We audited the City of Newark, NJ’s Homelessnes Prevention and Rapid Re-Housing Program (HPRP) in support of the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) goal to review the expenditure of American Recovery and Reinvestment Act funds and contribute to improving HUD’s execution and accoutability of fiscal responsibilites. The audit objective was to determine whether City of Newark officials obligated and expended HPRP funds within prescribed timeframes and implemented adequate controls to ensure that grant awards complied with HPRP program requirements.

City of Newark officials expended funds within prescribed timeframes; however, they lacked adequate documentation to support that some funds were obligated in a timely manner, and expended funds for ineligible and unsupported costs. Specifically, City officials lacked support that $243,534 was properly obligated by the September 30, 2009 deadline, expended $38,330 for ineligible activities or participants, and expended $18,341 without adequate supporting documentation. In addition, subgrantee on-site monitoring was not conducted as specified by City policy. These deficiencies occurred because of control weaknesses in the administration of the City’s HPRP and City officials’ unfamiliarity with HUD regulations.

We recommend that the Director of HUD’s New Jersey Office of Community Planning and Development instruct City officials to (1) provide adequate documentation to support whether $243,534 was obligated in a timely manner (2) reimburse the HPRP line of credit for $38,330 expended for ineligible costs, (3) provide documentation to adequately support that $18,341 was expended for eligible costs, and (4) conduct onsite monitoring of the City’s subgrantees as specified in its HPRP guidelines.