Tuesday, March 11, 2008

Government Accountability Office Reports on Leveraging in Community Development and Housing Programs

The Government Accountability Office (GAO) has issued a report on the leveraging measure used by several federal community development and housing programs operated by the Departments of Treasury and Housing and Urban Development (HUD).

GAO found that leverage measures Treasury and HUD reported lacked transparency because the agencies generally did not disclose the limitations of the data or the methods used to calculate them. Based on its review of available leveraging data and interviews with Treasury and HUD officials, GAO found that the leverage measures the agencies reported for the selected programs were based on incomplete data and did not capture the actual extent of leveraging.

In addition, the agencies generally reported measures that described the ratio of all other funds (federal, state, local, and private funds) to program funds. Alternative measures that described the total federal investment or total private investment in a program provided considerably different results about the extent of leveraging.

No agency-specific or government-wide guidance directs what agencies should disclose about the leverage measures they report for the selected programs. Consequently, absent specific information on how agencies calculate these measures and their limitations, decision makers would not have sufficient information to understand their meaning and determine their appropriate use.

Leverage measures can provide basic information about programs GAO reviewed. Their relevance in assessing the performance of these programs varies. To the extent that leveraging is a goal or expected activity of a program, leverage measures can describe program outputs and assess the efficiency and effectiveness of a program in meeting its goals. In cases where leveraging is not clearly and appropriately linked to program goals and activities, use of such measures to describe program outputs could be misleading.

You can find the full report here.

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