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REPORTAR FRAUDE, DESPERDICIO O ABUSO
Septiembre 03, 2013
2013-AT-0003
2013-AT-0003.pdf

We audited the U.S. Department of Housing and Urban Development’s (HUD) controls over the Brownfield and Round II Empowerment Zone programs as part of the Office of Inspector General’s (OIG) annual plan.  Our objective was to determine whether HUD had adequate procedures to measure Brownfield and Round II Empowerment Zone effectiveness.

HUD did not have adequate procedures to ensure the effectiveness of its Brownfield Economic Development Initiative.  It did not fully implement plans to improve monitoring and did not identify and terminate in a timely manner projects that grantees never started.  These conditions occurred because of confusion within HUD over monitoring requirements and responsibilities, and because HUD was reluctant to terminate projects and de-obligate funds before grants expired.  As a result, the Brownfield program was not always effective.  In addition, HUD unnecessarily delayed returning at least $22.4 million in unneeded Brownfield funds to the Treasury, and needs to return an additional $5.16 million for projects that grantees did not start. 

HUD’s Round II Empowerment Zone Performance Measurement System (PERMS) contained unsupported and inaccurate program results.  Grantees generally could not support economic development results and some expense eligibility, and one inaccurately reported a program achievement.  These deficiencies occurred due to misreporting by grantees and went undetected partly because it was impractical for HUD to verify all of the data grantees entered into the system and partly because of a deficiency in HUD’s risk-based selection process for grantee monitoring.  As a result, for the three grantees we reviewed, HUD could not rely on grantee submitted PERMS information for determining the effectiveness of the program, and grantees could not support at least $2.2 million in expenses. 

We recommend that HUD clarify requirements and responsibilities for reporting and monitoring Brownfield project performance and progress.  HUD should also identify and terminate Brownfield projects that grantees never started, including the four grants identified in this report totaling more than $5.16 million, and return the unneeded funds to the U.S. Treasury.  In addition, HUD should require Columbia-Sumpter County, SC, and Miami-Dade County, FL, to support more than $2.2 million in Round II Empowerment Zone expenses or repay the Treasury from non-Federal funds.