The Fair Housing Act, title VIII of the Civil Rights Act of 1968, prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin. The act allowed the Department of Housing and Urban Development (HUD) to investigate and conciliate complaints of housing discrimination and authorized the Department of Justice to file suits in cases of a pattern or practice of discrimination or in cases of public importance. HUD was not given any authority to administratively remedy acts of discrimination against an individual, however. The Fair Housing Act also required HUD to refer housing discrimination complaints to state and local agencies where the state or local law provided rights and remedies substantially equivalent to those provided by the federal law. In 1980, HUD established the Fair Housing Assistance Program to provide financial assistance to state and local agencies to encourage them to assume a greater share of the enforcement of their fair housing laws. The Fair Housing Initiatives Program (FHIP), administered by HUD, is designed to provide a coordinated and comprehensive approach to fair housing activities in order to strengthen enforcement of the Fair Housing Act. During the 1986 Senate hearings on its proposal to establish the FHIP, HUD testified that enforcement activity, particularly testing, by private nonprofit and other private entities would be the principal focus and motivation of the program. In February 1988, the program was created as a 2-year demonstration program by the Housing and Community Development Act of 1987. About 7 months later, the Fair Housing Amendments Act of 1988 was signed into law, and it became effective in March 1989. The 1988 act attempted to remedy the enforcement shortcomings of the original legislation. It significantly strengthened federal fair housing enforcement by, among other things, establishing an administrative enforcement mechanism, allowing HUD to pursue cases filed by an individual before an administrative law judge for disposition and providing for civil penalties. In November 1990, FHIP was extended for 2 additional years, and with the enactment of the Housing and Community Development Act of 1992, it became a permanent program, effective fiscal year 1993. The 1992 act also expanded the program to reflect significant legislative changes in fair housing and lending that had taken place after the program’s creation in 1988. It authorized FHIP to implement testing programs whenever there was a reasonable basis for doing so; establish new fair housing organizations or expand the capacity of existing ones; conduct special projects to, for example, respond to new or sophisticated forms of housing discrimination; undertake larger, long-term enforcement activities through multiyear funding agreements; and pay for litigation. For fiscal years 1989 through 1997, the Congress appropriated $113 million for FHIP. The permanent program grew from an appropriation of $10.6 million in fiscal year 1993 to $26 million in fiscal year 1995 (see fig. 1). Funds for the program are distributed on the basis of competitive grants through four program initiatives. These initiatives or funding categories generally define who is eligible to receive funds and/or the focus of activities to be funded. The initiatives are (1) the private enforcement initiative—funding for private nonprofit organizations to undertake testing and other enforcement-related activities; (2) the fair housing organizations initiative—funding for private nonprofit organizations to create new fair housing enforcement organizations in those areas of the country that were unserved or underserved by such organizations or expand the capacity of existing private nonprofit fair housing organizations; (3) the education and outreach initiative—funding for private and public entities to educate the general public and housing industry groups about fair housing rights and responsibilities; and (4) the administrative enforcement initiative—funding for state and local government agencies that administer fair housing laws certified by HUD as substantially equivalent to federal law to help such agencies broaden their range of enforcement and compliance activities. Private organizations that receive grants generally are nonprofit entities and have experience in investigating complaints, testing for fair housing violations, and enforcing legal claims or outcomes. The program provides considerable flexibility in the types of activities that can be funded under each initiative. Eligible activities include education and outreach programs, testing based on complaints and other reasonable bases, the recruitment of testers and attorneys, special projects to respond to new or sophisticated forms of discrimination, litigation expenses, and the creation of new fair housing organizations in areas of the country underserved by fair housing enforcement organizations. The program is restricted from funding two types of activities: (1) settlements, judgments, or court orders in any litigation action involving HUD or HUD-funded housing providers and (2) expenses associated with litigation against the federal government. Appendix I provides additional details on the types of activities eligible for funding under the program. FHIP is an integral part of HUD’s fair housing enforcement and education efforts that are concentrated within the Office of Fair Housing and Equal Opportunity. In addition to FHIP, this office is responsible for the oversight of the Fair Housing Assistance Program, investigation and processing of fair housing complaints, and referral of complaints to Justice when appropriate. FHIP links and extends fair housing enforcement and education and outreach activities to many state and local governments and communities across the country. The program makes it possible for HUD to look comprehensively at fair housing problems and to work with the whole spectrum of agencies that are involved in fighting housing discrimination. Taken together, FHIP and the Fair Housing Assistance Program, form a national fair housing strategy through greater cooperation between the private and public sectors. In fiscal year 1996, FHIP accounted for about 22 percent of the Office of Fair Housing and Equal Opportunity’s $76.3 million budget (see fig. 2). HUD uses discretion in deciding how FHIP funds are allocated among the four program initiatives. Reflecting the program’s principal focus, HUD’s budget requests to the Congress set forth how it plans to divide the total amount of dollars requested for FHIP among the four initiatives. Notices of funding availability in the Federal Register indicate the dollar amounts HUD makes available for competition under each program initiative. According to the Acting FHIP Division Director, the Assistant Secretary for Fair Housing and Equal Opportunity determines how funds are allocated on the basis of legislation, administration and agency priorities, and input from the housing industry and fair housing groups. HUD’s allocations for FHIP have consistently reflected that enforcement activities are the principal focus of the program. In annual budget justifications to the Congress, HUD discusses its emphasis for the year and indicates how much of FHIP’s total budget request it plans to allocate to each FHIP initiative. Table II.1 in appendix II shows by fiscal year the dollar amounts HUD anticipated it would allocate to each initiative. The Congress has appropriated amounts equal to or greater than the amounts HUD requested each fiscal year until 1996. In accordance with its budget plans, HUD has made the largest portion of FHIP dollars available for the private enforcement initiative. In 2 fiscal years (1993 and 1994) in which HUD received appropriated amounts higher than its budget requests, the additional dollars available resulted in the private enforcement initiative’s receiving significantly more money than initially planned. Overall, HUD made about 48 percent of FHIP funds available for the private enforcement initiative (see table II.2). The relationship between HUD’s proposed allocations for each initiative and the funds made available indicates that the dollar amounts were basically the same in 4 of the 8 years (fiscal years 1989 through 1991 and 1995). For the remaining years, allocations varied considerably from HUD’s initial budget plans primarily because appropriated amounts for FHIP overall were either higher or lower than the budget requests. The variations were as follows: In fiscal year 1992, the amount appropriated for FHIP was the same as the budget request. The private enforcement initiative’s allocation was $1.3 million less than HUD initially anticipated; the administrative enforcement initiative’s was $0.9 million more, and the education and outreach initiative’s was $0.4 million more. In fiscal year 1993, FHIP’s appropriation was $3 million higher than the budget request. The private enforcement initiative’s allocation was $1 million more; the education and outreach initiative’s, $0.5 million more. The fair housing organizations initiative, which was authorized in late 1992, received a $2.6 million allocation. The administrative enforcement initiative’s allocation was $1.1 million less than anticipated, however. In fiscal year 1994, FHIP’s appropriation was $3.6 million higher than the budget request. Of this, HUD allocated $3 million to the private enforcement initiative and $0.6 million to the fair housing organizations initiative. In fiscal year 1996, FHIP’s appropriation was 43 percent lower than the budget request. While the budget request included funds for all initiatives, owing to the reduced appropriation, HUD did not allocate any funds to the administrative enforcement initiative. Allocations to the other three initiatives ranged from 30 to 120 percent of the amount initially requested. From fiscal year 1989 through fiscal year 1996, HUD received 2,090 applications for FHIP grants and approved about one-quarter of these applications for funding. Historically, the demand for education and outreach grants has exceeded that for the other three initiatives each fiscal year except for 1996. For the 3 most recent years (fiscal years 1994 through 1996), the greatest demand, as measured by the amounts requested on applications, has been for the private enforcement initiative. In fiscal year 1996, the number of applications for grants decreased from 300 in each of the 3 previous fiscal years to 91. The most significant decrease was for education and outreach grants, dropping to 19 applications from over 200 the prior year (see table II.3). HUD told us that the significant drop in education and outreach applications is primarily attributable to language in the 1996 appropriations law requiring applicants to meet the definition of a qualified fair housing enforcement organization in order to be eligible for FHIP funds. According to FHIP legislation, a qualified fair housing enforcement organization is a private nonprofit organization that has at least 2 years of experience in complaint intake, complaint investigations, testing, and enforcement of legal claims. HUD told us that the legislative requirement precluded many previously eligible organizations from applying for an education and outreach initiative grant. Also, according to HUD, a one-third reduction in FHIP’s appropriation for that fiscal year discouraged many organizations from applying for FHIP funding. On the basis of the dollar value of grant applications submitted to HUD, the greatest demand has been for private enforcement initiative grants. Our analysis of the dollar amount of applications is based on fiscal years 1994 through 1996 for which complete information is readily available (see table II.4). Of the total $175 million in applications received for the 3-year period, $76 million, or about 43 percent, was for private enforcement initiative grants, and about 36 percent was for education and outreach initiative grants. From the program’s inception through September 1996, a total of 220 different organizations received FHIP grants in 44 states and the District of Columbia; 26 organizations received about half of all FHIP funds awarded. The organizations are located in 15 states and the District of Columbia. FHIP-funded activities have reflected the program’s purpose as described in the legislation. That is, grantees have used FHIP dollars to fund the kinds of activities intended, namely, implementing fair housing testing programs and testing-related activities; establishing new fair housing organizations; and educating the public and housing providers about fair housing requirements. Through fiscal year 1996, HUD awarded 483 grants totaling $86 million to support fair housing enforcement and education. Of the 220 different organizations that received grants, 26 received about half of the funds awarded. These 26 organizations, located in 15 states and the District of Columbia, received 179 of the 483 grants. They include state governments; national membership organizations; legal aid organizations; and civil rights and advocacy groups. Some have grants that are national in scope, and some are involved in establishing new fair housing organizations in states that were unserved or underserved by fair housing enforcement organizations. Also, some organizations represent all protected classes, while others focus on a specific target population, such as persons with disabilities. Table 1 identifies the 26 organizations and the number and dollar value of grants received through fiscal year 1996. (See app. III for a complete list of the grants awarded and the dollar amount of each.) Many of these organizations received grants in consecutive years as well as grants under more than one FHIP initiative. For example, the National Fair Housing Alliance received at least one grant during each fiscal year of FHIP funding, including two education and outreach grants from 1991 funds, two private enforcement grants and one fair housing organizations grant from 1994 funds, and a fair housing organizations and an education and outreach grant from 1995 funds. The Metropolitan Milwaukee Fair Housing Council also received one grant each fiscal year and two grants in each of two fiscal years—a private enforcement grant and an education and outreach grant in 1990 and two private enforcement grants in 1994. The Open Housing Center, Inc., received three grants in 1994 and two in 1995, but none in 1993. Some of the 26 organizations received grants that were awarded for multiyear projects, and these grants were generally much larger than single-year grants. FHIP grant awards reflect the program’s emphasis on private enforcement-related activities. From fiscal year 1989 through 1996, the largest percentage of FHIP dollars funded activities under the private enforcement initiative—$40.5 million, or 47 percent. Another $15.8 million, or 18 percent, was awarded for the fair housing organizations initiative (see fig. 3). Overall, FHIP-funded activities consist predominately of testing (complaint-based, systemic, or both) and other enforcement-related activities. Under the private enforcement initiative, in particular, funded activities include, among others, testing to confirm allegations of discrimination in the rental and sale of property, litigating cases, organizing new fair housing offices, and developing computer databases on complaints. Seventy-nine different organizations received 202 private enforcement initiative grants ranging from $10,000 to $1 million and averaging about $200,500. Of the 202 grants we reviewed, 181 were funded to carry out testing and testing-related activities. The remaining 21 grants were funded to engage in other enforcement-related activities, such as litigating cases; recruiting and/or training attorneys; developing fair housing databases; establishing a statewide attorney network to handle complaints from member offices; and training volunteers and community residents. In addition, private enforcement initiative grants funded special projects that focus on high-priority issues such as mortgage lending discrimination and insurance redlining. Included among those awards was a fiscal year 1992 grant for $1 million to support a large-scale national testing program to assess mortgage lending discrimination. Information obtained from FHIP-funded projects can be used by either public or private nonprofit organizations, or HUD, as the basis for a formal complaint against individuals or lending institutions. Several FHIP-funded projects involving testing mortgage lenders and insurance companies were completed in 1995, and as a result, complaints have been filed with HUD against three of the largest home insurance companies and five of the largest independent mortgage companies in the country. Under FHIP’s fair housing organizations initiative, 47 different groups received 56 grants ranging from $30,000 to $1,859,000 and averaging about $282,500. While organizations with grants under the fair housing organizations initiative may engage in many of the same activities as the private enforcement initiative grantees, the fair housing organizations initiative was established to create new fair housing enforcement organizations in those areas of the country that were unserved or underserved by these organizations or expand the capacity of existing private nonprofit fair housing organizations. Of the 56 fair housing organizations initiative grants, 19 were used to establish new organizations. According to HUD, some grants funded more than one new fair housing organization, and in total, 23 new organizations have been established with FHIP grants. The new organizations are located primarily in the southern and western United States—areas historically underserved by fair housing enforcement programs, according to HUD. Fair housing organizations initiative grantees were also funded to recruit and train testers, implement testing programs, and conduct community outreach to inform the public about the services provided by newly established fair housing organizations. One hundred and twenty-eight different organizations received 188 education and outreach initiative grants ranging from $6,500 to $1,182,900 and averaging about $119,300. A wide range of activities were funded to provide education and outreach under this initiative’s three components—national, regional and local, and community-based. Overall, the principal activities for the 188 education and outreach grants were developing pamphlets and brochures; preparing print, television, and radio advertisements; producing video and audio tapes; and providing conferences and seminars for other interested parties, including the housing industry, consumers, and community organizations. Twenty-two different organizations received 37 administrative enforcement initiative grants ranging from $55,300 to $439,300 and averaging about $197,200. About two-thirds of those grants funded at least one type of testing, that is, complaint-based or systemic. Other FHIP-funded activities include staff training, community training, tester recruitment, and conciliation/settlement activities. To determine whether grantees used FHIP funds to sue the government, we asked HUD’s Office of General Counsel to identify FHIP grantees involved in litigation with the government. The General Counsel identified 10 cases involving 7 grantees who had filed lawsuits against the government since the inception of the program. Of the 10 lawsuits, 4 (involving 3 grantees) were filed and resolved before a FHIP grant was awarded to the fair housing organization. For the remaining six lawsuits (involving four grantees), pro bono legal services or other resources were used to pursue the cases against the U.S. government, according to HUD. HUD has generally been satisfied with grantees’ use of funds. During the grant performance period and before closing out a grant, HUD reviews quarterly reports and products provided by the grantee to ensure that the organization’s performance is consistent with the grant agreement. At the end of the grant period and after receipt of the final performance reports and products, HUD completes a closeout review. For this final assessment, HUD determines whether the grantee performed all grant requirements, indicates whether all work is acceptable, and rates the grantee’s performance. Our analysis of the available assessments of 206 grants that had been closed out as of November 1996 indicates that HUD believes that the grantees generally carried out the activities as agreed. HUD rated 21 grantees as excellent, 150 as good, 27 as fair, and 6 as unsatisfactory. For the six grantees rated unsatisfactory, the primary reason cited was a failure to complete all the expected work requirements usually because of personnel changes within the organization. According to HUD, these 206 grants did not represent the total of all grants that should have been closed out and evaluated. An additional 118 grants for which the work has been completed and final payments have been made have yet to be closed out. The Acting FHIP Division Director told us that performing closeout reviews is an administrative process and, as such, is a low-priority item. According to HUD’s Office of Procurement and Contracts, neither federal regulations nor HUD’s guidelines include a specific time frame for completing the reviews. We provided a draft of this report to HUD for review and comment. We discussed the draft report with HUD officials, including the Acting FHIP Division Director. In commenting, HUD said that the report presents an accurate description of how FHIP funds are used. HUD also provided other comments consisting primarily of suggested changes to technical information, and we incorporated these in the report where appropriate. We conducted our work between August 1996 and February 1997 in accordance with generally accepted government auditing standards. Appendix IV describes our objectives, scope, and methodology. We will send copies of this report to congressional committees and subcommittees interested in housing matters; the Secretary of Housing and Urban Development; the Director, Office of Management and Budget; and other interested parties. We will also make copies available to others upon request. If you would like additional information on this report, please call me at (202) 512-7631. Major contributors to this report are listed in appendix V. testing and other investigative activities to identify housing discrimination; remedies for discrimination in real estate markets; special projects, including the development of prototypes to respond to new or sophisticated forms of discrimination; technical assistance to local fair housing organizations; the formation and development of new fair housing organizations; capacity building to investigate housing discrimination complaints for all protected classes; regional enforcement activities to address broader housing discrimination practices; and litigation costs and expenses, including expert witness fees. staff training; education and outreach to promote awareness of services provided by new organizations; technical assistance and mentoring services for new organizations; and activities listed above under the private enforcement initiative. projects that help establish, organize, and build the capacity of fair housing enforcement organizations in targeted unserved and underserved areas of the country. media campaigns, including public service announcements, television, radio and print advertisements, posters, pamphlets and brochures; seminars, conferences, workshops and community presentations; guidance to housing providers on meeting their Fair Housing Act obligations; meetings with housing industry and civic or fair housing groups to identify and correct illegal real estate practices; activities to meet state and local government fair housing planning requirements; and projects related to observance of National Fair Housing Month. fair housing testing programs and other related enforcement activities; systemic discrimination investigations; remedies for discrimination in real estate markets; technical assistance to government agencies administering housing and community development programs concerning applicable fair housing laws and regulations; and computerized complaint processing and the monitoring of system improvements. The following four tables provide details on the Department of Housing and Urban Development’s (HUD) allocation of funds among the Fair Housing Initiatives Program’s (FHIP) four funding initiatives or categories, the dollar amounts made available under each category, and the level of demand for funds under each category. The demand is indicated by both the number of applicants and the dollars requested. Table II.1: HUD-Proposed Allocations, by Initiative and Fiscal Year Not applicable. Not applicable. Not applicable. Not applicable. (continued) Toledo Community Housing Resource Board Housing Opportunities Made Equal of Richmond Metropolitan Milwaukee Fair Housing Council Old Pueblo Community Housing Resource Board Housing for All, Metro Denver Fair Housing Center Fair Housing Council of Greater Washington Caldwell Community Housing Resource Board Leadership Council for Metropolitan Open Communities NAACP-Illinois State Conference of Branches Wyandotte County Community Housing Resource Board Community Housing Resource Board of Lake Charles York County Community Action Corporation Camden County Community Housing Resource Board (continued) City of Tulsa, Department of Human Rights Multnomah County Community Development Division Chattanooga Community Housing Resource Board Virginia Polytechnic Institute and University Metropolitan Milwaukee Fair Housing Council Metropolitan Phoenix Fair Housing Center Fair Housing Council of Greater Washington Housing Opportunities Project for Excellence, Inc. Interfaith Housing Center of the Northern Suburbs Leadership Council for Metropolitan Open Communities Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Fair Housing Center of Metropolitan Detroit Fair Housing Council of Northern New Jersey Medger Evers College, Center for Law and Social Justice Monroe County Legal Assistance Corporation Westchester Residential Opportunities, Inc. Metropolitan Fair Housing Council of Greater Oklahoma City (continued) Housing Opportunities Made Equal of Richmond Metropolitan Milwaukee Fair Housing Council Alaska State Commission for Human Rights Arkansas Delta Housing Development Corporation Fair Housing Congress of Southern California Housing for All, Metro Denver Fair Housing Center International Association of Official Human Rights Agencies Fair Housing Council of Greater Washington Neighborhood Federation for Neighborhood Diversity Leadership Council for Metropolitan Open Communities Northern Bergen County Community Housing Resource Board State of South Carolina Human Affairs Commission Fair Housing Congress of Southern California Housing for All, Metro Denver Fair Housing Center Fair Housing Council of Greater Washington (continued) Housing Opportunities Project for Excellence, Inc. Interfaith Housing Center of the Northern Suburbs Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. Leadership Council for Metropolitan Open Communities Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Fair Housing Center of Metropolitan Detroit Fair Housing Council of Northern New Jersey Westchester Residential Opportunities, Inc. Toledo Community Housing Resource Board Fair Housing Council of Suburban Philadelphia Housing Opportunities Made Equal of Richmond Metropolitan Milwaukee Fair Housing Council Connecticut Commission on Human Rights and Opportunities North Carolina Human Relations Commission King County Office of Civil Rights and Compliance (continued) Fair Housing Council of Greater Washington Interfaith Housing Center of the Northern Suburbs Leadership Council for Metropolitan Open Communities Housing Coalition of the Southern Suburbs Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Portland West Neighborhood Planning Council North Carolina State University, Office of Research, Outreach and Extension State of New Jersey, Department of Public Advocacy Housing Consortium for Disabled Individuals Housing Opportunities Made Equal of Richmond Housing for All, Metro Denver Fair Housing Center Fair Housing Council of Greater Washington (continued) Housing Opportunities Project for Excellence, Inc. Leadership Council for Metropolitan Open Communities Fair Housing Center of Metropolitan Detroit Fair Housing Council of Northern New Jersey Westchester Residential Opportunities, Inc. Metropolitan Milwaukee Fair Housing Council King County Office of Civil Rights and Compliance National Association of Protection and Advocacy Systems City of Boston, Boston Fair Housing Commission Metropolitan St. Louis Equal Housing Opportunity Council West Jackson Community Development Corporation State University of New York Research Foundation (continued) Arkansas Delta Housing Development Corporation Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Metropolitan St. Louis Equal Housing Opportunity Council Fair Housing Partnership of Greater Pittsburgh Fair Housing Congress of Southern California Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Fair Housing Council of Northern New Jersey (continued) Westchester Residential Opportunities, Inc. Catholic Community Services of Southern Arizona (dba the Direct Independent Living Center) Independent Living Resource Center of San Francisco Conference of Mayors, Research and Education Foundation Iowa Citizens for Community Improvement Leadership Council for Metropolitan Open Communities Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Legal Aid Bureau of Southwestern Michigan North Carolina State University, Center for Accessible Living Housing Opportunities Made Equal of Richmond (continued) Champlain Valley Office of Economic Opportunity Center for Legal Advocacy (dba the Legal Center Serving Persons With Disabilities) Iowa Protection and Advocacy Services, Inc. Medger Evers College, Center for Law and Social Justice Protection and Advocacy for People With Disabilities North East Wisconsin Fair Housing Council, Inc. Fair Housing Congress of Southern California Housing for All, Metro Denver Fair Housing Center Fair Housing Council of Greater Washington (continued) Housing Opportunities Project for Excellence, Inc. Leadership Council for Metropolitan Open Communities Lawyer’s Committee for Better Housing, Inc. Leadership Council for Metropolitan Open Communities Interfaith Housing Center of the Northern Suburbs New Orleans Legal Assistance Corporation Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Fair Housing Center of Metropolitan Detroit Fair Housing Center of Metropolitan Detroit Legal Aid Bureau of Southwestern Michigan Fair Housing Council of Northern New Jersey Housing Opportunities Made Equal Committee of Cincinnati Fair Housing Council of Suburban Philadelphia Housing Opportunities Made Equal of Richmond Housing Opportunities Made Equal of Richmond (continued) Metropolitan Milwaukee Fair Housing Council Metropolitan Milwaukee Fair Housing Council Maryland Commission on Human Relations Rhode Island Commission for Human Rights Washington State Human Rights Commission Iowa Citizens for Community Improvement Leadership Council for Metropolitan Open Communities Mayor’s Office for People With Disabilities West Jackson Community Development Corporation North Carolina State University, Center for Universal Design (continued) State University of New York Research Foundation Westchester Residential Opportunities, Inc. Eugene/Springfield/Cottage Grove (et al.) Community Housing Resources Board Golden Triangle Radio Information Center Tennessee Association of Legal Services, Legal Aid Projects Fair Housing Council of Greater Washington Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Fair Housing Partnership of Greater Pittsburgh Housing for All, Metro Denver Fair Housing Center Lawyers’ Committee for Civil Rights Under Law of the Boston Bar Association Housing Opportunities Made Equal Committee of Cincinnati Metropolitan Milwaukee Fair Housing Council (continued) As requested, we reviewed (1) how funds are allocated among the four FHIP initiatives, the dollar amounts made available for each initiative, and the level of demand for funds under each initiative and (2) who receives FHIP funds and how the funds are being used. We are also providing background information, as you requested, on the history of FHIP and activities that can be funded under the program. To obtain information on FHIP, its funding, and eligible activities, we reviewed the program’s legislative history, regulations, policies, procedures, and Federal Register notices that solicited applications from eligible fair housing agencies and organizations. We also reviewed HUD’s annual reports to the Congress on fair housing programs for 1993 and 1994 and obtained descriptions and budgets for other HUD-administered fair housing activities. We interviewed the Director, Office of Fair Housing Initiatives and Voluntary Programs (who also is the Acting FHIP Division Director); FHIP’s government technical representatives; the Deputy Assistant Secretary, Enforcement and Investigations; and the Director, Office of Investigations, Fair Housing and Equal Opportunity. We also interviewed FHIP officials at the HUD’s Southwest and Midwest Regions in Fort Worth, Texas and Chicago, Illinois, respectively, as well as officials of six organizations that received FHIP grants. In addition, we held discussions with the National Association of Realtors and the Mortgage Bankers Association and attended the 1996 New England and Mid-Atlantic Fair Housing Conference. To determine how HUD allocates funds among the four program initiatives, we reviewed and analyzed FHIP congressional budget justifications for fiscal years 1989 to 1997. We also reviewed memorandums and correspondence regarding funding allocations and HUD’s priorities for FHIP since its inception. To determine the amounts available for award, we reviewed FHIP’s notices of funding availability as published in the Federal Register for fiscal years 1989 through 1996. To determine the demand for funds, we reviewed and analyzed the available selection results, including technical evaluation panels’ reports, which contained lists of grant applicants and the panels’ recommendations to the Assistant Secretary for Fair Housing and Equal Opportunity. We reviewed technical evaluation reports to compile data on the number of applications by fiscal year and by program initiative. We also analyzed the dollar value of applications for those years for which complete information was readily available—fiscal years 1994 to 1996. Additionally, we reviewed program guidance on the selection process and interviewed HUD government technical representatives involved in the selection process. To identify the recipients of FHIP funds and the amount of dollars received, we obtained a copy of the FHIP funding and contract tracking system’s database, which contained 486 grant listings as of October 1996. Many grant numbers were not accompanied by the grantee organizations’ names and locations. To develop a more complete list, we compared the listed grant numbers to other HUD-provided reports and added names and locations to the database where possible. We used this database as a control for our review of the FHIP grant files. During our review of the files, we filled in the missing names and locations and verified all other grantees’ names and locations, as well as the grant amounts and year of appropriation. To determine how FHIP dollars are being used, we developed a data collection instrument to record data from grant files on the activities organizations agreed to carry out under the program. In developing the instrument, we interviewed program officials, reviewed FHIP legislation and regulations, notices of funding availability, and a sample of FHIP grant files. HUD program officials reviewed and commented on the data collection instrument, and we incorporated their suggested changes. For grants awarded through fiscal year 1996, we reviewed the available grant files (483) and recorded on the data collection instrument the activities each grantee agreed to carry out. We used the information to develop a database from which we analyzed the number and dollar value of the grants awarded to organizations and the kinds of activities funded under each FHIP initiative. We also reviewed the available final performance assessments (206) to determine whether grantees completed work as agreed and how HUD rated their overall performance. We did not independently verify the accuracy of the final performance assessments. In addition, we interviewed HUD Inspector General officials in each HUD region regarding their reviews of FHIP grantees. To determine whether any grantees have used FHIP funds to pay expenses associated with litigation against the U.S. government, we interviewed officials in HUD’s Office of General Counsel, namely, the Assistant General Counsel, Fair Housing Enforcement Division, and Managing Attorney, Litigation Division. At our request, HUD’s General Counsel contacted agency attorneys in each region to determine whether they had knowledge of any lawsuits filed by FHIP grantees against the government. We interviewed the Acting FHIP Division Director, responsible government technical representatives, and government technical monitors about their knowledge of the cases identified. We also reviewed correspondence from grantees concerning whether FHIP funds were used to pursue litigation. Patricia D. Moore Jeannie B. Davis Michael L. Mgebroff Vondalee R. Hunt Alice G. Feldesman John T. McGrail The first copy of each GAO report and testimony is free. Additional copies are $2 each. 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Summary: Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's Fair Housing Initiatives Program, focusing on: (1) how funds are allocated among the program's four initiatives or funding categories, what dollar amounts are made available under each category, and what level of demand exists for funds under each category; and (2) who receives program funds and how the funds are being used. GAO noted that: (1) from the program's inception through fiscal year (FY) 1997, the Congress has appropriated $113 million to carry out the Fair Housing Initiatives Program; (2) the Assistant Secretary for Fair Housing and Equal Opportunity, the Department of Housing and Urban Development, judgmentally determines how funds are allocated among the four initiatives on the basis of the program legislation, the administration's and the agency's priorities, and input from the housing industry and fair housing groups; (3) the agency's budget requests to the Congress set forth how it plans to divide the total program dollars among the four initiatives; (4) the largest portion, more than $40 million, has been budgeted and made available for the private enforcement initiative; (5) as measured by the amounts requested on applications, for the 3 most recent years, fiscal years 1994 through 1996, there is also great demand for the private enforcement initiative; (6) through FY 1996, 220 different organizations in 44 states and the District of Columbia received program grants; (7) of all the funds awarded, 26 organizations received about half; (8) the largest portion of funds, about $41 million, was spent on the private enforcement initiative for activities aimed at determining the existence of discrimination in renting, sales, and lending, primarily testing to investigate individual complaints and testing to investigate industry practices; (9) grantees have used funds for a variety of other fair housing activities, such as litigation, new fair housing organizations and capacity building for existing organizations, pamphlets and brochures, print, television, and radio advertisements, and conferences and seminars for housing industry professionals; and (10) other funded activities also have included special projects on mortgage lending and insurance redlining.