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Línea Directa

REPORTAR FRAUDE, DESPERDICIO O ABUSO
Marzo 13, 2012
  • Community Planning and Development
2012-LA-1005
2012-la-1005.pdf

The City did not expend Brownfields and Section 108 funds awarded for the development of the project in accordance with HUD requirements. Specifically, the City used loan and grant funds for an ineligible project and expended grant funds after the grant deadline. As a result, it expended (1) $3.8 million in loan funds on an ineligible project, (2) $625,000 in grant funds on an ineligible project after the grant expenditure deadline, and (3) an additional $897,821 in grant funds after the grant expenditure deadline. As a result, the City did not ensure that HUD funds were disbursed in accordance with HUD rules and regulations and used on approved projects intended to meet the programs’ national objectives.

We audited the City of Los Angeles’ Community Development Department as a result of a complaint, which alleged that U.S. Department of Housing and Urban Development (HUD) funds were misused for the development of the Goodyear Industrial Tract project. The City was awarded Brownfields Economic Development Initiative grant funds and Section 108 loan guarantee funds for the development of this project. Our audit objective was to determine whether the City expended Brownfields and Section 108 funds for the development of the project on eligible activities and within required deadlines in accordance with HUD requirements.

We recommend that the Director of the Los Angeles Office of Community Planning and Development require the City to (1) repay $3.8 million from non-Federal funds for the use of Section 108 loan funds for an ineligible project, plus any interest due, to HUD’s Section 108 loan account; (2) reimburse $625,000 from non-Federal funds for the use of Brownfields funds for an ineligible project after the grant agreement deadline, plus any interest due, to HUD’s Brownfields account; (3) reimburse $897,821 from non-Federal funds for use of the funds after the grant agreement deadline, plus any interest due, to HUD’s Brownfields account; and (4) establish and implement policies, procedures, and controls to ensure that grant and Section 108 loan funds are used for eligible project activities and expended within applicable deadlines in accordance with HUD rules and regulations.