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Línea Directa

REPORTAR FRAUDE, DESPERDICIO O ABUSO
Marzo 21, 2007
2007-BO-1003
ig711003.pdf

As part of our annual plan, we audited the Office of Community Development, City of Chicopee, Massachusetts' (City) administration of its Community Development Block Grant (CDBG) and HOME programs. The objective of the audit was to evaluate the City's administration of its housing rehabilitation contracts funded through the CDBG or HOME programs and its oversight and monitoring of various for-profit developers (developers) involved in the rehabilitation activities. We also evaluated whether $700,000 in HOME set-aside funds was committed for an eligible project.

The City did not adequately administer more than $2.2 million in housing rehabilitation contracts funded through its CDBG and HOME programs. It did not perform the required independent analysis of cost estimates submitted by developers before awarding rehabilitation contracts, did not always enforce procurement and financial management contract provisions included in written agreements with developers, did not adequately address performance problems on the part of developers identified during reviews performed by it, and approved final payments for unfinished projects. In addition, it approved more than $1.2 million in unreasonable and unsupported rehabilitation contract costs The $1.2 million is part of the overall $2.2 million., and its use of a $700,000 community housing development organization set-aside (set-aside) from the HOME program was an ineligible use of these funds.

We recommend that the director of the Office of Community Planning and Development in Boston require the City to establish written policies and procedures for both the HOME and CDBG programs that meet HUD requirements for awarding, administering, and monitoring program funds. We also recommend that the City provide supporting documentation for the $1.2 million in unsupported costs, including establishing the reasonableness of the costs, or repay the funds and be directed not to use set-asides on the ineligible project, which will allow $700,000 to be put to better use on other eligible projects.