We audited the U.S. Department of Housing and Urban Development’s (HUD), oversight of Community Development Block Grant Disaster Recovery (CDBG-DR) grantees’ use of program income. We initiated this audit in accordance with our goal of ensuring and promoting accountability and effectiveness in disaster response and recovery. Our audit objective was to determine whether HUD ensured that program income generated from disaster funds awarded to CDBG-DR grant recipients was used to positively impact and support disaster recovery in affected areas and to benefit program beneficiaries. HUD generally ensured that its CDBG-DR grantees used program income generated from disaster funds to positively impact and support disaster recovery in affected areas and to benefit program beneficiaries. HUD’s grantees maintained adequate documentation for most program income vouchers tested, supporting that program income was generally used in accordance with Federal regulations and positively impacted the program. However, some grantees did not always (1) spend a substantial amount of their program income funds before using their CDBG-DR funds and (2) submit Federal financial reports (FFR) quarterly as required. Opportunities existed for HUD to improve its oversight of program income funds to reduce risks related to the reporting, reconciling, and spending of program income. As a result, (1) HUD could not effectively track the status of grantee financial data related to program income, and (2) HUD did not have reasonable assurance that it provided accurate grant data reports to Congress.
Recommendations
Community Planning and Development
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Status2023-FW-0002-001-AOpenClosed$2,551,375.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
We recommend that the Director for HUD’s Office of Disaster Recovery require grantees to support or repay to its program $2,551,375, from nonfederal funds, for the 9 vouchers that did not have adequate supporting documentation for expenditures.
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Status2023-FW-0002-001-BOpenClosed
We recommend that the Director for HUD’s Office of Disaster Recovery work with its grantee to resolve or correct program income balances for the three grants that had program income balances outstanding.
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Status2023-FW-0002-001-COpenClosed
We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that program income balance discrepancies are identified and corrected.
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Status2023-FW-0002-001-DOpenClosed
We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that untimely FFRs are identified and corrected.
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Status2023-FW-0002-001-EOpenClosedClosed on Septiembre 30, 2024
We recommend that the Director for HUD’s Office of Disaster Recovery establish a mechanism to train grantees and HUD staff on existing guidance regarding supporting documentation for expenditures, FFRs, and program income balances on a recurring basis. Additionally, provide guidance and establish recurring training for HUD staff to monitor grantees for program income and submission of the FFRs..
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Status2023-FW-0002-001-FOpenClosed
We recommend that the Director for HUD’s Office of Disaster Recovery implement quality control procedures to ensure that HUD staff completes the action plan and QPR checklists.
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Status2023-FW-0002-001-GOpenClosedClosed on Marzo 31, 2024
We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that grantees’ policies and procedures related to program income are adequate.
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Status2023-FW-0002-001-HOpenClosedClosed on Septiembre 30, 2024
We recommend that the Director for HUD’s Office of Disaster Recovery provide training to grantees regarding the reporting, tracking, and expenditure of program income.