HUD OIG audited the CDBG program administered by the City of Miami, FL, and found that the City did not administer its CDBG program in accordance with applicable HUD requirements. It did not meet national objectives for its commercial façade program. As a result, it had no assurance that more than $4.1 million in expended CDBG funds achieved the intended national objective or met program requirements. In addition, the City did not properly allocate salary expenditures to its CDBG program or maintain adequate supporting documentation demonstrating that employees worked in the program. As a result, it improperly allocated more than $690,000 to the program. The City also did not accurately report CDBG financial information to HUD in accordance with Federal requirements. It inaccurately reported administrative/planning costs for program year 2006 and failed to report nearly $266,000 in reprogrammed CDBG funds to HUD. As a result, there was a lack of assurance that the City reported accurate CDBG financial information to HUD in accordance with HUD regulations.
OIG recommended that HUD require the City to (1) provide documentation to support that CDBG program requirements were followed and the intended national objective was met for two commercial façade activities or reimburse its program from non-Federal funds, (2) reimburse its program from non-Federal funds for unsupported salary expenditures, and (3) provide documentation to support the reprogrammed funds or reimburse its program from non-Federal funds for canceled CDBG activities for which funds were reprogrammed. (Audit Report: 2009-AT-1011)
HUD OIG audited the CDBG program administered by Miami-Dade County, FL, and found that the County did not administer its CDBG program in accordance with applicable HUD requirements. It did not comply with HUD requirements in meeting national objectives and performance goals and failed to recapture CDBG funds for canceled activities that did not meet a national objective. In addition, the County did not accurately report CDBG financial and program information to HUD in accordance with Federal requirements. It failed to report CDBG program income for four activities, inaccurately reported program income for 2007, and inaccurately reported the status and accomplishments of CDBG activities to HUD.
OIG recommended that HUD require the County to (1) provide documentation to support that CDBG program requirements were followed and national objectives and performance goals were met for eight activities or reimburse its program $4 million from non-Federal funds and (2) recapture more than $649,000 expended for eight activities that had been canceled. In addition, HUD should require the County to (1) ensure that CDBG program income is properly reported for four activities and (2) implement and enforce written policies and procedures to ensure effective performance and compliance with HUD regulations for meeting CDBG national objectives and performance goals and reporting program information and income to HUD. (Audit Report: 2009-AT-1008)
Opportunity Department and found that the Department did not have adequate controls over its CDBG funds. Specifically, it did not (1) have written policies and procedures for the administration of its CDBG funds, (2) monitor the use of the funds, (3) maintain documentation showing that its activities met national objectives, (4) compare disbursement requests to existing contracts to ensure that CDBG funds were spent in accordance with the contract, and (5) have a process in place to eliminate known conflicts of interest. As a result, Adams County spent more than $1.2 million on ineligible CDBG activities, awarded nearly $308,000 in CDBG funds without amending its written agreements with the subrecipients, and did not ensure that more than $1.6 million in CDBG activities met a national objective.
OIG recommended that HUD ensure that Adams County (1) reimburses its CDBG funds from non-Federal funds for any ineligible expenditures, (2) provides supporting documentation showing that the CDBG funds met a national objective, (3) implements an acceptable internal control structure by preparing and implementing effective policies and procedures, and (4) receives technical assistance from HUD to ensure compliance. (Audit Report: 2009-DE-1005)
HUD OIG audited the City of Rome, NY’s administration of its economic development activity, known as General Cable, under its CDBG program and found that the City did not always carry out its activities effectively, efficiently, and economically in compliance with HUD regulations. Further, it expended CDBG funds for an activity that did not meet a national objective of the program. Specifically, the City failed to (1) develop a plan to ensure that the required job creation goal would be achieved, (2) adequately address known concerns about the activity’s progress, and (3) maintain adequate supporting documentation. As a result, no jobs were created, and there was no assurance that activity costs were necessary, reasonable, and in accordance with Federal regulations. Consequently, the City did not use CDBG funds to address community needs.
OIG recommended that HUD instruct the City to (1) implement procedures and controls to ensure that funded economic development activities are feasible and can be completed in a timely manner to meet a national objective of the CDBG program, (2) establish a schedule for documenting completion of the activity and the jobs retained and/or created at the site, and (3) reimburse HUD any portion of the more than $2.95 million in CDBG funds expended on the activity for costs that do not qualify as meeting the job creation requirement. (Audit Report: 2009-NY-1012)
HUD OIG audited the CDBG program administration of the Union County Consortium in Elizabeth, NJ, and found that the County did not always disburse CDBG funds in accordance with regulations, maintain a financial management system that always safeguarded funds, or establish sufficient controls to ensure that program activities were properly administered and complied with CDBG national objectives. Specifically, the County (1) drew down CDBG funds instead of first using available program income, (2) transferred program income and CDBG funds for non-CDBG uses, (3) used program income for unsupported items, (4) inadequately recorded and reported program income, and (5) inadequately monitored its consultant.
OIG recommended that HUD instruct the County to (1) establish controls to ensure that available program income is used before drawing down funds from HUD’s line of credit, (2) reimburse the program income account nearly $464,000 from non-Federal sources if the County cannot provide supporting documentation, (3) implement policies and procedures to ensure that program income is accurately recorded and reported, and (4) instruct its consultant to remit nearly $32,000 to the County to be put back into the County’s line of credit since the funds were not disbursed. (Audit Report: 2009-NY-1010)
HUD OIG audited the City of Thornton, CO’s CDBG program and found that the City did not maintain sufficient records demonstrating that each CDBG activity met a national objective. Of the 10 CDBG projects reviewed, the City sufficiently documented that five of the projects met a national objective. However, for four projects that the City certified met the national objective based on area benefit, it did not identify the specific area to be benefited by the activity, document that at least 51 percent of the residents in the area were low- and moderate-income persons, or document that the area was primarily residential. For the remaining project, it did not certify what national objective the project would meet or document that a national objective was ultimately met.
OIG recommended that HUD require the City to (1) provide documentation supporting that the five CDBG projects met a national objective and (2) establish and implement effective policies and procedures to ensure that it maintains adequate documentation to support compliance with the CDBG national objective requirements. (Audit Report: 2009-DE-1004)
HUD OIG audited the City of Little Falls, NY’s Small Cities CDBG and HOME programs administered by its Urban Renewal Agency (URA) and found that the City and its URA did not comply with HUD requirements while administering the programs. Although the City and its URA are attempting to correct deficiencies that exist within their HUD-funded programs, the City’s books and records could not be relied upon to provide current or accurate data and were, therefore, not auditable.
OIG recommended that HUD instruct the State of New York’s Office of Community Renewal and Housing Trust Corporation to (1) coordinate its efforts to conduct a comprehensive monitoring of the City and its URA to ensure that they adequately administer the City’s HUD-funded Small Cities CDBG grants and HOME program in compliance with applicable HUD and State of New York requirements; (2) fully reconcile the sources and uses of all grant funds for each CDBG and HOME project and cash account that it administers and develop procedures to ensure that the appropriate cash accounts are used for grant income and expense transactions; (3) account for, reconcile, and report on all program income transactions; (4) develop administrative control procedures to ensure compliance with all HOME program disbursement and reporting requirements; and (5) establish procedures to ensure the proper monitoring and maintenance of CDBG and HOME program activity files. (Audit Report: 2009-NY-1801)
HUD OIG audited HUD’s monitoring of its CDBG program grantees under the jurisdiction of the Philadelphia, PA, and Baltimore, MD, CPD field offices and found that the Philadelphia and Baltimore CPD field offices did not adequately document their monitoring of CDBG program grantees. Specifically, the field offices did not always maintain documentation to demonstrate that their monitoring was complete and did not always notify grantees of the findings and concerns identified during on-site monitoring within the required time limit.
OIG recommended that HUD reemphasize to field office staff the importance of following established monitoring procedures, specifically to ensure that (1) all correspondence, documentation, and work papers relating to monitoring and conclusions are maintained in the official monitoring files; (2) monitoring officials use the required monitoring exhibits; (3) monitoring officials answer all of the questions and fill in all of the text boxes in the monitoring exhibits; and (4) staffs prepare and send notification of the monitoring results to the grantees within the required 45-day time limit. In addition, OIG recommended that HUD develop and implement a written quality assurance procedure and/or mechanism to ensure that monitoring conclusions are appropriately supported by complete documentation and that monitoring letters are submitted to grantees within the 45-day requirement. (Audit Report: 2009-PH-0002)