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Top 4 Challenges Governments Encounter When Managing CDBG Funding

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This blog is an excerpt from our recent playbook, “How States Can Partner With Local Government to Distribute Relief Funding.”

State and local governments are receiving the largest amount of grant funding yet that will be channeled to communities, small businesses, and individual citizens as part of the American Rescue Plan Act of 2021. In fact, for the very first time, as much as $65.1 billion will be distributed to cities using a modified Community Development Block Grant (CDBG) program formula. However, to ensure this funding actually has the desired impact in communities, multiple stakeholders must work together, especially when it comes to the timely distribution and management of those funds. 

While the concept of CDBG seems simple enough, the implementation of this funding as well as ensuring program delivery, compliance and accountability of those dollars is highly complicated. Not to mention this type of funding crosses multiple stakeholders, including state agencies, counties, local governments, and local businesses and communities. 

With all these dollars moving through CDBG programs, it’s nearly impossible to handle through paper-based processes, disparate emails, and Excel spreadsheets. Even governments who’ve been forced to go digital as a result of the COVID-19 pandemic still use apps and tools and repurpose them in ways they weren’t designed, leading to serious inefficiencies.

This means a lot more room for human error, which can lead to serious consequences such as audit findings and having to return federal funding. 

4 Pain Points When it Comes to Managing and Distributing CDBG Funding

Here are some of the primary pain points governments can encounter when managing CDBG funding:

  • Managing several grant programs through different tools or computer systems: This hinders effective collaboration. If someone is offline, how do they access certain grants or files? Additionally, this makes it especially difficult to view or report on grants across these multiple programs without extracting information from individual systems. 
  • Ensuring transparency, accountability, and compliance with reporting requirements: Over $117 million is being allocated to Oversight and Accountability as part of the 2021 American Rescue Plan Act. What this means is that CDBG funds will come with a myriad of regulations and reporting requirements. Tracking these through reams of binders or disparate systems is not only ineffective, it is also a serious security issue and can lead to failure to meet reporting and compliance requirements. 
  • Effective document management: For many governments, some programs are entirely reliant on paper-based processes that involve circulating paper files around the organization. This is especially problematic when most government workforces have been forced to move processes online. That’s why governments must fully transition grant processes away from paper and use electronic document management solutions. 

  • Tracking recipient spending of grant dollars: Effective collaboration is critical to the success of programs and ensuring every CDBG dollar is maximized for community impact. However, collaborating through disparate emails and manual paper-based processes can make it especially difficult for states and other governments managing funding to ensure recipients are meeting goals and project deadlines as well as spending the funds in accordance with 2 CFR 200 requirements. Without that insight and ability to track where grant dollars are going in real time, it’s even more difficult to be accountable for CDBG spending when it comes to reporting and preparing for the single audit.

Managing Grants in a Holistic Manner

The good news is that eCivis helps address all of these challenges through our enterprise grants management system. This helps to alleviate administrative burden, streamline the intake of funding, automate regulation, management, and compliance while enhancing communication and collaboration between all the key players. Not only will this allow governments to be more efficient in receiving and disbursing CDBG funding, but, more importantly, it will enable the workforce to focus on serving their communities.


This blog is an excerpt from our recent playbook, “How States Can Partner With Local Government to Distribute Relief Funding.” Click on the link below to download and read the full guide.

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