The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the City of East St. Louis, Illinois’ (City) Community Development Block Grant (Block Grant) program. Our objectives were to determine whether the City properly expended Block Grant funds for salaries and building expenses and followed proper procurement processes while awarding significant administration contracts. The City did not properly allocate salary and building expenses to the Block Grant program. It also did not properly document the cost estimate and selection process used to procure a contract for developing its 5-year consolidated plan.

We recommended that HUD require the City to provide supporting documentation or reimburse its Block Grant program from non-Federal funds for more than $1 million paid for salary expenses, building rent, and the administration contract. Additionally, we recommended that HUD require the City to implement acceptable policies and procedures and provide technical assistance to ensure future compliance.