We audited the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant program’s property acquisition and disposition activities. We conducted the audit as part of our annual audit plan. Our audit objective was to determine whether HUD had adequate oversight of property acquisition and disposition activities under its Block Grant program.
HUD did not always provide adequate oversight of property acquisition and disposition activities. Specifically, of 14 activities reviewed, 7 field offices did not provide adequate oversight of 8 property acquisition and disposition activities totaling more than $26.2 million. For the eight activities for which adequate oversight was not provided, two activities with draws totaling $6.1 million had outstanding program-related findings that HUD had not enforced, and six, totaling $20.1 million, had not been monitored. Additionally, four of the eight activities totaling nearly $11.9 million had not met a national objective. These conditions occurred because HUD did not have adequate controls to ensure that it enforced its monitoring findings and its grantee risk assessment procedures did not specifically address oversight of property acquisition and disposition activities. As a result, five activities had unsupported draws totaling nearly $12.2 million, and one of those activities also had ineligible costs totaling $4,214. HUD had no assurance that funds spent for these acquisition and disposition activities complied with applicable HUD and Federal requirements.
We recommend that HUD (1) enforce its monitoring findings and require the City of New Orleans, LA, and Miami-Dade County, FL, to provide documentation to support costs totaling $6.1 million or reimburse their programs from non-Federal funds for any costs that they cannot support; (2) develop and implement controls to ensure that it expeditiously takes action to enforce grantee compliance with monitoring findings or pursue one of the established remedies for noncompliance; (3) require the Cities of Saint Paul, MN, and Washington, DC, to provide documentation to support $6.1 million in unsupported payments or reimburse their programs from non-Federal funds for any costs that they cannot support; and (4) direct its field offices to include property acquisition and disposition activities as an area of special emphasis when assessing grantee risk and establishing their monitoring plans and grantee monitoring strategies.
Recommendations
Community Planning and Development
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Status2016-PH-0001-001-AOpenClosed$4,959,911.00Questioned 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.
Direct the New Orleans, LA, field office to enforce its monitoring findings and require the grantee to provide documentation to support costs totaling $4,959,911 or the grantee must reimburse its program from non-Federal funds for any costs that it cannot support.
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Status2016-PH-0001-001-BOpenClosed$1,161,616.00Questioned 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.
Enforce the Miami, FL, field office’s monitoring findings and require the grantee to provide documentation to support costs totaling $1,161,616 or the grantee must reimburse its program from non-Federal funds for any costs that it cannot support.
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Status2016-PH-0001-001-EOpenClosed$1,766,778.00Questioned 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.
Direct the Washington, DC, field office to require the grantee to provide documentation to support the $1,766,778 in unsupported payments identified or the grantee must reimburse its program from non-Federal funds for any costs that it cannot support.
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Status2016-PH-0001-001-FOpenClosed$4,214.00Questioned 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.
Direct the Washington, DC, field office to require the grantee to repay its program $4,214 from non-Federal funds for the ineligible costs associated with activity 1515.
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Status2016-PH-0001-001-GOpenClosed
Direct field offices to include property acquisition and disposition activities as an area of special emphasis when assessing grantee risk and establishing their monitoring plans and grantee monitoring strategies.