SANTA FE – In the latest twist in a long-running saga, the U.S. Department of Housing and Urban Development has dismissed three of its four “findings” against a New Mexico state government division that oversees several federal grant programs.
In addition, the federal agency plans to help the New Mexico Department of Finance and Administration improve how one grant program is run.
The decision marks a softer tone for HUD, which had threatened in July to cut off administrative funding to DFA over perceived problems with grant management.
“I actually think this worked out pretty well in the end,” state Finance and Administration Secretary Tom Clifford said Friday. “I think we made the case that we’re doing our job.”
The director of HUD’s Office of Community Planning and Development in Albuquerque threatened in July to cut off administrative funding – totaling an estimated $279,000 – to the state, while claiming DFA officials had shown a “lack of responsiveness” and “insolence.”
Specifically, the local HUD official raised four general concerns, or findings, about DFA oversight – poor management of grant money, delays in distributing grant funding to cities and counties, a lack of responsiveness and a high number of citizen complaints.
However, HUD officials in Washington, D.C., later backed off that threat, after Clifford warned that the loss of funding could cause state workers to be laid off.
After the state agency provided a detailed response to HUD’s concerns, the federal agency’s deputy assistant secretary for special needs programs, Mark Johnson, told Clifford in a letter received this week that three of the four findings had been withdrawn.
Some of the concerns raised by HUD were challenged by the state, though others prompted new procedures to be implemented.
For instance, the Department of Finance and Administration is working to ensure that the state pays back unused grant money in a timely manner, Clifford said. It previously took the state agency more than two years to return $13,534 in unused grant money to HUD.
Also, DFA’s Local Government Division has come up with a centralized computer database for tracking the oversight of each project around the state that is funded by a HUD grant, division director Ryan Gleason said.
The state agency is tasked with managing several HUD grant programs. Those programs include the Community Development Block Grant program, aimed at paying for affordable housing and other types of public works projects, and a neighborhood stabilization program, intended to prop up areas hit hard by foreclosures.
In addition, DFA oversees an economic development loan program that is an offshoot of the HUD block grant program.