We completed a review of Palladia, Inc.’s administration of its Supportive Housing Program. We selected Palladia for review based on a request from the U.S. Department of Housing and Urban Development’s (HUD) New York City Office of Community Planning and Development. The objectives of the audit were to determine whether Palladia officials (1) carried out program-assisted activities with the appropriate beneficiaries, (2) expended program grant funds in compliance with HUD and applicable regulations, and (3) maintained effective program and financial management controls.
Our review determined that Palladia officials generally carried out their program- assisted activities with the appropriate beneficiaries; however, they did not provide support for how program grant funds were expended and they did not maintain effective program and financial management controls. Consequently, Palladia officials could not assure HUD that program grant funds were spent in accordance with HUD rules and regulations and that the effectiveness of the grant activities was fully maximized as intended by HUD. As a result, we considered more than $1.6 million in program operating expenditures to be unsupported and $584,579 in required non-Federal cash matching funds for operating and supportive services to be unsubstantiated.
We recommend that the Director of the HUD’s New York City Office of Community Planning and Development instruct Palladia officials to (1) provide documentation to justify more than $1.6 million in unsupported costs; (2) provide adequate supporting documentation to substantiate that the cash match of $584,579 was met for the operating and supportive services costs, and (3) maintain supporting documentation and strengthen oversight controls over disbursements that are sufficient to ensure compliance with applicable regulations.
Recommendations
Community Planning and Development
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Status2014-NY-1008-001-AOpenClosed$1,615,057.00Questioned 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.
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide documentation to justify that the $1,615,057 in unsupported costs is associated with eligible program activities. Any unsupported costs determined to be ineligible should be reimbursed from non-Federal funds.
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Status2014-NY-1008-001-BOpenClosed
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to strengthen oversight controls over disbursements to ensure that adequate supporting documentation is maintained and complies with applicable regulations.
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Status2014-NY-1008-001-COpenClosed
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to follow its policies and procedures for record-keeping to maintain records that adequately identify the source and application of funds provided for financially assisted activities.
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Status2014-NY-1008-001-DOpenClosed
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide records detailing the funding sources of the non-Federal cash match for the six grant activities reviewed.
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Status2014-NY-1008-001-EOpenClosed$584,579.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide source documentation to substantiate that the $584,579 in required non-Federal cash matching funds for five of the six program projects reviewed were met.
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Status2014-NY-1008-001-FOpenClosed
We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to reconcile its accounting records to ensure that total revenues and expenditures in its general ledgers reconcile to the revenues and expenditures reported in its annual performance reports and LOCCS.