (5) 0 0 0 1,425,350 5,844,378 2,420,180 1,450,NM Lincoln Rural (7) 1,931,747 1,142,236 0 2,321,100 3,955,304 0 NM Luna Rural (6) 3,392,153 0 264,133 0 0 920,284 1,250,

Appendix III: Total Obligations and Rural-Urban Categories for Water and Wastewater Projects in the Border Region, Fiscal Years 2000-2008, by County 

 Rural Water 

Appendix III: Total Obligations and Rural-Urban Cfor Water and Wastewater Projects in the Border Fiscal Years 2000-2008, by County 
Appendix III: Total Obligations and Rural-Urban Categories for 

Water and Wastewater Projects in the Border Region, Fiscal Years 2000-2008, by County 

Page 53 GAO-10-126 Rural Water 

State County 

Rural-urban continuum code 

USDA Water and 

Environmental 

Program grants

USDA Water 

and 

Environmental 

Program loans

EPA U.S.-

Mexico Border 

Water 

Infrastructure 

Program and 

CWTAP

Congressionally 

directed in EPA 

STAG account HUD CDBG Corps E

NM Otero Urban (4) 13,170,826 1,213,919 0 867,300 529,540 0 NM Sierra Rural (6) 2,931,000 1,624,500 0 433,600 257,005 0 NM Socorro Rural (6) 843,976 786,000 0 0 2,136,110 0 TX Aransas Urban (2) 0 0 0 0 2,586,745 0 TX Atascosa Urban (1) 1,306,000 3,016,100 0 0 3,985,421 0 TX Bandera Urban (1) 0 0 0 0 1,329,271 0 TX Bee Urban (4) 509,250 0 0 0 3,592,705 0 TX Bexar Urban (1) 0 0 0 3,613,700 3,568,927 0 1,800,TX Brewster Rural (7) 1,640,635 0 1,754,889 0 0 0 TX Brooks Rural (6) 0 3,052,000 0 0 3,907,467 0 794,TX Cameron Urban (2) 16,644,239 30,093,600 68,330,278 0 12,164,874 98,764 1,420,TX Concho Rural (8) 0 0 0 0 820,544 0 TX Crane Rural (6) 0 0 0 0 1,158,659 0 TX Crockett Rural (7) 0 0 0 0 461,390 0 TX Culberson Rural (9) 0 0 0 0 556,980 0 TX Dimmit Rural (6) 0 0 2,077,594 0 3,346,826 0 TX Duval Rural (7) 10,260,180 6,232,000 0 0 2,091,180 0 TX Ector Urban (3) 4,920,400 3,247,200 0 0 3,692,292 0 TX Edwards Rural (9) 0 0 0 0 1,190,607 0 TX El Paso Urban (2) 3,209,146 9,608,000 58,737,820 433,500 6,236,201 0 TX Frio Rural (6) 1,971,000 2,690,000 9,683,274 0 2,156,605 0 TX Gillespie Rural (7) 0 0 0 0 0 0 TX Glasscock Rural (8) 0 0 0 0 350,000 0 TX Goliad Urban (3) 1,597,600 200,000 0 0 1,500,000 0 TX Hidalgo Urban (2) 14,128,824 8,152,300 50,948,407 625,500 18,082,498 0 5,716,TX Hudspeth Rural (8) 346,140 1,012,000 0 0 2,552,032 0 TX Irion Urban (3) 0 0 0 0 529,989 0 TX Jeff Davis Rural (9) 1,704,957 100,000 0 0 1,963,440 0 TX Jim Hogg Rural (6) 7,394,514 4,031,000 0 0 190,237 0 TX Jim Wells Urban (4) 2,228,633 4,256,000 0 0 4,580,165 0 TX Karnes Rural (6) 1,439,000 3,361,000 0 0 7,870,180 0 TX Kendall Urban (1) 0 0 0 0 779,750 0 TX Kenedy Rural (9) 0 0 0 0 585,511 0 
Appendix III: Total Obligations and Rural-Urban Categories for 

Water and Wastewater Projects in the Border Region, Fiscal Years 2000-2008, by County 

Page 54 GAO-10-126 Rural Water 

State County 

Rural-urban continuum code 

USDA Water and 

Environmental 

Program grants

USDA Water 

and 

Environmental 

Program loans

EPA U.S.-

Mexico Border 

Water 

Infrastructure 

Program and 

CWTAP

Congressionally 

directed in EPA 

STAG account HUD CDBG Corps E

TX Kerr Urban (4) 3,162,772 0 0 0 2,761,853 0 TX Kimble Rural (7) 0 0 0 0 374,999 0 TX Kinney Rural (9) 0 0 0 0 633,433 0 TX Kleberg Urban (4) 628,000 1,969,000 0 0 976,100 0 TX La Salle Rural (6) 3,313,483 789,000 0 0 621,747 0 1,250,TX Live Oak Rural (6) 3,172,500 5,619,000 0 0 2,779,600 0 TX Loving Rural (9) 0 0 0 0 500,000 0 TX Mason Rural (9) 0 0 0 0 1,165,000 0 TX Maverick Urban (5) 7,147,448 0 63,115,228 867,300 3,797,817 0 TX McMullen Rural (8) 0 0 0 0 1,117,508 0 TX Medina Urban (1) 0 975,000 0 0 5,767,224 0 TX Menard Rural (8) 599,000 1,361,000 0 0 704,997 0 TX Midland Urban (3) 0 0 0 0 0 0 TX Nueces Urban (2) 1,702,500 1,926,000 0 0 2,982,075 $97,073 1,500,TX Pecos Rural (7) 1,037,000 553,000 228,186 0 3,049,994 0 800,TX Presidio Rural (7) 5,477,587 3,704,000 120,713 0 1,264,784 0 TX Reagan Rural (6) 0 0 0 0 258,809 0 TX Real Rural (9) 0 0 0 0 1,136,131 0 TX Reeves Rural (7) 188,200 62,800 0 0 2,895,920 0 TX Refugio Rural (6) 1,864,500 1,936,000 0 0 3,715,568 0 TX San Patricio Urban (2) 4,248,135 961,000 0 0 7,392,019 0 1,643,TX Schleicher Rural (8) 0 0 0 0 799,157 0 TX Starr Urban (4) 12,468,723 12,065,500 17,830,708 0 7,704,128 0 1,500,TX Sterling Rural (8) 0 0 0 0 324,030 0 TX Sutton Rural (7) 0 0 0 0 349,998 0 TX Terrell Rural (9) 0 0 372,943 0 0 0 TX Tom Green Urban (3) 1,179,000 521,000 0 0 1,248,508 0 TX Upton Rural (8) 0 0 0 0 643,536 0 TX Uvalde Rural (7) 520,580 2,899,000 0 0 571,817 0 TX Val Verde Urban (5) 342,724 0 17,229,341 0 0 0 TX Ward Rural (6) 2,773 0 0 0 2,469,131 0 TX Webb Urban (3) 2,968,170 315,000 39,099,609 0 3,222,721 419,667 TX Willacy Rural (6) 1,548,775 361,000 4,770,396 0 4,043,270 0 
Appendix III: Total Obligations and Rural-Urban Categories for 

Water and Wastewater Projects in the Border Region, Fiscal Years 2000-2008, by County 

Page 55 GAO-10-126 Rural Water 

State County 

Rural-urban continuum code 

USDA Water and 

Environmental 

Program grants

USDA Water 

and 

Environmental 

Program loans

EPA U.S.-

Mexico Border 

Water 

Infrastructure 

Program and 

CWTAP

Congressionally 

directed in EPA 

STAG account HUD CDBG Corps E

TX Wilson Urban (1) 0 155,000 0 0 2,658,948 0 TX Winkler Rural (6) 0 0 0 0 1,202,179 0 TX Zapata Rural (6) 1,258,138 0 6,998,141 0 4,028,271 0 TX Zavala Rural (7) 2,286,762 4,342,000 0 0 3,723,436 0 Total: $300,101,965 $208,917,583 $450,902,873 $60,812,400 $213983946 $4,086,462 $38,877,

Source: GAO analysis of USDA, EPA, HUD, Corps, EDA, and Reclamation data Note: We did not collect data from the HUD entitlement counties of Los Angeles, California and Orange, California. These counties are considered by HU

do not include the $925,000 authorized through a congressional directive. Rural-Urban continuum codes with category definitions: (1) County in metro area with 1 million population or more (2) County in metro area of 250,000 to 1 million population (3) County in metro area of fewer than 250,000 population (4) Nonmetro county with urban population of 20,000 or more, adjacent to a metro area (5) Nonmetro county with urban population of 20,000 or more, not adjacent to a metro area (6) Nonmetro county with urban population of 2,500-19,999, adjacent to metro area (7) Nonmetro county with urban population of 2,500-19,999, not adjacent to metro area (8) Nonmetro county completely rural or less than 2,500 urban population, adjacent to metro area (9) Nonmetro county completely rural or less than 2,500 urban population, not adjacent to metro area 
A

Water and 

R

ppendix IV: Total USDA Obligations for 

Wastewater Projects in the Border 

egion, Fiscal Years 2000-2008, by County

Page 56 GAO-10-126 

Appendix IV: Total USDA Obligations for 

Water and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 

The following figure displays the ranges of USDA funding obligated to 

counties in the border region for water and wastewater projects. 

Figure 4: Federal Funding Obligated from USDA 

 Rural Water Infrastructure 
Appendix V: Total EPA Obligations and RuralUrban Categories for Water and Wastewater 

Projects in the Border Region, Fiscal Years 

2000-2008, by County 

The following figure displays the ranges of EPA funding obligated to 

counties in the border region for water and wastewater projects. 

Figure 5: Federal Funding Obligated from EPA 

Appendix V: Total EPA Obligations and RuralUrban Categories for Water and Wastewater 

Projects in the Border Region, Fiscal Years 2000-

2008, by County 

Note: Figure does not include funding provided by the Clean Water and Drinking Water State 

Revolving Funds or EPA’s tribal programs. As several tribal nations cross county boundaries, we 

could not include it in the analysis conducted for this figure. Tribal data are presented in detail in 

appendix VIII. 

Page 57 GAO-10-126 Rural Water Infrastructure
Appendix VI: Total Obligations from Clean 

Water and Drinking Water State Revolving 

Funds and Rural-Urban Categories for Water 

and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 

Rural Water Infrastructure

State County 

Rural-urban 

continuum code1

Clean Water State 

Revolving Fund Program

Drinking Water State 

Revolving Fund Program Total

AZ Cochise Urban (4) $21,133,687 $3,001,936 $24,135,622

AZ Gila Urban (4) 0 5,120,000 5,120,000

AZ Graham Rural (6) 15,695,000 7,723,380 23,418,380

AZ Greenlee Rural (7) 145,331,926 2,200,000 147,531,926

AZ La Paz Rural (6) 247,938,323 0 247,938,323

AZ Maricopa Urban (1) 0 193,048,850 193,048,850

AZ Mohave Urban (4) 133,120,141 9,640,758 142,760,899

AZ Pima Urban (2) 27,344,476 98,091,704 125,436,180

AZ Pinal Urban (1) 375,000 203,195 578,195

AZ Santa Cruz Urban (4) 0 0 0

AZ Yavapai Urban (3) 32,852,760 11,131,869 43,984,629

AZ Yuma Urban (3) 53,339,310 46,714,395 100,053,705

CA Imperial Urban (3) 0 22,081,858 22,081,858

CA Los Angeles Urban (1) 818,592,156 0 818,592,156

CA Orange Urban (1) 236,224,971 22,905,222 259,130,193

CA Riverside Urban (1) 69,615,907 54,649,148 124,265,055

CA San Bernardino Urban (1) 107,938,488 8,200,261 116,138,749

CA San Diego Urban (1) 231,744,069 23,573,374 255,317,443

NM Catron Rural (9) 0 0 0

NM Chaves Urban (5) 0 0 0

NM Dona Ana Urban (3) 5,400,000 7,070,000 12,470,000

NM Eddy Urban (5) 0 875,304 875,304

NM Grant Rural (7) 2,000,000 808,000 2,808,000

NM Hidalgo Rural (7) 0 0 0

NM Lea Urban (5) 40,500,000 8,761,750 49,261,750

NM Lincoln Rural (7) 600,000 4,210,206 4,810,206

NM Luna Rural (6) 0 222,309 222,309

NM Otero Urban (4) 0 6,565,000 6,565,000

NM Sierra Rural (6) 0 1,841,089 1,841,089

NM Socorro Rural (6) 0 0 0

TX Aransas Urban (2) 0 0 0

TX Atascosa Urban (1) 0 0 0

TX Bandera Urban (1) 0 0 0

TX Bee Urban (4) 0 0 0

TX Bexar Urban (1) 246,440,000 0 246,440,000

Appendix VI: Total Obligations from Clean Water and 

Drinking Water State Revolving Funds and Rural-Urban 

Categories for Water and Wastewater Projects in the 

Border Region, Fiscal Years 2000-2008, by County 

Page 58 GAO-10-126 
Appendix VI: Total Obligations from Clean 

Water and Drinking Water State Revolving 

Funds and Rural-Urban Categories for Water 

and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 

Rural-urban 

de1

Clean Water State 

Revolving Fu

Drinking Water State 

State County continuum co nd Program Revolving Fund Program Total

TX Brewster Rural (7) 0 4,860,000 4,860,000

TX Brooks Rural (6) 0 0 0

TX Cameron Urban (2) 4,975,000 5,730,000 10,705,000

TX Concho Rural (8) 144,285 0 144,285

TX Crane Rural (6) 0 0 0

TX Crockett Rural (7) 0 0 0

TX Culberson Rural (9) 0 0 0

TX Dimmit Rural (6) 0 0 0

TX Duval Rural (7) 0 0 0

TX Ector Urban (3) 0 0 0

TX Edwards Rural (9) 0 0 0

TX El Paso Urban (2) 104,105,000 10,845,000 114,950,000

TX Frio Rural (6) 37,510,000 145,000 37,655,000

TX Gillespie Rural (7) 0 0 0

TX Glasscock Rural (8) 0 0 0

TX Goliad Urban (3) 0 0 0

TX Hidalgo Urban (2) 64,395,000 23,612,000 88,007,000

TX Hudspeth Rural (8) 0 0 0

TX Irion Urban (3) 0 0 0

TX Jeff Davis Rural (9) 0 0 0

TX Jim Hogg Rural (6) 0 0 0

TX Jim Wells Urban (4) 0 0 0

TX Karnes Rural (6) 0 3,600,000 3,600,000

TX Kendall Urban (1) 2,500,000 0 2,500,000

TX Kenedy Rural (9) 0 0 0

TX Kerr Urban (4) 0 0 0

TX Kimble Rural (7) 0 3,480,000 3,480,000

TX Kinney Rural (9) 0 0 0

TX Kleberg Urban (4) 0 0 0

TX La Salle Rural (6) 0 0 0

TX Live Oak Rural (6) 0 0 0

TX Loving Rural (9) 0 0 0

TX Mason Rural (9) 0 0 0

TX Maverick Urban (5) 17,340,000 38,110,00 55,450,00 0 0

TX McMullen Rural (8) 0 0 0

TX Medina Urban (1) 0 0 0

TX Menard Rural (8) 0 0 0

Page 59 GAO-10-126 Rural Water Infrastructure
Appendix VI: Total Obligations from Clean 

Water and Drinking Water State Revolving 

Funds and Rural-Urban Categories for Water 

and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by County 

State County 

Rural-urban 

continuum code1

Clean Water State 

Revolving Fund Program

Drinking Water State 

Revolving Fund Program Total

TX Midland Urban (3) 0 0 0

TX Nueces Urban (2) 0 0 0

TX Pecos Rural (7) 0 0 0

TX Presidio Rural (7) 1,265,000 0 1,265,000

TX Reagan Rural (6) 0 0 0

TX Real Rural (9) 0 0 0

TX Reeves Rural (7) 6,870,000 8,375,00 15,245,00 0 0

TX Refugio Rural (6) 0 525,000 525,000

TX San Patricio Urban (2) 7,745,000 0 7,745,000

TX Schleicher Rural (8) 0 0 0

TX Starr Urban (4) 2,885,000 20,900,00 23,785,00 0 0

TX Sterling Rural (8) 0 0 0

TX Sutton Rural (7) 6,000,000 3,000,000 9,000,000

TX Terrell Rural (9) 0 0 0

TX Tom Green Urban (3) 0 0 0

TX Upton Rural (8) 0 0 0

TX Uvalde Rural (7) 4,000,000 0 4,000,000

TX Val Verde Urban (5) 2,190,000 18,008,00 20,198,00 0 0

TX Ward Rural (6) 0 0 0

TX Webb Urban (3) 0 0 0

TX Willacy Rural (6) 0 3,245,00 3,245,00 0 0

TX Wilson Urban (1) 0 0 0

TX Winkler Rural (6) 4,595,000 0 4,595,000

TX Zapata Rural (6) 6,415,000 14,826,00 2 0 1,241,000

TX Zavala Rural (7) 0 0 0

Total $2,709,120,499 $697,900,60 $3,407,021,10 7 6

Source: GAO analysis of Arizona, California, New Mexi and Texas Clean Water and Drin Revolving 

data. 

1

Rural-urban continuum codes with catego

(1) County in metro area with 1 million population or more 

(2) County in metro area of 250,000 to 1 million population 

(3) County in metro area of fewer than 250,000 population 

(4) Nonmetro county with urban population of 20,000 or more, adjacent to a metro area 

(5) Nonmetro county with urban population of 20,000 or more, not adjacent to a metro area 

(6) Nonmetro county with urba f 2,500-19,999, adjace

(7) Nonmetro county with urban population of 2,500-19,999, not adjacent to me area 

(8) Nonmetro county completely rural or less than 2,500 urban population, adjacent to metro area 

(9) Nonmetro county completely rural or less than 2,500 urban population, not adjacent to metro area

co, king Water State Fund program 

ry definitions: 

n population o nt to metro area 

tro

Page 60 GAO-10-126 Rural Water Infrastructure
Appendix VII: Total HUD Obligations and 

Rural-Urban Categories for Water and 

Wastewater Projects in the Border Region, 

Fiscal Years 2000-2008, by County 

Page 61 GAO-10-126 Rural Water Infrastructure 

The following figure displays the ranges of HUD funding obligated to 

counties in the border region for water and wastewater projects. 

Figure 6: Federal Funding Obligated from HUD 

Appendix VII: Total HUD Obligations and RuralUrban Categories for Water and Wastewater 

Projects in the Border Region, Fiscal Years 2000-

2008, by County 
Appendix VIII: Total Obligations for Water 

and Wastewater Projects in the Border

Region, Fiscal Years 2000-2008, by Tribal 

Nation 

Page 62 GAO-10-126 Rural Water Infrastructure

Tribe 

Construction 

Program 

Border 

Infrastru

IHS Sanitation 

Facilities EPA Tribal 

cture

EPA Drinking 

Water Tribal 

Set-aside

EPA Clean 

Water Indian 

Set-aside

HUD 

Indian 

CDBG USDA Tribe total

Agua Caliente Band of 

Cahuilla Indians, 

$1,030,600 0 0 0 0 0 $1,030,600

California 

Ak Chin Indian 

Community, Arizona 

880,000 0 0 109,500 0 0 989,500

Augustine Band of 

Cahuilla Indians, 

California 

0 0 0 0 0 0 0

Cabazon Band of 

Mission Indians, 

California 

0 0 0 0 0 0 0

Cahuilla Band of 

Mission Indians, 

California 

0 0 0 0 0 0 0

Campo Band of 

Diegueno Mission 

Indians, California 

170,377 491,000 0 0 0 0 661,377

Capitan Grande Band 

of Diegueno Mission 

Indians of California: 

0 0 0 0 0 0 0

Chemehuevi Indian 

Tribe, California 

1,506,990 502,474 763,815 1,000,000 3,773,279

Cocopah Tribe of 

Arizona 

220,000 170,300 1,058,000 1,448,300

Colorado River Indian 

Tribe, Arizona and 

California 

689,880 0 505,100 4,746,800 0 0 5,941,780

Ewiiaapaayp Band of 

Kumeyaay Indians, 

California 

0 0 0 0 0 0 0

Fort McDowell 

Yavapai Nation, 

Arizona 

760,000 0 0 0 0 0 760,000

Fort Mojave Indian 

Tribe of Arizona and 

California 

434,100 0 0 686,900 0 0 921,000

Gila River Indian 

Community, Arizona 

5,307,700 0 1,855,000 6,754,100 0 0 13,916,800

Iiapay Nation of Santa 

Ysabel, California 

1,346,781 1,227,900 0 0 0 0 2,574,681

Appendix VIII: Total Obligations for Water and 

Wastewater Projects in the Border Region, 

Fiscal Years 2000-2008, by Tribal Nation 
Appendix VIII: Total Obligations for Water 

and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by Tribal 

Nation 

Tribe 

IHS Sanitation 

EPA Tribal 

Inf

EPA Drinking EPA Clean 

Water Indian 

HUD 

Indian

Tribe total

Facilities 

Construction 

Program 

Border 

rastructure

Water Tribal 

Set-aside Set-aside CDBG USDA

Inaja Band of 

Diegueno Mission 

Indians, California 

0 0 0 0 0 0 0

Jamul Indian Village of 0 0 0 0 0 0 0

California 

Kickapoo Traditional 

Tribe of Texas 

233,000 0 40,000 0 0 0 273,000

La Jolla Band of 

Luiseno Mission 

Indians, California 

160,000 2,407,99 559, 9 000 0 0 0 3,126,999

La Posta Band of

Diegueno Mission 

0 0 0 0 0 0 0

Indians, California 

Los Coyotes Band

Cahuilla and Cupe

 of 

no 

244,500 0 244,50

Indians, California 

0 0 0 0 0

Manzanita Band of 

Diegueno Mission 

Indians, California 

0 217,127 0 0 0 0 217,127

Mesa Grande Band of 

Diegueno Mission 

Indians, California 

47,600 760,00 518,00 0 0 0 0 0 1,325,600

Mescalero Apache 2,334,000 0 1,100,000 823,500 0 0 4,257,500

Tribe, New Mexico 

Morongo Band of 

Mission Indians, 

California 

0 0 0 0 0 0 0

Pala Band of Luiseno 0 3,022,440 0 0 0 0 3,022,440

Mission Indians, 

California 

Pascua Yaqui Tribe of 

Arizona 

982,000 0 0 109,500 0 0 1,091,500

Pauma Band of 

Luiseno Mission 

0 60,000 0 0 0 0 60,000

Indians, California 

Pechanga Band of 

Luiseno Mission 

Indians, California 

0 $278,621 0 0 0 0 278,621

Quechan Tribe, 

California and Arizona 

2,180,000 1,729,300 550,000 115,000 0 0 4,574,300

Ramona Band or 

Village of Cahuilla 

Mission Indians of 

California 

0 0 0 0 0 0 0

Page 63 GAO-10-126 Rural Water Infrastructure
Appendix VIII: Total Obligations for Water 

and Wastewater Projects in the Border 

Region, Fiscal Years 2000-2008, by Tribal 

Nation 

Tribe 

IHS Sanitation 

Facilities 

Construction 

Program 

EPA Tribal 

Border 

Infrastructure

EPA Drinking 

Water Tribal 

Set-aside

EPA Clean 

Water Indian 

Set-aside

HUD 

Indian 

CDBG USDA Tribe total

Rincon Band o

Luiseno Mission 

Indians, California 

f 140,000 1,785,000 0 0 0 0 1,925,000

Salt River PimaMaricopa Indian 2,645,00 559,99 2,943,20 2,000,00 9,938,99

Community, Arizona 

0 0 2 0 0 0 2

San Carlos Apache 10,337,500 0 50,000 1,790,800 0 0 12,178,300

Tribe, Arizona 

San Manuel Band

Mission Indians, 

 of 0 0 0 0 0 0 0

California 

San Pasqual Band 

Diegueno Mission 

of 161,732 1,047,515 0 0 605,000 0 1,814,247

Indians of California 

Santa Rosa Band of 

Cahuilla Indians, 

California 

0 0 484,000 0 0 0 484,000

Soboba Band of 

Luiseno Indians, 

California 

0 0 0 0 0 0 0

Sycuan Band of the

Kumeyaay Nation 

176,000 55,400 0 0 0 0 231,400

Tohono O’odham 

Nation of Arizona 

13,163,776 4,796,032 3,018,732 6,286,097 0 0 27,264,637

Torres Martinez 

Desert Cahuilla 

Indians, California 

0 1,424,46 545,79 9 0 0 0 0 1,970,259

Twenty-Nine Palms 

Band of Mission 

Indians of California 

0 0 0 0 0 0 0

Viejas (Baron Long) 

Group of Capitan 

500,00

Grande Band of 

Mission Indians, 

California 

0 0 0 0 0 0 500,000

Ysleta Del Sur Pueb

of Texas 

lo 0 0 0 0 0 0 0

Total $45,151,536 $19,973,103 $11,346,088 $25,129,212 $2,605,000 $1,000,000 $106,795,739

Sou is of IHS, E d HUD d

Note: Additional USDA funds were provided to tribal nations through USDA’s colonia program. These 

funds are no presented in thi able. 

rce: GAO analys PA, USDA, an ata. 

t re s t

Page 64 GAO-10-126 Rural Water Infrastructure
Appendix IX: Comments from the Department Appendix IX: Comments from the of Agriculture 

Department of Agriculture 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

Page 65 GAO-10-126 Rural Water Infrastructure 
Appendix IX: Comments from the Department 

of Agriculture 

Page 66 GAO-10-126 Rural Water Infrastructure
Appendix IX: Comments from the Department 

of Agriculture 

See comment 1. 

Page 67 GAO-10-126 Rural Water Infrastructure
Appendix IX: Comments from the Department 

of Agriculture 

See comment 3. 

See comment 4. 

See comment 2. 

Page 68 GAO-10-126 Rural Water Infrastructure
Appendix IX: Comments from the Department 

of Agriculture 

Page 69 GAO-10-126 

See comment 4. 

 Rural Water Infrastructure 
Appendix IX: Comments from the Department 

of Agriculture 

The following are GAO’s comments to the Department of Agriculture’s 

letter dated December 8, 2009. 

1. We agree with USDA that local knowledge of local needs is an 

important element that can help federal agencies identify the water and 

wastewater needs of the border region. However, while local officials 

can play a key role and assist federal agencies, without a 

comprehensive assessment of needs of the regions federal agencies will 

continue to lack necessary information on the magnitude of the 

problem and will not have the information they need to prioritize 

assistance and target limited federal resources. We made no 

modifications to the report in response to this comment. 

2. We disagree with USDA’s characterization of the examples cited in our 

report. Throughout the review we contacted various officials in the 

border region—including local, state, and tribal officials; engineers and 

other consultants; nonprofit representatives; water and wastewater 

utility representatives; and residents—and these officials provided us 

with numerous examples of the types of concerns they have 

experienced as a result of ineffective coordination among federal 

agencies. The examples cited in the report were not intended to be 

inclusive of all of the instances shared with us by officials and instead 

were only used to provide more specifics of certain types of concerns 

expressed by the officials we spoke with. We have not modified the 

report in response to this comment. 

3. We believe the report accurately reflects that USDA provides funds to 

eligible entities, rather than directly to colonias. We have not modified 

the report in response to this comment. 

4. We disagree with USDA’s comment that it is providing Section 306C 

colonia funds in compliance with the existing statutory requirements. 

Specifically, we disagree with the agency’s comment that preference 

can be provided to entities proposing to serve a colonia, regardless of 

whether the area meets the characteristics outlined in the statute. As 

stated in the report, we believe that USDA’s current practice of 

awarding preference to applications without independent verification 

that the colonia meets all statutory requirements fails to ensure 

compliance with statutory requirements. In addition, while USDA 

states that the definition of adequate is determined through 

compliance with the Safe Drinking Water Act or Clean Water Act, it 

was unable to provide evidence that this interpretation has ever been 

formally communicated to staff in guidance or other direction. Without 

GAO Comments 

Page 70 GAO-10-126 Rural Water Infrastructure 
Appendix IX: Comments from the Department 

of Agriculture 

guidance explaining USDA’s interpretation of this term, as well as w

support is required, we beli

hat 

eve that this threshold requirement is open 

to interpretation by USDA field offices. We made no changes to the 

report in response to this comment. 

Page 71 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department Appendix X: Comments from the Department of Housing and Urban Development 

of Housing and Urban Development 

See comment 1. 

Now on pages 25-26 and 

44-45. 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

 Page 72 GAO-10-126 Rural Water Infrastructure 
Appendix X: Comments from the Department 

of Housing and Urban Development 

See comment 2. 

Now on pages 24-25 

and 48. 

 Page 73 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

Now on pages 44-45. 

See comment 4. 

ges 28-29 and 

48. 

See comment 3. 

Now on pa

 Page 74 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

Now footnote 17 on 

page 13. 

 on pages 14-15. 

See comment 6. 

See comment 5. 

Now on pages 44-45. 

Now

Now on page 36. 

See comment 7. 

 Page 75 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

Now on page 22. 

See comment 9. 

See comment 8. 

Now on pages 44-45. 

 Page 76 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

 Page 77 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

Page 78 GAO-10-126 Rural Water Infrastructure

The following are GAO’s comments to the Department of Housing and 

Urban Development’s letter dated December 10, 2009. 

1. We disagree with HUD’s granting of “maximum feasible deference” to 

the states in the interpretation of statutory requirements related to the 

colonia set-aside. As stated in our report, we do not believe the 

maximum feasible deference regulation—which does not appear in 

statute—applies to the colonia set-aside program. This is because the 

regulation itself does not refer to the codified law concerning the 

CDBG program, but only to the Housing and Community Development 

Act (HCDA). In its comments, HUD cites section 916(d) of the 

Cranston-Gonzalez National Affordable Housing Act of 1990 (NAHA), 

which is the statute that established the colonia set-aside program, to 

support its position that the agency’s regulations pursuant to Title I of 

the HCDA also apply to the colonia set-aside program. However, the 

relevant passage cited by HUD only subjects the colonia set-aside 

program to the provisions of Title I of the Act to the extent consistent 

with NAHA, and applying them in this context is inconsistent. We did 

not revise our report in response to this comment. 

2. We continue to believe that HUD does not have a process to ensure 

that Colonia Set-aside funds are limited to those activities authorized 

by statute. HUD has not provided guidance to states on this topic and 

we disagree with HUD’s interpretation of the law with respect to 

allowed set-aside activities. We believe that HUD’s interpretation does 

not give full recognition to all sections of the law and that HUD is 

neglecting the overall requirement for Colonia Set-aside funds to be 

limited to activities related to water, sewage, and housing. We believe 

the logical interpretation of the law is that funds are to be used for 

various activities—e.g., planning, construction, etc.—relating to water, 

sewage, and housing. HUD notes that when Congress amended the 

relevant section to incorporate by reference another section which 

lists the types of activities allowed under CDBG, that one proposed 

amendment would have expressly limited activities to those related to 

public water and sewage. HUD also stated that because the enacted 

law featured a different version of this provision that did not contain 

the express language, the limitation should be understood as having 

been rejected. However, the history supports another conclusion—that 

because the limitation already existed in the law, the water and sewage 

language in the failed amendment was simply not needed. Thus, we 

believe that the Senate committee clearly articulated that the new 

activities were to be those that “specifically” or “especially” related to 

GAO Comments 
Appendix X: Comments from the Department 

of Housing and Urban Development 

water, sewage, and housing. We did not make any change to our rep

in response to HUD’s further explanation. 

ort 

. Our report recognizes that HUD has stated its intent to issue guidance 

r 

n, 

UD 

cy, and is not 

onsidered to be an official interpretation of the statute. We continue 

nd 

3

to assist states to more clearly articulate the priorities in developing 

their method of distribution. However, during the course of the 

engagement, we asked HUD for a draft version of the guidance o

other documentation so that we could review the contents of the 

guidance and assess whether it would adequately address our 

concerns. Because HUD did not provide us with any documentatio

we have made no modifications to the report in response to this 

comment. 

4. We disagree with HUD’s characterization of our discussion regarding 

the interpretation of the colonia definition. As stated in our report, 

HUD has failed to provide guidance on the interpretation of colonia. 

During our review, the only documented definition we found that H

issued in relation to the Colonia Set-aside is in a HUD Office of 

Community Planning and Development Notice, which as HUD 

indicates in its response, is not followed by the agen

c

to believe that to ensure compliance with statutory guidance; HUD 

should undertake a review of the statute and issue clear guidance to 

states concerning its interpretation of the definition. We did not revise

the report in response to this comment. 

5. During our review, we conducted interviews with numerous state a

local officials throughout the border region—including officials 

representing the state agencies that administer HUD’s CDBG funds. 

However, our review focused on the federal efforts to meet needs in

the U.S.-Mexico border region and not the state efforts. We made no 

changes in response to this comment. 

6. We have modified the report and clarified that the total funding HUD

obligated (about $218 million) is a combination of CDBG funds (about 

$214 million), Indian CDBG funds (about $3 million), and funds 

provided through the Economic Development Initiative Special 

Account (about $1 million). 

7. Our report already recognizes the changes HUD intends to make to its 

data system. However, we have added an additional statement to our

discussion that the change will allow HUD to verify that all projects

funded with Colonia Set-aside funds are located within a colonia. 

Page 79 GAO-10-126 Rural Water Infrastructure
Appendix X: Comments from the Department 

of Housing and Urban Development 

8. We disagree with HUD’s characterization that our report suggests that 

HUD still requires the states to formally designate colonias, or that 

HUD should be the party to designate colonias. Our report clearly 

that 

the 

tate 

ion is 

s as 

were formal designations, and HUD has not provided 

uidance concerning state implementation of the Colonia Set-aside as 

ort 

 funds 

ot 

n response to this comment. 

states that we believe that HUD should be conducting activities as 

necessary to ensure that the states’ use of funds is compliant with the

law. As stated in the report, soon after the enactment of the law 

established the Colonia Set-aside requirement, Congress amended 

law to remove a requirement that a colonia be designated by the s

or county, and as a result we recognize that no formal designat

required. Yet, in implementing the program, states are informally 

designating colonias, HUD is deferring to the state determination

though they 

g

to how eligible colonias are to be identified. We have made no 

revisions to the report in response to this comment. 

9. The report does not include any information that would indicate that 

the project in Hudspeth County, Texas has been closed. The rep

clearly states that HUD provided a utility over $860,000 in grant

from 2004 to 2006 to extend water distribution lines and waste 

collection lines for residents of a colonia; and that as of September 

2009, the distribution lines remain unused because the utility does n

have enough water to serve the additional households and the utility 

has not been able to obtain the funding needed to construct a new 

well. We made no changes to the report i

Page 80 GAO-10-126 Rural Water Infrastructure
Appendix XI: Comments from the U.S. Army Appendix XI: Comments from the U.S. Army Corps of Engineers 

Corps of Engineers 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment. 

 Page 81 GAO-10-126 Rural Water Infrastructure 
Appendix XI: Comments from the U.S. Army 

Corps of Engineers 

 Page 82 GAO-10-126 Rural Water Infrastructure
Appendix XI: Comments from the U.S. Army 

Corps of Engineers 

 Page 83 GAO-10-126 Rural Water Infrastructure
Appendix XI: Comments from the U.S. Army 

Corps of Engineers 

The following is GAO’s comment to the U.S. Army Corps of Engineer’s 

letter dated December 10, 2009. 

Our report recognized that the Corps had prepared letter reports, which 

are brief project reports that the Corps prepares before providing 

assistance to an entity, prior to undertaking each project. However, our 

report clearly states that the Corps does not have criteria for identifying 

eligible colonias. Therefore, while these letter reports are prepared, it is 

unclear by what basis the Corps has verified they are colonias as meant in 

the authorizing statute. We made no changes to the report in response to 

this comment. 

GAO Comment 

 Page 84 GAO-10-126 Rural Water Infrastructure
Appendix XII: GAO Contact and Staff 

Acknowledgments 

Page 85 GAO-10-12 e 

Appendix XII: GAO Contact and Staff 

6 Rural Water Infrastructur

Anu K. Mittal, (202) 512-3841, or mittala@gao.gov

Acknowledgments 

GAO Contact 

o the individual named above, Sherry L. McDonald, Assistant 

tions to 

In addition t Staff Director; Elizabeth Beardsley; Virginia Chanley; Bernice Dawson; Teague 

Lyons; Benjamin Shouse; and Jay Spaan made significant contribu

this report. 

Acknowledgments 

(361034) 
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