HUD’s Use of, Accounting for, and Reporting on CARES Act Funding

As of March 31, 2021, HUD had disbursed $3.4 billion and obligated $7.4 billion of its $12.4 billion in CARES Act funds. Meanwhile, HUD has more than $1.6 billion in CARES Act funds unobligated. These funds have various expiration dates. For example, HUD has until September 30, 2021, to obligate $28 million of the remaining management and administration CARES Act funds and until September 30, 2022, to obligate more than $1.3 billion of the remaining Office of Community Planning and Development’s CARES Act funds. If HUD is unable to obligate funds properly before its appropriations expire, it may have balances canceled and returned to the General Fund when the expired account(s) closes. HUD tracks all CARES Act funding in its financial systems using disaster emergency fund codes (DEFC) “N” and “O” assigned by the Office of Management and Budget and the U.S. Department of the Treasury. HUD incorporates these DEFCs into the fund code for each program, which allows HUD to track the status of each program’s CARES Act funds. Regarding the CARES Act requirement for preventing duplication of benefits, the Act does not specify a structure for meeting this requirement. According to HUD, it passed on the responsibility to prevent the duplication of benefits to Community Development Block Grant-CARES Act grantees. HUD’s reporting process generally supports CARES Act reporting requirements, which are outlined in Section 15011 of the CARES Act. By leveraging existing reporting mechanisms, HUD has established a process to meet portions of its Pandemic Response Accountability Committee (PRAC) quarterly reporting requirement on behalf of covered recipients. However, HUD’s process does not support reporting quarterly on the estimated number of jobs created or retained or on subrecipient data, as required for covered recipients in the CARES Act. Further, unclear reporting requirements and the required reporting schedule pose challenges to HUD’s quarterly reporting to the PRAC. As of March 31, 2021, HUD’s Office of Inspector General (OIG) had undertaken 26 reviews related to the CARES Act, of which one report offers a recommendation on CARES Act-related accounting. HUD OIG has published two other reports highlighting the need for customer service-related improvements. HUD OIG has several ongoing reviews and continues to perform oversight work related to the CARES Act.