We audited the City of Fresno’s Community Development Block Grant (CDBG) program. We selected the City based on prior findings identified by the U.S. Department of Housing and Urban Development (HUD) and continuing issues with the program. The objective of the audit was to determine whether the City administered its CDBG funds in accordance with HUD requirements, focusing on code enforcement, antigraffiti, and after school program activities; monitoring; and program income.
The City did not administer its program in accordance with HUD requirements. Specifically it (1) did not meet HUD’s code enforcement requirements, (2) spent CDBG funds on general government expenses, (3) did not ensure that one program met a CDBG national objective, (4) did not properly monitor its subrecipient or City departments, (5) used its entitlement funds before its program income, and (6) did not report program income to HUD in a timely manner. This condition occurred because the City (1) lacked the capacity and experience to administer and implement the program, (2) did not have adequate procedures and controls in place, and (3) disregarded HUD requirements. As a result, it used CDBG funds for $163,555 in ineligible costs and more than $7.9 million in unsupported costs and put $428,373 at risk over the next year of similar questionable use.
We recommend that the Acting Director of HUD’s San Francisco Office of Community Planning and Development require the City to (1) repay the program $163,555 from non-Federal funds, (2) support the eligibility of more than $7.9 million in CDBG costs or repay the program from non-Federal funds, (3) suspend funding to its code enforcement program until it can show that it has implemented controls, addressed its capacity issues, and understands and abides by HUD requirements, (4) implement policies and procedures to ensure that $428,373 in CDBG funds is used in accordance with program requirements, and (5) provide training
Recommendations
Community Planning and Development
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Status2017-LA-1006-001-AOpenClosed$6,529,501.00Questioned 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.
Closed on Septiembre 27, 2022Support the eligibility of $6,529,500 in code enforcement costs, including meeting code enforcement requirements, preparing time distribution reports, and supporting vehicle costs, or repay the program from non-Federal funds (appendix D).
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Status2017-LA-1006-001-BOpenClosedClosed on Mayo 21, 2018
Suspend funding to its code enforcement program until it can show that it has implemented controls, addressed its capacity issues, and understands and abides by HUD requirements.
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Status2017-LA-1006-001-COpenClosed$4,565.00Questioned 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.
Closed on Junio 29, 2018Repay the program $4,565 from non-Federal funds for ineligible code enforcement program costs.
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Status2017-LA-1006-001-DOpenClosed$139,071.00Questioned 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.
Closed on Agosto 02, 2018Repay the program $139,071 from non-Federal funds for ineligible tire team code enforcement program costs.
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Status2017-LA-1006-001-EOpenClosed$19,919.00Questioned 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.
Closed on Octubre 02, 2018Repay the program $19,919 from non-Federal funds for ineligible antigraffiti program salary costs.
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Status2017-LA-1006-001-FOpenClosed$1,107,000.00Questioned 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.
Closed on Diciembre 06, 2018Support the eligibility of the $1,107,000 in after school program costs, including meeting the limited clientele national objective, or repay the program from non-Federal funds.
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Status2017-LA-1006-001-GOpenClosed$218,028.00Questioned 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.
Closed on Octubre 02, 2018Support the eligibility of the $218,028 in antigraffiti costs or repay the program from non-Federal funds.
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Status2017-LA-1006-001-HOpenClosed$55,000.00Questioned 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.
Closed on Junio 04, 2019Support the eligibility of the $55,000 subrecipient drawdown or repay the program from non-Federal funds.
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Status2017-LA-1006-001-IOpenClosed$428,373.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on Octubre 02, 2018Develop and implement written code enforcement policies and procedures to meet CDBG requirements or amend the funding for another CDBG-eligible project. Improving code enforcement controls will result in $428,373 in funds to be put to better use.
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Status2017-LA-1006-001-JOpenClosedClosed on Junio 29, 2018
Execute contractual agreements with each CDBG recipient department to ensure compliance with all Federal guidelines.
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Status2017-LA-1006-001-KOpenClosedClosed on Agosto 02, 2018
Develop and implement written policies and procedures for specific departments, update and implement CDBG-specific written policies and procedures, and provide formal training and technical assistance to the Development and Resource Management Department employees to ensure that they understand and follow CDBG requirements.
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Status2017-LA-1006-001-LOpenClosedClosed on Agosto 02, 2018
Develop and implement a monitoring program within the City’s Development and Resource Management Department to ensure that it periodically monitors and provides guidance to its subrecipient(s) and City departments on how to administer CDBG funds.