Report To The Utah Legislature - A Performance Audit Of The Division Of Housing And Community Development - 2012 Page 28
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33Chapter II. Land-banking is allowed under federal rules for NSP
money. It also appears that only two of the properties purchased by
UCAH were previously owned by the private company donating the
administrative costs, and those properties were not purchased until
later in the process. This constitutes less than two percent of the total
NSP1 funding.
HCD Acted Appropriately When Not
Issuing an RFP for NSP3 Funds
Charges that the Neighborhood Stabilization Program 3 (NSP3)
was awarded unfairly, or that the RFP announcement was difficult to
find seem to be based on confusion about the nature of the allowed
use of NSP3 monies. HCD did not issue an RFP for NSP3, nor was
the division required by the federal government to do so. The money
is scheduled to be used for a short-term construction loan and will be
available for reuse within a short time.
Although HCD chose to issue an RFP for the federal monies
offered in NSP1, they did not choose to do so with NSP3 monies.
Following federal
guidelines, NSP3 was
NSP3 was an extension of the Neighborhood Stabilization Program,
not awarded using an
which is a component of the federal Community Development Block
RFP.
Grant program. NSP3 had similar requirements for eligible uses as
NSP1, although the amount was $5 million instead of $19.6 million.
Similarly, the federal government did not require that states issue
RFPs. In this instance, HCD chose not to issue an RFP, but to loan
the funds directly for construction activities.
HCD’s direct use of the money was allowed and encouraged by the
federal government. The Federal Register, which provided guidelines
for NSP spending, states
‘Any State . . . that receives amounts pursuant to this section shall .
. . use such amounts to purchase and redevelop . . .’ This clearly
speaks to the states using funds directly for projects . . . Direct use
of funds by a state may also result in more expeditious use of NSP
funds. Therefore, a state receiving NSP funds may carry out NSP
activities directly for some or all of its assisted grant activities.
A Performance Audit of the Division of Housing and Community Development (February 2012)
18
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