Implement adequate procedures and controls to ensure that it maintains sufficient documentation to support that matching contributions, program funds, and program income are accounted for and used in accordance with Federal regulations and it uses program funds for the projects in accordance with Federal regulations.

Provide technical assistance to Travelers Aid to ensure that its staff is adequately trained on how to account for and use matching contributions, program funds, and program income in accordance with Federal regulations.

Clarify that if a State receives a disaster recovery grant and chooses to certify that its procurement process is equivalent to Federal procurement standards, “equivalent” means that its procurement process fully aligns with, or meets the intent of, each of the Federal procurement standards at 2 CFR 200.318 through 200.326.

Improve its controls to ensure that appropriate staff adequately evaluates the proficiency of State grantee procurement processes for States that select the equivalency option. This includes ensuring that staff that specializes in procurement review the documentation to ensure that State processes fully align with, or meet the intent of, each of the Federal procurement standards at 2 CFR 200.318 through 200.326.

Clarify and improve its guidance for State grantees to explain what it means to have a procurement process that fully aligns with, or meets the intent of, each of the Federal procurement standards at 2 CFR 200.318 through 200.326.

Provide procurement training and technical assistance to State grantees to ensure that they understand the intent of each of the Federal procurement standards at 2 CFR 200.318 through 200.326.

Support the eligibility of more than $4,187,560 in unsupported costs or require the grantees to repay the U.S. Treasury from non-Federal funds.

Require one grantee to repay the U.S. Treasury $343,000 from non-Federal funds for ineligible program costs incurred for the project identified in this report.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation showing that it obtained adequate support for contractor invoices related to disaster funds it disbursed to its subrecipient under the program.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation showing that it has strengthened its invoice review process to ensure that costs are eligible and supported before disbursing disaster funds to its subrecipient under the program.

Reevaluate the feasibility of the project to determine the eligibility of the $1,014,211 in State Block Grant funds disbursed. If HUD determines that the project has been canceled or is not feasible, the Government of Puerto Rico or its designee must reimburse all project costs to its State Block Grant program from non-Federal funds.

Instruct the Office for the Socioeconomic and Community Development to submit a plan for how it will proceed with the fine arts center project. The plan should include a schedule that HUD can track to ensure the project’s completion without proposing the use of additional HUD funds.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs direct the State to provide documentation to show that the $18,782,054 used for four activities was for eligible and supported costs and did not duplicate other benefits or repay from non-Federal funds any amount that it cannot support.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs direct the State to Implement procedures to ensure that remaining program costs reimbursed with disaster recovery funds are adequately reviewed for eligibility and support, thereby putting up to $8,932,630 to better use.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs direct the State to provide training to its staff on applicable HUD and Federal requirements for eligibility, documentation of costs, and duplication of benefits reviews.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to support the $240,010 in unsupported procurement payments or repay its CDBG program from non-Federal funds.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to report $22,872 in program income to HUD and properly use program income.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to correct its HOME matching liability report to include the recalculated amount for 2014 and pay the matching liability of $3,301.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to confirm that it has developed and implemented written procurement procedures to ensure that future contracts and subrecipient agreements address the procurement and required provision issues identified in the report.

We recommend that the Director of HUD’s Houston Office of Community Planning and Development require the Department to ensure that all program files include required documentation and support.