OFFICE LOCATIONS: CHARLES W. DENT COMMITTEE ON APPROPRIATIONS Congress of the United States ‘conwartee on ETH6s House of Representatives aie Washington, BE 20515-3815 oer, October 6, 2011 ro to)san-09 Dana B. Grubb 2420 Henderson Place Bethlehem, PA 18017 Dear Nir-Grubb, ‘Thank you for your recent email expressing concer about the misappropriation of federal Community Development Block Grant (CDBG) funding by the City of Bethlehem, Particularly given your extensive experience with this program having administered CDBG funds for the City for nearly two decades, your comments carry a great deal of weight and credibility. As a long time supporter of the CDBG program, | ‘was extremely disappointed to hear the City of Bethichem has been misusing these limited federal funds. | particularly appreciate you sharing your concerns with me because as you stated in your email, I sit on the House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Agencies (THUD), which is charged with determining the discretionary funding levels for HUD programs, including CDBG, and exercising oversight. Clearly it is concerning that the City of Bethlehem has improperly transferred funds in this manner but it also raises the broader question of how many other grantees are similarly misappropriating these funds. Thave forwarded your email to the Secretary of Housing & Urban Development along with a letter requesting that the Department review City of Bethlehem’s administration of the CDBG program and more broadly, provide me with an update on steps that are being taken to ensure CDBG funds are not misappropriated by grantees. I have enclosed my letter to Secretary Donovan. I will be sure to keep you informed as the Department responds, have also enclosed sections of the fiscal year 2012 THUD appropriations bill and House report that I thought you may find interesting which instruct HUD to improve oversight of CDBG grantees, Again, thank you for taking the time to bring this issue to my attention, Sincerely, COR VO+ CliarLES W. DENT MEMBER OF CONGRESSCHARLES W. DENT SaIAITIEE oy aeenceeaTOR Congress of the United States House of Representatives er Washington, DE 20515-3815 val EE ny ‘COMMITTEE OW Eric October 6, 2011 ‘The Honorable Shaun Donovan Secretary USS. Department of Housing and Urban Development 451 7" Street, SW Washington, DC 20410 Dear Secretary Donovan, ‘Throughout my years of service in the Pennsylvania General Assembly and the U.S. House of Representatives, I have supported the Community Development Block Grant (CDBG) program as an important tool in helping communities expand economic opportunity. Consequently, I was troubled by correspondence I recently received from a constituent highlighting an example of the misappropriation of CDBG funds. | appreciate your attention to this matter. As you will read in the attached email, an audit of the second largest city in my district has revealed that the city has been improperly transferring CDBG funds into the city's general fund in order to support operating costs. It appears that this may be an ongoing practice for this grantee and it raises the question of how many other grantees are similarly misappropriating these funds. In this fragile economy and with the serious budgetary constraints facing our nation, we must ensure every federal dollar is allocated wisely and spent effectively. One of the strengths of the CDBG program is that it gives localities flexibility to target these precious federal resources in the manner that will have the greatest impact on expanding economic opportunity; however, that flexibility must not be exercised without oversight and accountability. Also, this funding is not intended to serve as a slush fund for localities to backfill shortfalls in their general operating expenses as a result of budgetary gimmickry, My colleagues and I on the House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Agencies noted in the report accompanying the fiscal year 2012 bill that “some grantees have squandered and misappropriated large amounts of federal taxpayer dollars.” In the bill, we have directed the Government Accountability Office (GAQ) 10 conduct a study to identify waste, fraud and abuse in the block grant programs administered by the Office of Community Planning and Development, and issue recommendations to eliminate such problems. Additionally, we have instructed the Department to take necessary actions to improve data quality, data management, and grantee oversight and accountability| appreciate your review of the administration of CDBG funds by this particular grantee and I request an update on steps the Department is taking to ensure CDBG funds are not misappropriated in this manner. Sincerely, Cw hy Caries W. Dent MEMBER OF CONGRESS ce: John P, McCarty, Acting Deputy Inspector General, U.S. Department of Housing and Urban Development Office of Inspector General Tom Latham, Chairman, House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Agencies