We recommend that the Director of HUD’s Office of Community Planning and Development require the City to Update its procurement policies and procedures to ensure compliance with disaster assistance program requirements

We recommend that the Director of HUD’s Office of Community Planning and Development require the City to ensure that monitoring includes a review of its subrecipients’ (1) policies and procedures to ensure that the policies and procedures are current and comply with HUD requirements, (2) documentation supporting cost reasonableness to ensure that the documentation is sufficient, and (3) training provided regarding procurement and other program requirements to ensure that trainings are adequate.

Develop and issue a departmentwide policy that notes that radon is a radioactive substance and outlines HUD's requirements to test for and mitigate excessive radon levels in accordance with 24 CFR 50.3(i)(1) and 58.5(i)(2)(i).

Corrective Action Taken

None Given.

Develop and provide training for applicable program staff, grantees, and PHAs on radon testing and mitigation requirements.

Develop and implement an effective radon policy to ensure that CPD program activities comply with the departmentwide policy on radon testing and mitigation requirements.

Develop and implement sufficient financial procedures and controls to ensure that program income is appropriately recorded and properly transferred to its NSP2 account.

Ensure it has sufficient staffing and capacity to administer the NSP2 program, including obtaining training for its staff to understand HUD requirements and how to use the DRGR system.

Develop and implement a HUD-approved cost allocation plan to properly account for indirect program costs.

Establish written payroll policies and procedures in accordance with program requirements for the tracking, recording, and maintenance of direct costs to ensure that time distribution records are in place to support the allocation of charges.

Develop and implement additional procedures and controls to ensure that HUD procurement requirements are followed.

Reevaluate and adequately document justification for the establishment of the percentages and other key assumptions used to determine the accrual amount for each program in CPD’s accrued grant liabilities estimate.

Repay the U.S. Treasury from non-Federal funds for the $1,550 overpaid to acquire a foreclosed NSP3 property.

Support the Child Crisis of Arizona campus creation project phase one met a national objective and was necessary and reasonable or repay its program $300,000 from non-Federal funds.

Improve and implement stronger policies and procedures for reviewing potential activities for funding, which include ensuring that they are necessary and reasonable, that the service area for the low- and moderate-income area benefit national objective includes the entire area served by the activity, and that the City has addressed concerns from those reviewing the application.

Support that the Eagles Park activity met an eligible CDBG national objective or repay its program $1,150,000 from non-Federal funds.

Support that the Save the Family Community Conference Center activity met a national objective or repay its program $981,779 from non-Federal funds.

Support that the Kleinman Park activity met a national objective or repay its program $249,300 from non-Federal funds and correct the installation of the playground fossils or repay the program from non-Federal funds.

Support that the West Mesa CDC special economic development activities for fiscal years 2016 and 2017 met a national objective and that expenses were adequately supported and for eligible activities or repay its program $175,975 from non-Federal funds.

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).