Ensure that the $65,000 microenterprise activity awarded to West Mesa CDC for fiscal year 2019 meets CDBG requirements or amend the use of funding to another CDBG-eligible activity.

Support that the Ability360 Mesa Home Accessibility activity for fiscal years 2015, 2016, and 2017 followed HUD requirements and its subrecipient agreement or repay its program $192,563 from non-Federal funds. This includes supporting that all activities met the national objective requirements and were for rental properties, contracts were properly procured, the 10 percent match subrecipient agreement requirement was met ($4,293) and properly accounted for, and contract expenses were adequately supported ($228).

Ensure that the $6,809 allocated for the Mesa Home Accessibility activity for fiscal year 2017 meets HUD requirements or amend the use of funding to another CDBG-eligible activity.

Implement and reinforce its policies and procedures that require the City and its subrecipients to maintain adequate documentation to support the City’s CDBG program activities and maintain adequate documentation of subrecipient monitoring reviews. This includes tracking the status of monitoring reviews, communicating findings to subrecipients, and adequately resolving findings in a timely manner.

Support that the findings for the fiscal years 2011 and 2014 NEDCO activity were adequately resolved or repay its program $105,688 from non-Federal funds.

Ensure that the remaining $153,191 budgeted for the 2010 NEDCO activity meets HUD requirements or amend the use of funds to another CDBG-eligible activity.

Develop and implement procedures to ensure that City employees responsible for desk and onsite monitoring reviews and its subrecipients are aware of HUD and subrecipient requirements for each type of activity funded.

Improve and implement its desk and onsite monitoring policies and procedures to strengthen its capacity to perform effective desk and onsite monitoring reviews of subrecipients and for using a risk assessment to schedule monitoring visits.

Develop and implement policies and procedures for reviewing expenses charged to CDBG from other City departments.

Develop and implement a recurring training plan for City CDBG staff to ensure knowledge of HUD regulations and requirements.

Document and submit all activities to HUD for written approval to ensure that they are eligible activities that meet the CDBG national objective requirements before funding until recommendations 1B, 1J, and 1M to 1P are adequately implemented. This should include documenting all correspondence with HUD, including review and approval.

Document and submit all payments to HUD for written approval before reimbursement until recommendations 1B, 1J, and 1M to 1P are adequately implemented. This should include documenting all correspondence with HUD, including review and approval.

Continue testing the financial and credit history variables, including default data, and include the appropriate reliable and sufficient variables for the cash flow model used to estimate and reestimate the credit subsidy for the cohorts of mortgages within the Section 232 program.

Support that $916,132 spent on contracts was fair and reasonable in accordance with Federal requirements or repay the Operating Fund or Capital Fund program from non-Federal funds any amount that cannot be supported.

Support that $408,968 in funds not yet spent on contracts would be fair and reasonable or reallocate the funds to ensure that they will be put to their intended use.

Reprocure any contracts for which cost reasonableness cannot be supported and contracts were not properly awarded to ensure compliance with HUD requirements.

Ensure that all Authority staff members working with procurements and contract administration receive Federal procurement training.

Establish and implement adequate record-keeping procedures to comply with Federal procurement requirements, including a checklist for the file to ensure that they complete all procurement requirements and receive all required documents.

Ensure that all architectural and engineering contracts or task orders awarded during our audit period are reviewed for cost reasonableness.

Repay the Operating Fund program from non-Federal funds for the $37,941 in ineligible costs when the amount paid exceeded the contract value.